<PAGE>
As filed with the Securities and Exchange Commission on September 3, 1999
Registration No. 333-______
Registration No. 333-_____-01
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
Registration Statement Under the Securities Act of 1933
CB&T Holding Corporation Cresent Capital Trust I
(Exact name of Registrant as specified (Exact name of Registrant as
in its charter) specified in its trust agreement)
Louisiana Delaware
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
72-1284224 Being applied for
(I.R.S. Employer (I.R.S. Employer
Identification No.) Identification No.)
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
(504) 525-4381
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
Gary N. Solomon
Chairman and Chief Executive Officer
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
(504) 525-4381
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Gerald F. Heupel, Jr., Esq. James S. Fleischer, Esq.
Kenneth B. Tabach. Esq. David Munchnikoff, Esq.
Elias, Matz, Tiernan & Herrick L.L.P. Silver, Freedman & Taff, L.L.P.
734 15th Street, N.W. 1100 New York Avenue, N.W.
Washington, D.C. 20005 Washington, D.C. 20005
---------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Proposed Proposed
Title of Each Class of Securities Amount Maximum Maximum Amount of
To be Registered to be Offering Price Aggregate Registration
Registered Per Unit(1) Offering Price(1) Fee(1)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Trust Preferred Securities of Crescent
Capital Trust I............................. $11,500,000 100% $11,500,000 $3,197.00
- ------------------------------------------------------------------------------------------------------------------------
Junior Subordinated Deferrable Interest
Debentures of CB&T Holding Corporation(2).... $11,500,000 100% $11,500,000 N/A
- ------------------------------------------------------------------------------------------------------------------------
CB&T Holding Corporation Guarantee with
respect to the Trust Preferred Securities... N/A N/A N/A N/A
- ------------------------------------------------------------------------------------------------------------------------
Total..................................... $11,500,000(4) 100% $11,500,000(4) $3,197.00
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) No separate consideration will be received for the Junior Subordinated
Deferrable Interest Debentures of CB&T Holding Corporation (the "Junior
Subordinated Debentures") distributed upon any liquidation of Crescent
Capital Trust I.
(3) No separate consideration will be received for the CB&T Holding Corporation
Guarantee.
(4) Such amount represents the liquidation amount of the Crescent Capital Trust
I Trust Preferred Securities and the principal amount of Junior
Subordinated Debentures that may be distributed to holders of such Trust
Preferred Securities upon any liquidation of Crescent Capital Trust I.
_________________________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
<PAGE>
*******************************************************************************
*The information in this prospectus is not complete and may be changed. We may*
*not sell these securities until the registration statement filed with the *
*Securities and Exchange Commission is effective. This prospectus is not an *
*offer to sell these securities and is not soliciting an offer to buy these *
*securities in any state where the offer or sale is not permitted. *
*******************************************************************************
SUBJECT TO COMPLETION, DATED _____________________, 1999
1,000,000 Preferred Securities
Crescent Capital Trust I
__% Cumulative Trust Preferred Securities
Guaranteed as described in this prospectus by
CB&T Holding Corporation [CB&T Logo]
The preferred securities of Crescent Capital Trust I offered by this
prospectus generally consist of an indirect beneficial interest in ___% junior
subordinated deferrable interest debentures of CB&T Holding Corporation. The
junior subordinated debentures of CB&T have the same payment terms as the
preferred securities and will be purchased and held by Crescent Capital Trust I
using proceeds of this offering.
Crescent Capital Trust I has applied to list the preferred securities on
the American Stock Exchange under the trading symbol "_____."
Investing in the preferred securities involves risks. See "Risk Factors"
beginning on page 10.
Preferred Securities Per Security Total
------------------------------------ ------------ -----------
Public Price $10.00 $10,000,000
Proceeds to Crescent Capital Trust I $10.00 $10,000,000
Underwriting commission $_____ $_________
Proceeds to CB&T Holding Corporation. $_____ $_________
CB&T Holding Corporation will pay all underwriting commissions.
Ryan, Beck & Co. is offering the preferred securities on a firm commitment
basis. Ryan, Beck & Co. has an option to purchase up to an additional 150,000 of
preferred securities to cover over-allotments.
These securities are not deposit accounts or other obligations of a bank
and are not insured by the federal deposit insurance corporation or any other
governmental agency.
Neither the securities and exchange commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
[RYAN, BECK LOGO]
________ __, 1999
<PAGE>
[Map showing full service offices, limited branch offices
and loan production offices of CB&T]
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SUMMARY
We urge you to read carefully the entire prospectus, including the
financial statements and related notes. Unless we indicate otherwise, we have
not adjusted the information in this prospectus to account for any exercise of
Ryan, Beck & Co.'s over-allotment option.
CB&T Holding Corporation
We are a privately held bank holding company that provides financial
services to individuals and small businesses through our subsidiary, Crescent
Bank & Trust. Crescent Bank operates two full service offices in New Orleans,
nine loan production offices in Louisiana, and seven loan production offices in
Mississippi, Georgia, Tennessee and Kentucky. Crescent Bank originates subprime
automobile loans in these states and purchases them nationwide. Crescent Bank
was chartered in 1991 when our founders purchased a failed savings institution,
and CB&T was formed in 1994. At June 30, 1999, we had $276.2 million of total
assets, $245.8 million of total deposits and $17.4 million of total
shareholders' equity.
Our executive office is located at 1100 Poydras Street, Suite 100, New
Orleans, Louisiana 70112, and our telephone number is (504) 525-4381.
Operating Strategy. We provide general commercial banking services
offering loans and deposit products to individuals and small businesses, with a
specialization in automobile lending. Our automobile loans are predominantly
secured by automobiles and light trucks and, to a lesser extent, motorcycles and
other vehicles. Our automobile lending business was started in 1993 when we
recognized a need in our market to provide loans to individuals who had previous
credit problems or limited credit histories. Because lending to these subprime
borrowers entails a greater risk of default than does lending to more
creditworthy borrowers, we take certain precautions in order to generate returns
that are commensurate with the additional risk. These measures include:
. charging higher interest rates to generate sufficient revenue in excess
of the higher credit losses and operating costs inherent in this
business,
. requiring higher downpayments for borrowers with weaker credit
histories,
. retaining a portion of the finance charges earned by the automobile
dealers as additional protection against credit losses,
. using stringent controls in the approval process, including income and
residency verifications, and
. using consistent collection practices which are triggered once a loan
is more than 10 days past due.
As a result, we have produced strong earnings and attractive returns on
equity. Over the last five years, our pre-tax earnings have increased each year
from $2.7 million in 1994 to $6.6 million in 1998. Because we changed our tax
status to a Subchapter S corporation in 1998 and, as such, are generally no
longer required to pay federal income taxes, you should focus on pre-tax
earnings when comparing our
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results from 1998 and onward to prior periods. During each of the past five
years, our return on average equity exceeded 26% and our return on average
assets exceeded 1.50%.
Going forward, our strategy is to maximize profitability by focusing on:
(1) The origination of high yielding subprime automobile loans through
selected automobile dealers and, to a lesser extent, on a direct basis,
and
(2) The purchase of subprime automobile and other portfolios that meet our
pricing and risk objectives.
We believe our subprime lending activities have been successful because:
. our pricing practices adequately compensate us for the risks we take,
. we have maintained a consistent approach to our underwriting standards
and have been willing to sacrifice volume to preserve our credit
standards,
. our downpayment requirements ensure that the borrower has an investment
in the collateral that creates a greater incentive to repay the loan ,
. our static pool analysis enables us to track charge-offs by date of
origination and monitor trends, and
. we have a consistent collection process.
RECENT RESULTS. For the six months ended June 30, 1999 and 1998, we had
pre-tax earnings of $3.0 million and $3.7 million, respectively. The $675,000
or 18.2% decrease in the 1999 period was primarily due to an increase of $2.1
million in noninterest expenses as we increased our personnel to service the
$62.5 million of loans purchased in 1998 and to prepare for further growth. In
addition, our provision for credit losses increased by $726,000 in the first
half of 1999 based on the results of our static pool analysis, which is the
method we use to test the adequacy of the allowance for credit losses.
CRESCENT BANK'S LOAN PORTFOLIO. At June 30, 1999, our loan portfolio
totalled $244.1 million, net of unearned discounts. Of this amount:
. $172.6 million, or 70.7%, were subprime automobile loans;
. $33.6 million, or 13.8%, were one- to four-family residential real
estate loans; and
. $26.8 million, or 11.0%, were commercial real estate or commercial
business loans.
We intend to continue to focus on originating and purchasing subprime
automobile loans.
4
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CRESCENT CAPITAL TRUST I
Crescent Capital Trust I exists to:
. issue and sell its preferred securities to the public;
. issue and sell its common securities to us; and
. use the proceeds from the sale of the preferred securities and its
common securities to purchase ___% junior subordinated
debentures from us.
The executive office and telephone number of the trust are the same as
ours.
THE OFFERING
The Issuer.................... Crescent Capital Trust I
Securities Offered............ 1,000,000 preferred securities, or 1,150,000
if Ryan, Beck exercises its over-allotment
option in full.
Offering Price................ $10 per preferred security.
Distributions................. As a holder of preferred securities, you will
be entitled to receive cumulative cash
distributions at an annual rate of ____% of
the $10 liquidation amount of each preferred
security, or $___ per year. The trust will pay
distributions quarterly on March 31, June 30,
September 30 and December 31 of each year,
beginning on ______ __, 1999. See "Description
of the Preferred Securities."
Use of Proceeds............... The trust will use the proceeds from the sale
of the preferred securities to buy our junior
subordinated debentures. We will use
approximately $9.2 million of the net proceeds
from the sale of the junior subordinated
debentures for general corporate purposes,
including
. capital contributions of approximately $4.0
million to Crescent Bank to support growth;
. repayment of the current balance of our
outstanding notes, which was $3.3 million
on June 30, 1999; and
. retention of approximately $1.9 million by
us to fund expected payments by us on the
debentures over the next two years.
5
<PAGE>
Junior Subordinated Debentures.. The trust will buy the junior subordinated
debentures from us with the proceeds from the
sale of its common securities and the
preferred securities. Unless we redeem the
junior subordinated debentures after having
received any required regulatory approval,
the debentures will mature on ______ __,
2029. Our obligations under the junior
subordinated debentures will be junior to our
senior indebtedness and all existing and
future liabilities and obligations of our
subsidiaries, including Crescent Bank. At
June 30, 1999, we had $11.3 million in
outstanding senior indebtedness. There is no
limitation on the amount of senior
indebtedness we may issue in the future.
Guarantee....................... We will fully, irrevocably and
unconditionally guarantee all of the trust's
obligations under the preferred securities.
We will guarantee the payment of
distributions on the preferred securities and
payments on liquidation of the trust or
redemption of the preferred securities. Our
guarantee is limited to the amount of funds
held by the trust. If we do not make payments
on the junior subordinated debentures, the
trust will not have sufficient funds to make
payments on the preferred securities. Our
obligations to make payments under the
guarantee will be junior to our obligations
to make payments on our senior indebtedness.
See "Description of the Guarantee" and
"Relationship Among the Preferred Securities,
the Junior Subordinated Debentures, the
Expense Agreement and the Guarantee."
Restrictions on Common Stock
Distributions................ We have agreed that we will not make any
distributions on our common stock unless we
have sufficient cash, cash equivalents or
marketable securities at CB&T to pay eight
consecutive quarterly interest payments on
the junior subordinated debentures.
Right to Defer Interest
Payments..................... The ability of the trust to make
distributions on the preferred securities is
solely dependent upon the receipt of interest
payments from us on the junior subordinated
debentures. If we are not in default under
the trust indenture, we may defer interest
payments on the junior subordinated
debentures for a period of up to 20
consecutive quarters, but not beyond _____
__, 2029. There is no limitation on the
number of times that we may begin an interest
deferral period if we are not in default
under the trust indenture. At the end of any
interest deferral period, we must pay all
accrued and unpaid interest. During an
interest deferral period, interest will
continue to accrue and compound. If we defer
interest, you
6
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will be required to accrue interest income
for United States federal income tax purposes
even though you do not receive any cash
distribution. If we elect to defer interest,
we will be subject to certain restrictions
during the deferral period, including a
restriction that we may not declare or pay
cash dividends on our common stock. We have
no current intention of deferring interest
payments on the debentures. See "Description
of the Junior Subordinated Debentures -Right
to Defer Interest Payment Obligation" and
"Federal Income Tax Consequences -Interest
Income and Original Issue Discount."
Redemption...................... We may, at our option subject to the receipt
of any required regulatory approval, redeem:
. all or some of the junior subordinated
debentures at any time on or after
______ __, 2004, or
. all of the junior subordinated debentures
at any time within ninety days if there
are unfavorable changes in regulatory or
tax laws.
If we redeem some of the junior subordinated
debentures before their stated maturity date,
the trust must redeem the same dollar amount
of its common and preferred securities. We
will pay the full principal amount of the
redeemed junior subordinated debentures, plus
any accrued and unpaid interest, upon any
redemption. See "Description of the Preferred
Securities - Redemption."
Distribution of the Junior
Subordinated Debentures if We
Dissolve the Trust.............. We may dissolve the trust at any time. We may
be required to obtain regulatory approval
before dissolving the trust. If we dissolve
the trust, after it satisfies its creditors,
you will be entitled to receive the
liquidation amount of $10 per preferred
security plus accumulated and unpaid
distributions to the date of payment. This
payment may be in the form of a distribution
of the junior subordinated debentures. If we
distribute the debentures to you, we will use
our best efforts to list them on the American
Stock Exchange or another national exchange
or comparable automated quotation system. See
"Description of the Preferred Securities -
Liquidation Distribution upon Dissolution,"
and "-Liquidation of the Trust and
Distribution of the Junior Subordinated
Debentures to Holders."
7
<PAGE>
Voting Rights................... If you purchase the preferred securities, you
will have very limited voting rights. See
"Description of the Preferred Securities --
Voting Rights; Amendment of Trust Agreement."
Trading Symbol.................. The trust has applied to list the preferred
securities on the American Stock Exchange
under the trading symbol "____."
Risk Factors.................... We urge you to read carefully the "Risk
Factors" section of this prospectus,
beginning on page 10, and the rest of this
prospectus before you make your investment
decision. Because the sole source of funds
for distributions on and redemptions of the
preferred securities are payments on the
junior subordinated debentures by us,
purchasers of the preferred securities are
also making an investment decision with
regard to the junior subordinated debentures.
Therefore, those purchasers should review
carefully all of the information regarding
the junior subordinated debentures contained
in this prospectus.
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
You should read the following data together with the more detailed
information contained in our consolidated financial statements and related
notes, and in Management's Discussion and Analysis of Financial Condition and
Results of Operations in this prospectus.
You should read the following information with the data in the table below:
. The financial information at June 30, 1999 and for the six months ended
June 30, 1999 and 1998 is unaudited. In the opinion of management, the
information reflects all adjustments (consisting only of normal
recurring accruals) which are necessary for a fair presentation of the
information as of such date and for such periods. The operating and
other data for the six months ended June 30, 1999 may not be indicative
of our operations on an annualized basis.
. We converted to a Subchapter S corporation for federal tax purposes
effective January 1, 1998. The tax liability on our taxable income on
or after this date is passed through to our common shareholders. We
generally are no longer subject to federal income taxes, subject to
certain exceptions. Our income tax expense in 1998 was $1.8 million,
primarily due to the write-off of deferred tax assets and other
adjustments related to our change in tax status.
. The efficiency ratio equals noninterest expense less amortization of
intangible assets divided by net interest income plus noninterest
income (excluding gains or losses on securities transactions).
. Capital ratios shown are for CB&T for 1996 forward and for Crescent
Bank only for 1995 and 1994. Tier 1 capital is shareholders' equity
less unrealized gains and losses on securities available for sale and
intangible assets. Risk-weighted assets is computed by applying risk
weight percentages per regulatory guidelines to total assets and off-
balance sheet items.
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. For purposes of computing the ratios characterized as earnings to fixed
charges, earnings represent pre-tax earnings plus fixed charges. Fixed
charges represent total interest expense, including and excluding
interest on deposits, as applicable. There was no material non-deposit
interest expense in 1995 and 1994.
. All dollars are in thousands, except for per share data.
<TABLE>
<CAPTION>
At December 31,
At June 30, ----------------------------------------------------
1999 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL
CONDITION DATA:
Total assets $276,191 $282,526 $244,659 $172,358 $128,293 $84,249
Federal funds sold 29,030 23,280 17,345 7,415 5,425 10,270
Securities available for sale 18,661 15,890 25,838 17,540 16,223 7,154
Loans, net 221,285 233,718 191,776 141,615 103,121 62,514
Deposits 245,776 252,728 216,697 156,801 116,608 77,892
Borrowings 11,324 11,624 12,224 3,000 2,000 --
Total shareholders' equity 17,397 16,662 14,125 10,994 8,211 5,667
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended December 31,
June 30, -------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Net interest income $13,829 $11,728 $23,664 $19,075 $14,251 $9,971 $6,016
Provision for credit
losses 3,291 2,565 5,336 4,883 2,933 1,667 508
Noninterest income 1,175 1,121 2,269 1,593 1,415 1,733 1,616
Noninterest expenses 8,672 6,568 14,037 10,958 8,272 6,357 4,454
Earnings before income
taxes 3,041 3,716 6,560 4,827 4,461 3,680 2,670
Income tax expense 12 1,826 1,838 1,804 1,564 1,312 926
Net earnings 3,029 1,890 4,722 3,023 2,897 2,368 1,744
Earnings per share 14.85 9.26 23.15 14.82 14.20 11.61 8.55
Dividends paid 2,036 793 2,290 -- -- -- --
OTHER DATA:
Return on average assets 2.15% 1.48% 1.81% 1.53% 1.95% 2.21% 2.57%
Return on average equity 34.57 19.93 30.07 26.99 40.58 34.13 36.29
Net interest margin 9.28 8.85 8.67 9.28 9.18 8.84 8.24
Efficiency ratio 57.80 51.12 54.13 53.02 52.80 54.31 58.36
Non-performing loans to
total loans 1.87 2.04 2.79 2.23 2.69 2.60 2.54
Allowance for credit
losses to total loans 2.22 2.40 1.73 2.41 2.47 1.89 1.59
Net charge-offs to
average loans 1.89 2.21 2.68 2.10 1.03 0.71 0.24
Total capital to risk-
weighted assets 8.91 8.60 8.04 8.31 7.70 9.46 8.29
Tier 1 capital to average
assets 6.23 6.01 6.00 6.31 6.34 7.70 6.73
Tier 1 capital to risk-
weighted assets 7.64 7.33 6.78 7.04 6.60 8.21 7.04
EARNINGS TO FIXED
CHARGES RATIOS:
Including interest on
deposits 1.43x 1.56x 1.48x 1.46x 1.57x 1.72x 2.19x
Excluding interest on
deposits 9.29x 10.02x 9.09x 22.17x 26.79x N/A N/A
</TABLE>
9
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RISK FACTORS
An investment in the preferred securities involves a number of risks. We
urge you to read all of the information contained in this prospectus. In
addition, we urge you to consider carefully the following factors in evaluating
us, our business and the trust before you purchase the preferred securities
offered by this prospectus.
Because the trust will rely on the payments it receives on the junior
subordinated debentures to fund all payments on the preferred securities, and
because the trust may distribute the junior subordinated debentures in exchange
for the preferred securities, purchasers of the preferred securities are making
an investment decision that relates to the junior subordinated debentures as
well as the preferred securities. You should carefully review the information in
this prospectus about the preferred securities, the junior subordinated
debentures and the guarantee.
RISK FACTORS RELATING TO CB&T'S BUSINESS
Crescent Bank's emphasis on Subprime Automobile loans increases the possibility
Of Credit Losses.
We may incur significant losses because over 70% of Crescent Bank's loans
at June 30, 1999 are secured by subprime automobile loans. These loans are to
individuals who have had past credit problems or who have limited credit
experience. These subprime loans involve a greater risk of default than
automobile loans to individuals who have better credit records. The automobiles
lose their value over time and the automobiles may be damaged or not easily
located if we need to repossess them. We generally incur a loss when we sell our
repossessed automobiles. See "Business of CB&T - Asset Quality."
Our subprime automobile loans that exceed the wholesale value of the automobile
increase the possibility of credit losses.
We generally limit the amount of the loan that is used to finance the
purchase of an automobile to the wholesale value of the automobile for our most
creditworthy borrowers. We also require borrowers with mixed or weak credit to
make a larger downpayment. However, many of our borrowers finance the purchase
of extended warranties or service contracts, and a small portion of our
borrowers also finance the purchase of credit life insurance. When the cost of
these additional items is added to the loan, the total loan amount is frequently
above the wholesale value of the automobile. When we sell repossessed
automobiles at auction, the price we receive is generally less than the
wholesale value and therefore may result in a loss.
Crescent bank's commercial real estate and commercial business loans increase
the possibility of credit losses.
At June 30, 1999, approximately 6.0% of Crescent Bank's total loans were
secured by multi-family and other commercial real estate properties and
approximately 3.8% of Crescent Bank's total loans consisted of commercial
business loans. Loans secured by multi-family properties and other commercial
real estate are generally larger, and are considered to have a higher risk of
loss, than loans
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secured by one- to four-family residences. Significant losses on loans secured
by multi-family properties are possible because the cash flows from multi-family
properties securing the loans may become inadequate to service the loan
payments. Significant losses on loans secured by other commercial real estate
and on commercial business loans are possible because the repayment of these
loans typically depends upon the successful operation of the business activities
being conducted. See "Business of CB&T - Asset Quality."
If credit losses exceed our allowance for credit losses, our net earnings could
be reduced.
We maintain an allowance for losses on loans at a level we consider
adequate to cover losses that currently exist in our portfolio, based on various
estimates and assumptions we have made about events and conditions that exist
today and have already occurred. The amount of future losses depends largely
upon the performance of our large portfolio of subprime automobile loans. We are
vulnerable to changes in economic, operating and other conditions, including
changes in interest rates. These changes are typically beyond our control. We
cannot assure you that our allowance will be adequate to cover actual losses.
If our allowance is inadequate, our results of operations could be adversely
affected. Our level of nonperforming assets, which are primarily subprime
automobile loans, is higher than our regional and national peers. See "Business
of CB&T - Asset Quality."
An increase in interest rates could reduce our net earnings.
If interest rates were to increase for a sustained period of time, the
higher rates could reduce our net earnings because our interest-bearing
liabilities repricing or maturing within one year and within three years exceed
our interest-earning assets with similar characteristics. In addition, while
over 60% of our subprime automobile loans, before net purchase discounts, mature
within three years of June 30, 1999, these loans primarily have fixed interest
rates at or near the maximum rates permitted by state law. As a result, if
market interest rates increase, it is unlikely that the interest rates on these
loans would increase at the same rate as increases in market rates of interest
on our certificates of deposit, unless the maximum permissible rates on these
loans were also increased. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations - Our Exposure to Changes in
Interest Rates."
Our loans are short-term and need to be constantly replaced.
At June 30, 1999, a substantial portion of our loans mature within five
years. In addition, the average life of the loans is typically less than their
average contractual maturities. Our asset growth depends upon our ability to
continue to originate and purchase an increasing amount of short-term loans.
During the first half of 1999, several of our loan categories decreased, with
the largest decline being purchased automobile loans. See "Business of CB&T -
Lending Activities."
Our asset growth and net earnings are subject to significant quarterly
fluctuations.
Our loan purchases are a significant factor in our asset growth. We
purchased $62.5 million of loans in 1998 and $34.6 million in 1997, after net
purchase discounts, and our total assets significantly increased in 1998 and
1997. In the first half of 1999, our loan purchases decreased to $4.6 million,
after net purchase discounts, and our total assets declined. The amount and
timing of our loan purchases depends upon the availability of loan pools at
prices acceptable to us. The amount of loans we purchase can fluctuate
significantly from one quarter to the next.
11
<PAGE>
We have significantly increased our staff in recent years to handle our
asset growth and increased loan purchases. When our assets decline, our net
earnings will be adversely affected unless we are able to reduce our total
noninterest expenses.
Prepayments on our purchased loans could adversely affect our yield on these
loans.
When we purchase loan pools, our purchase price is based upon our
assessment of the credit quality of the loans and the average yield of the
loans. The average yield depends upon the remaining life of the loan as well as
the stated interest rate. We make certain assumptions regarding the anticipated
prepayment rates on the loans we purchase, and actual prepayment rates can vary
significantly from the anticipated rates. When purchased loans prepay faster
than anticipated, then any premiums on the purchased loans will reduce interest
income. See "Management's Discussions and Analysis of Financial Condition and
Results of Operations" and "Business of CB&T - Originated and Purchased
Automobile Loans."
We face significant competition which may negatively impact our earnings.
We compete for loans and deposits with other local, regional and national
commercial banks, savings institutions, finance companies, credit unions and
nonfinancial institutions, many of which have substantially greater financial
resources than we do. The automobile dealers that we have agreements with
generally use a number of alternative lending sources. We believe that other
competitors are frequently willing to make loans for higher amounts than we are
and may offer other incentives to dealers. There are several market areas that
we considered entering but chose not to do so because of the level of
competition. The competition for certificates of deposit, which is our main
source of funds, is primarily based on the interest rates offered. Our net
interest income will be adversely affected if market interest rates rise.
Our board of directors controls CB&T and its interests could be different than
your interests.
Our directors directly own 69.6% of the outstanding shares of our common
stock and have control of our company. Immediate family members and related
trusts of the directors own an additional 21.6% of our common stock. As
majority shareholders, our current directors will continue to be able to elect
or remove all of our directors and determine the outcome of any issue submitted
to a vote of the shareholders. See "CB&T Shareholders."
The failure of parties with whom we do business to address year 2000 issues
could disrupt our business.
The year 2000 issue refers to computer programs being written using two
digits rather than four to define an applicable year. A company's hardware,
date driven automated equipment or computer programs that have a two digit field
to define the year may recognize a date using "00" as the year 1900 rather than
the year 2000. This faulty recognition could result in a system failure,
disruption of operations, or inaccurate information or calculations.
Our most significant continuing year 2000 risk is the failure of third
parties with whom we do business to address their year 2000 problems. If our
suppliers, particularly public utilities, are not year 2000 ready, we may
experience an interruption of service to our customers. As a result, our
business and
12
<PAGE>
operations may be materially and adversely affected. We can make no assurances
that the system or products of third parties on which we rely will be timely
converted or that a failure by a third party, or a conversion that is
incompatible with our systems, would not have a material adverse effect on us.
For a more detailed discussion of this risk and the status of our year 2000
program, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations - The Year 2000."
Change in regulations could adversely affect the growth of our assets and our
income.
We are governed by significant federal and state regulation and supervision
which is primarily for the benefit and protection of our customers and not for
the benefit of our investors. Laws, regulations, policies and case law
interpretations thereof currently affecting us and our subsidiary may change at
any time. For example, each of the states in which we do business impose
maximums on the amount of interest, late fees, collection costs and insurance
premiums we can charge on our automobile loans. Our business may be adversely
affected by any future changes in laws, regulations, policies or case law
interpretations thereof. See "Regulation - Crescent Bank."
Risk Factors Relating To The Preferred Securities
Statutory restrictions on bank dividends could limit the amounts crescent bank
may pay to us and our ability to make payment on our debt.
As a bank holding company, we conduct our operations mainly through our
subsidiary. Our principal source of cash is dividends from Crescent Bank. If
Crescent Bank is unable to pay dividends to us, we may be unable to make
interest or principal payments on our debt, including payments on the junior
subordinated debentures. Various statutory provisions could restrict the amount
of dividends Crescent Bank can pay to us. Prior regulatory approval is required
if total dividends in any one year will exceed the bank's net earnings for that
year and the immediately preceding year. At June 30, 1999, Crescent Bank could
pay us a dividend of up to $2.6 million without prior regulatory approval. See
"Regulation - Crescent Bank - Limitations on Dividends."
In addition, Crescent Bank has operated with lower capital ratios than most
other banks and, as a result, faces a higher risk of falling below regulatory
capital requirements. If Crescent Bank becomes undercapitalized, Crescent Bank
will have to comply with increased restrictions on the payment of dividends and
may lose its ability to pay dividends. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" and Note M of Notes to Consolidated Financial Statements.
Our obligations under the guarantee and the junior subordinated debentures are
subordinated to most of our other creditors.
Our obligations under the guarantee are unsecured and rank junior in right
of payment to all our senior indebtedness.
Our obligations under the junior subordinated debentures are unsecured and
rank junior in right of payment to all of our senior indebtedness and equal to
other junior debt securities we may issue. The junior subordinated debentures
also will be effectively junior to all obligations of our subsidiaries.
13
<PAGE>
The preferred securities, the junior subordinated debentures and the
guarantee do not limit our ability to incur additional indebtedness, including
indebtedness that ranks senior to the junior subordinated debentures and the
guarantee. We also may create or assume liens on our properties and those of our
subsidiaries. We are not required to maintain any financial ratios or specified
level of net worth, revenues, income, cash flow or liquidity.
Because we are a holding company, our right to participate in any
distribution of the assets of our subsidiary, Crescent Bank, upon its
liquidation, reorganization or otherwise, is subject to the prior claims of
creditors of the bank, except to the extent that we may be recognized as a
creditor of Crescent Bank. Accordingly, the junior subordinated debentures and
the guarantee will be effectively subordinated to all existing and future
liabilities of Crescent Bank as well as any other future subsidiaries of ours,
and holders of the trust preferred securities and the junior subordinated
debentures and beneficiaries of the guarantee should look only to our assets for
payments on the junior subordinated debentures or under the guarantee, as the
case may be. See "Description of the Guarantee - Status of the Guarantee" and
"Description of the Junior Subordinated Debentures - Subordination."
If crescent bank does not pay dividends to us and as a result we are unable to
make payments on the junior subordinated debentures, the trust will not be able
to pay distributions and other payments on the preferred securities and the
guarantee will not apply.
The trust's ability to pay distributions on the preferred securities
depends upon our making timely payments on the junior subordinated debentures.
In turn, our ability to make payments on the junior subordinated debentures
depends on Crescent Bank paying dividends to us in amounts sufficient for us to
service our obligations. If we default on our obligations to pay principal and
interest on the junior subordinated debentures, the trust will not have
sufficient funds to pay distributions on, or the $10 liquidation amount of, the
preferred securities.
If we default on our obligation, you will not be able to rely upon the
guarantee for payment because the guarantee only applies if we make a payment of
principal or interest on the junior subordinated debentures. Instead, you or the
property trustee will have to sue us to enforce the holder's rights under the
indenture relating to the junior subordinated debentures. See "Description of
the Guarantee."
If we defer distributions on the junior subordinated debentures, you will have
to include interest in your taxable income before you receive cash.
You will not receive distributions on the preferred securities if we defer
interest payments on the junior subordinated debentures. If this occurs, you
will have to include accrued interest in your income for United States federal
income tax purposes before you actually receive the cash distributions at the
end of the deferral period. In addition, you would not receive the cash related
to that income from the trust if you sell your preferred securities before the
record date for the payment of any deferred distribution, even if you held the
preferred securities on the date that the payments would normally have been
paid. See "Federal Income Tax Consequences" and "- Sales or Redemption of the
Preferred Securities."
14
<PAGE>
If we are not in default on the payment of interest on the junior
subordinated debentures, we may defer interest payments on the junior
subordinated debentures one or more times for up to 20 consecutive quarters, but
not beyond the maturity date of the junior subordinated debentures. During an
interest deferral period, the trust would defer distributions on the preferred
securities in the same amount. See "Description of the Preferred Securities -
Distributions" and "Description of the Junior Subordinated Debentures - Right to
Defer Interest Payment Obligation."
If you sell your preferred securities during an interest deferral period,
you must treat any accrued but unpaid interest on the junior subordinated
debentures as ordinary income. You must also add the amount of the accrued but
unpaid interest to your adjusted tax basis in the preferred securities. You will
recognize a capital loss if the selling price is less than your adjusted tax
basis. Generally, you cannot apply capital losses to offset ordinary income for
United States federal income tax purposes. See "Federal Income Tax Consequences
- - Sales or Redemption of the Preferred Securities."
If we defer distributions on the junior subordinated debentures, the market
price of the preferred securities may decline.
If we defer any interest payment on the junior subordinated debentures, the
preferred securities will likely trade at prices that do not fully reflect the
value of accrued but unpaid interest related to the underlying junior
subordinated debentures. If we defer interest payments in the future, the market
price of the preferred securities will likely be adversely affected. Therefore,
if you sell your preferred securities during an interest deferral period, you
may not receive the same return on your investment as someone who continues to
hold their preferred securities. In addition, due to our right to defer interest
payments, the market price of the preferred securities may be more volatile than
the market prices of other similar securities that are not subject to optional
deferrals.
The preferred securities may be redeemed prior to maturity; you may be taxed on
the proceeds and you may not be able to reinvest the proceeds at the same or a
higher rate of return.
If a tax event, an investment company event or a capital treatment event
occurs and continues as described under the caption "Description of the Junior
Subordinated Debentures - Redemption or Exchange," we may be able to redeem the
junior subordinated debentures in whole, but not in part, within 90 days
following the event. We may also redeem the preferred securities at our option
in whole or in part on or after ______ __, 2004, subject to any required
regulatory approval.
If the junior subordinated debentures are redeemed, the preferred
securities will be redeemed at a redemption price equal to the $10 liquidation
amount, plus accumulated and unpaid distributions to the redemption date. Under
current United States federal income tax law, the redemption of the preferred
securities would be a taxable event to you. In addition, you may not be able to
reinvest the money you receive in the redemption at a rate that is equal to or
higher than the rate of return you received on the preferred securities. See
"Description of the Preferred Securities - Redemption" and "Federal Income Tax
Consequences."
15
<PAGE>
The junior subordinated debentures may be distributed to the holders of the
preferred securities and the junior subordinated debentures may trade at a lower
price than what you paid for the preferred securities.
We may dissolve the trust at any time and, after satisfaction of
liabilities as required by applicable law, distribute the junior subordinated
debentures to you in exchange for your preferred securities. We cannot predict
the market prices for the junior subordinated debentures that may be distributed
to you if the trust is dissolved. The junior subordinated debentures may trade
at a lower price than what you paid to purchase the preferred securities in this
offering.
If the junior subordinated debentures are distributed to the holders of
preferred securities if the trust is liquidated, we will use our best efforts to
list the junior subordinated debentures on the American Stock Exchange or other
stock exchanges on which the preferred securities are then listed. However, we
cannot assure you that the exchange will approve the junior subordinated
debentures for listing or that a trading market will exist for the junior
subordinated debentures.
Under current United States federal income tax law, a distribution of
junior subordinated debentures upon the dissolution of the trust would not be a
taxable event to you. Should there be a change in law, a change in legal
interpretation or a tax event under the indenture, the distribution could be
taxable to holders of the preferred securities. If, however, the trust were
characterized as an association taxable as a corporation at the time of the
dissolution of the trust, the distribution of the junior subordinated debentures
would constitute a taxable event to you. In addition, any redemption of the
preferred securities for cash would be a taxable event to you. See "Federal
Income Tax Consequences - Distribution of the Junior Subordinated Debentures to
Holders of the Preferred Securities," and " - Sales or Redemption of the
Preferred Securities."
If you sell your preferred securities between record dates for distribution
payments, you may have to include accrued but unpaid distributions in your
taxable income.
The preferred securities may trade at prices that do not fully reflect the
value of accrued but unpaid interest on the underlying junior subordinated
debentures.
If the Internal Revenue Service determines that the junior subordinated
debentures are subject to the original issue discount rules, and you dispose of
your preferred securities between record dates for any distribution payments,
you will have to include as ordinary income for United States federal income tax
purposes an amount equal to the accrued but unpaid interest on your
proportionate share of the interest on the junior subordinated debentures
through the date of your disposition. However, we believe that the junior
subordinated debentures are not subject to the original issue discount rules.
You will recognize a capital loss on the amount that the selling price is
less than your adjusted tax basis. Normally, you may not apply capital losses to
offset ordinary income for United States federal income tax purposes.
See "Federal Income Tax Consequences" for more information.
16
<PAGE>
We generally will control the trust because your voting rights are very
limited; your interests may not be the same as our interests.
As a holder of preferred securities, you will have limited voting rights.
These voting rights will relate only to modifications of the preferred
securities and trust agreement and the exercise of the trust's rights as holder
of the junior subordinated debentures and the guarantee. In general, unless an
event of default has occurred and is continuing, only CB&T, as holder of the
trust's common securities, can appoint, remove or replace the trustees under the
trust agreement.
We and the trustees of the trust may amend the trust agreement without your
consent under certain circumstances, even if it adversely affects your
interests, as described under the heading "Description of the Preferred
Securities - Removal of Trustees" and "- Voting Rights; Amendment of Trust
Agreement."
You may have difficulty selling your preferred securities if an active trading
market does not develop.
There is no current public market for the preferred securities. The trust
has applied to list the preferred securities on the American Stock Exchange.
However, a listing does not guarantee that a trading market for the preferred
securities will develop. As a result of our right to defer interest payments,
the market price of the preferred securities may be more volatile than other
securities that are not subject to such optional interest deferral. If a trading
market for the preferred securities does develop, we can make no assurances
regarding the depth of that market and the ability of holders to sell their
preferred securities easily.
OUR FORWARD-LOOKING STATEMENTS ARE SUBJECT TO CHANGE
We make certain statements in this document as to what we expect may happen
in the future. These statements usually contain the words "believe," "estimate,"
"project," "expect," "anticipate," "intend" or similar expressions. Because
these statements look to the future, they involve inherent risks and
uncertainties and are based on our current expectations and beliefs. Actual
results or events may differ materially from those reflected in the forward-
looking statements because of a number of factors. These factors include general
economic conditions, the interest rate environment, competitive conditions in
the financial services industry, changes in law, governmental policies and
regulations, and rapidly changing technology affecting financial services. You
should be aware that our current expectations and beliefs as to future events
are subject to change at any time, and we can give you no assurances that the
future events will actually occur. For a more detailed discussion of factors
that could cause actual results to differ, please see the discussion under "Risk
Factors."
MARKET FOR THE PREFERRED SECURITIES
The trust has applied to list the preferred securities on the American
Stock Exchange under the symbol "______." There can be no assurance that the
preferred securities will be approved for listing on the AMEX, that an active
and liquid trading market will develop or, if developed, will be maintained. A
public trading market having the desirable characteristics of depth, liquidity
and orderliness depends
17
<PAGE>
upon the presence in the marketplace of both willing buyers and sellers of the
preferred securities at any given time, which is not within the control of CB&T,
the trust or Ryan, Beck & Co. Accordingly, there can be no assurance that
resales of the preferred securities can be made at or above the purchase price
of $10.00 per share.
Representatives of CB&T and Ryan, Beck & Co. negotiated the offering price
and distribution rate. The offering price of the preferred securities may not
be indicative of the market price following the offering. See "Underwriting."
HOW OUR NET PROCEEDS WILL BE USED
We estimate the net proceeds from the sale of the preferred securities will
be approximately $9.2 million ($10.6 million if Ryan, Beck & Co.'s over-
allotment option is exercised in full), in each case after deducting the
underwriting discounts, commissions and estimated expenses. The Trust will
invest all of the proceeds from the sale of the preferred securities in junior
subordinated debentures. We intend to use the net proceeds from the sale of the
junior subordinated debentures for general corporate purposes, including, but
not limited to:
. capital contributions of approximately $4.0 million to Crescent Bank
to support growth;
. repayment of the current balance of our outstanding notes, which was
$3.3 million on June 30, 1999; and
. retention of approximately $1.9 million by us to fund expected
payments by us on the debentures over the next two years.
Of the $3.3 million of notes payable to be repaid by us, $2.4 million has
an 8.50% interest rate and is currently being extended on a month to month
basis. The remaining $900,000 note payable has an 8.05% interest rate and
matures on September 30, 2000. See Note F of Notes to Consolidated Financial
Statements.
ACCOUNTING AND REGULATORY TREATMENT
For financial reporting purposes, the trust will be treated as our
subsidiary. As a result, our consolidated financial statements will include the
trust's financial statements. Our consolidated statements of financial
condition will include the preferred securities under the caption "Guaranteed
Preferred Beneficial Interests in CB&T's Junior Subordinated Debentures," and
the notes to the consolidated financial statements will include appropriate
disclosures about the preferred securities. For financial reporting purposes, we
will record distributions payable on the preferred securities as interest
expense in our consolidated statements of earnings.
We are required by the Federal Reserve Board to maintain certain levels of
capital for bank regulatory purposes. For these purposes, different capital
instruments are classified as either Tier 1 or Tier 2 capital, with Tier 1 being
the more favorable classification. The Federal Reserve has stated that
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<PAGE>
long-term cumulative preferred instruments issued by a special-purpose
subsidiary of a bank holding company and structured in the manner in which the
preferred securities are structured normally will be accorded Tier 1 capital
treatment. We believe that the preferred securities will qualify for Tier 1
capital treatment. Such treatment, together with our ability to deduct for
income tax purposes the interest payable on the junior subordinated debentures,
provides us with a cost-effective means of obtaining capital for regulatory
purposes.
The amount of trust preferred securities that can be included in Tier 1
capital is limited to 25% of total Tier 1 capital. At June 30, 1999, CB&T had
$17.5 million of Tier 1 capital. On a pro forma basis at that date, we would be
able to include $5.8 million of the trust preferred securities as Tier 1
capital.
OUR CAPITALIZATION
The following table sets forth our consolidated capitalization as of June
30, 1999, both historical and as adjusted to give effect to the completion of
the offering of the preferred securities, including the application of the net
proceeds as proposed. We urge you to read the following data, together with the
consolidated financial statements and related notes, included elsewhere in this
prospectus.
Actual As Adjusted
-------- -----------
(In thousands)
Deposits $245,776 $245,776
======== ========
Borrowings:
Federal Home Loan Bank advances 8,000 8,000
Notes payable to a commercial bank 3,324 --
-------- --------
Total borrowings $ 11,324 $ 8,000
======== ========
Guaranteed preferred beneficial interests in CB&T's
junior subordinated debentures(1) $ -- $ 10,000
======== ========
Shareholders' equity:
Shares of common stock, $2.50 par value,
15,000,000 shares authorized; 204,000 shares
issued and outstanding $ 510 $ 510
Additional paid-in capital 3,490 3,490
Retained earnings 13,455 13,455
Accumulated other comprehensive income (loss) (58) (58)
-------- --------
Total shareholders' equity $ 17,397 $ 17,397
======== ========
Consolidated capital ratios(2):
Total capital to risk-weighted assets(3) 8.91% 12.73%
Tier 1 capital to average assets 6.23 8.03
Tier 1 capital to risk-weighted assets(3) 7.64 9.77
Crescent Bank capital ratios(2):
Total capital to risk-weighted assets(3) 10.37 11.91
Tier 1 capital to average assets 7.41 8.72
Tier 1 capital to risk-weighted assets(3) 9.10 10.67
(Footnotes on next page)
19
<PAGE>
_________________
(1) The as adjusted preferred securities of the trust include beneficial
interests in $10.0 million aggregate principal amount of the junior
subordinated debentures to be issued by us to the trust. The junior
subordinated debentures will bear interest at the annual rate of ____% of
the principal amount thereof, payable quarterly, and will mature on
____________ __, 2029. We own all of the trust's common securities.
(2) We computed the adjusted capital ratios based on the estimated net proceeds
from the sale of the capital securities, in a manner consistent with Federal
Reserve Board guidelines for CB&T and FDIC guidelines for Crescent Bank. The
capital ratios for Crescent Bank assume that we will contribute $4.0 million
of proceeds from the sale of the capital securities to Crescent Bank.
(3) We assumed the proceeds from the offering are invested in assets which have
a risk-weighting of 100%.
OUR DIVIDEND POLICY
As a Subchapter S corporation, the tax liability on our taxable income is
passed through to our common shareholders. We intend to pay quarterly cash
dividends to our common shareholders in amounts sufficient to cover their income
tax liability on our taxable income attributable to them, assuming they are in
the highest marginal tax brackets for federal and state tax purposes.
After the above dividends are paid to cover the tax liability of our common
shareholders, we currently intend to retain our net earnings to the extent
necessary to maintain a minimum ratio of total capital to risk-weighted assets
of 10% and a minimum ratio of Tier 1 capital to risk-weighted assets of 6%. We
expect to achieve these capital ratios on a pro forma basis as of June 30, 1999
after giving effect to the net proceeds of the offering. See "Our
Capitalization."
After we have achieved and maintained the above capital ratios, we
currently intend to pay any excess net earnings as a dividend to our common
shareholders. Under Louisiana law, the maximum dividends that can be declared
and paid by Crescent Bank during any one year cannot exceed the bank's net
earnings for that year and the immediately preceding year, unless prior
regulatory approval is obtained. The payment of any dividends by us is subject
to the prior declaration by our board of directors and to compliance with all
applicable federal and state laws, regulations and policy statements. See
"Regulation - Crescent Bank -Limitations on Dividends."
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<PAGE>
SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in Thousands, except per share data)
You should read the following financial and other data together with the
more detailed information contained in our consolidated financial statements and
related notes and in the Management's Discussion and Analysis of Financial
Condition and Results of Operations in this prospectus.
In the opinion of management, the financial information at June 30, 1999
and for the six months ended June 30, 1999 and 1998 reflect all adjustments
(consisting only of normal recurring accruals) which are necessary for a fair
presentation of the information as of such date and for such periods. The
operating and other data for the six months ended June 30, 1999 may not be
indicative of our operations on an annualized basis.
<TABLE>
<CAPTION>
At December 31,
At June 30, ----------------------------------------------------
1999 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
SELECTED FINANCIAL CONDITION DATA:
Total assets $276,191 $282,526 $244,659 $172,358 $128,293 $84,249
Federal funds sold 29,030 23,280 17,345 7,415 5,425 10,270
Securities available for sale 18,661 15,890 25,838 17,540 16,223 7,154
Loans, net 221,285 233,718 191,776 141,615 103,121 62,514
Mortgage loans held for sale 453 1,577 2,517 -- -- --
Deposits 245,776 252,728 216,697 156,801 116,608 77,892
Borrowings 11,324 11,624 12,224 3,000 2,000 --
Total shareholders' equity 17,397 16,662 14,125 10,994 8,211 5,667
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
------------------- --------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- ------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED OPERATING DATA:
Total interest income $20,828 $18,306 $37,386 $29,556 $22,120 $15,084 $8,261
Total interest expense 6,999 6,578 13,722 10,481 7,869 5,113 2,245
------- ------- ------- ------- ------- ------- ------
Net interest income 13,829 11,728 23,664 19,075 14,251 9,971 6,016
Provision for credit losses 3,291 2,565 5,336 4,883 2,933 1,667 508
------- ------- ------- ------- ------- ------- ------
Net interest income after
provision for credit losses 10,538 9,163 18,328 14,192 11,318 8,304 5,508
Noninterest income 1,175 1,121 2,269 1,593 1,415 1,733 1,616
Noninterest expenses 8,672 6,568 14,037 10,958 8,272 6,357 4,454
------- ------- ------- ------- ------- ------- ------
Earnings before income taxes 3,041 3,716 6,560 4,827 4,461 3,680 2,670
Income tax expense 12 1,826 1,838 1,804 1,564 1,312 926
------- ------- ------- ------- ------- ------- ------
Net earnings 3,029 1,890 4,722 3,023 2,897 2,368 1,744
Other comprehensive
income (loss), net of tax
effects (258) 37 105 108 (114) 175 (22)
------- ------- ------- ------- ------- ------- ------
Comprehensive income $ 2,771 $ 1,927 $ 4,827 $ 3,131 $ 2,783 $ 2,543 $1,722
======= ======= ======= ======= ======= ======= ======
Basic and fully diluted
earnings per share $ 14.85 $ 9.26 $ 23.15 $ 14.82 $ 14.20 $ 11.61 $ 8.55
======= ======= ======= ======= ======= ======= ======
Dividends paid $ 2,036 $ 793 $ 2,290 $ -- $ -- $ -- $ --
</TABLE>
(Table continued on next page)
21
<PAGE>
<TABLE>
<CAPTION>
At or For the Six
Months
Ended June 30, At or For the Year Ended December 31,
----------------- ----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Performance Ratios(1):
Return on average assets(2) 2.15% 1.48% 1.81% 1.53% 1.95% 2.21% 2.57%
Return on average equity(2) 34.57 19.93 30.07 26.99 40.58 34.13 36.29
Interest rate spread(3) 8.41 7.97 7.84 8.43 8.22 7.69 7.35
Net interest margin(3) 9.28 8.85 8.67 9.28 9.18 8.84 8.24
Average interest-earning
assets to average interest-
bearing liabilities 118.50 117.67 116.47 116.69 118.90 125.46 128.98
Noninterest expense to average
assets 6.16 5.16 5.39 5.53 5.57 6.05 6.83
Efficiency ratio(4) 57.80 51.12 54.13 53.02 52.80 54.31 58.36
Dividend payout ratio 78.28 -- 48.50 -- -- -- --
EARNINGS TO FIXED CHARGES
RATIOS(5):
Including interest on deposits 1.43x 1.56x 1.48x 1.46x 1.57x 1.72x 2.19x
Excluding interest on deposits 9.29x 10.02x 9.09x 22.17x 26.79x (9) (9)
Asset Quality Ratios(6):
Non-performing loans to total
loans(7) 1.87% 2.04% 2.79% 2.23% 2.69% 2.60% 2.54%
Non-performing assets to total
assets(7) 1.54 1.61 2.36 1.79 2.27 2.13 1.92
Allowance for credit losses to
total loans(7) 2.22 2.40 1.73 2.41 2.47 1.89 1.59
Allowance for credit losses to
total non-performing loans(7) 127.43 141.23 67.34 116.26 95.50 78.25 70.02
Net charge-offs to average
loans(8) 1.89 2.21 2.68 2.10 1.03 0.71 0.24
Capital Ratios at end of period:
Shareholders' equity to total assets 6.30% 5.90% 5.90% 5.77% 6.37% 6.40% 6.73%
Average equity to average assets 6.20 7.44 6.02 5.66 4.81 6.49 7.07
Total capital to risk-weighted assets 8.91 8.60 8.04 8.31 7.70 9.48 8.29
Tier 1 capital to average assets 6.23 6.01 6.00 6.31 6.34 7.70 6.73
Tier 1 capital to risk-weighted assets 7.64 7.33 6.78 7.04 6.60 8.21 7.04
Other Data at end of period:
Number of full service offices 2 2 2 2 2 2 2
Number of loan production offices 16 16 18 15 12 10 7
Full-time equivalent employees 234 162 216 150 104 79 56
</TABLE>
_________________________
(1) The ratios are based on average daily balances during the periods indicated,
except that borrowings and shareholders' equity are based on average monthly
balances. The ratios are annualized where appropriate.
(2) If we had not converted to a Subchapter S corporation on January 1, 1998 and
had been subject to a combined tax rate of 35% in the 1999 and 1998 periods,
then our return on average assets would have been 1.40% for the first half
of 1999, 1.90% for the first half of 1998 and 1.64% for 1998, and our return
on average equity would have been 22.56% for the first half of 1999, 25.47%
for the first half of 1998 and 27.16% for 1998.
(Footnotes continued on next page)
22
<PAGE>
(3) Interest rate spread represents the difference between the average yield on
interest-earning assets and the average rate on interest-bearing
liabilities. Net interest margin represents net interest income as a
percentage of average interest-earning assets.
(4) Equals noninterest expense less amortization of intangible assets divided by
net interest income plus noninterest income (excluding gains or losses on
securities transactions).
(5) For purposes of computing these ratios, earnings represent income from
continuing operations before taxes, plus fixed charges. Fixed charges
represent total interest expense, including and excluding interest on
deposits, as applicable. We will use a portion of the net proceeds of the
offering to repay $3.3 million of notes payable. Giving effect to the
repayment of this debt, our ratio of earnings to fixed charges would be
1.46x (including deposit interest) and 14.20x (excluding deposit interest)
for the six months ended June 30, 1999 and 1.51x (including deposit
interest) and 15.10x (excluding deposit interest) for 1998.
(6) Ratios are calculated on end of period balances except net charge-offs to
average loans.
(7) We calculated both non-performing loans and total loans after subtracting
unearned discounts and net purchase discounts.
(8) We calculated average loan balance after subtracting unearned discounts.
(9) There was no material non-deposit interest expense in 1995 and 1994.
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
You should read the following discussion and analysis of CB&T's financial
condition and results of operations in conjunction with the Consolidated
Financial Statements and related notes included elsewhere in this prospectus.
The reported results of CB&T primarily reflect the operations of Crescent
Bank. For purposes of this section, unless otherwise indicated, "we," "our" or
"us" means CB&T and Crescent Bank.
Our profitability depends primarily on Crescent Bank's net interest income,
which is the difference between interest and dividend income on interest-earning
assets, principally loans, federal funds sold and securities, and interest
expense on interest-bearing deposits and borrowings. Net interest income is
dependent upon the volume of our interest-earning assets and interest-bearing
liabilities, the level of interest rates and the extent to which such rates are
changing. Our profitability also depends, to a lesser extent, on our
noninterest expenses, provision for credit losses, and noninterest income.
Total noninterest expense consists of general, administrative and other
expenses, such as salaries and employee benefits, occupancy expenses, collection
expenses, deposit insurance premiums, and miscellaneous other expenses. We had
net earnings of $3.0 million in the first half of 1999, $4.7 million in 1998 and
$3.0 million in 1997.
In reviewing our operating results and financial condition, you should note
that the high yields on our subprime automobile loans result in the average
yields on our loan portfolio, and our average interest rate spreads and net
interest margins, being substantially higher than those for many commercial
banks. We believe that the higher yields we earn more than offset the higher
noninterest expenses and provisions for credit losses associated with our
subprime automobile loans, and that our returns on average assets and equity
justify the higher risks inherent in our loan portfolio. Because the
origination, purchase and monitoring of our subprime automobile loans require a
large staff, our general and administrative expenses are higher than average.
We also have higher than average provisions for credit losses because over 70%
of our loan portfolio consists of subprime automobile loans.
Crescent Bank's operations and profitability are subject to changes in
interest rates, applicable statutes and regulations and general economic
conditions, as well as other factors beyond Crescent Bank's control.
CHANGES IN FINANCIAL CONDITION
ASSETS. Our total assets increased significantly from $84.2 million at
December 31, 1994 to $282.5 million at December 31, 1998, an annual compounded
growth rate of over 35%. The increase was primarily due to an increase in our
net loan portfolio from $62.5 million at December 31, 1994 to $233.7 million at
December 31, 1998. Subprime automobile loans are our main lending product, and
these loans accounted for a substantial portion of the growth in the loan
portfolio between 1994 and 1998.
Total assets decreased by $6.3 million or 2.2% in the first half of 1999,
as our net loan portfolio declined by $12.4 million or 5.3% during this period.
Purchased automobile loans decreased by $15.8 million or 28.5% in the first half
of 1999, before subtracting net purchase discounts. Our loan purchases
24
<PAGE>
in the first half of 1999 were below the annual rate of purchases in 1998 and
1997, reflecting fewer pools of loans being available at prices acceptable to
us. Our total second mortgages, other consumer loans and commercial business
loans each declined from December 31, 1998 to June 30, 1999 due to repayments
exceeding originations and purchases, with the aggregate decline for these loan
categories being $6.7 million or 15.1%.
Federal funds sold is our second largest asset and has increased
significantly since December 31, 1996. Federal funds sold amounted to $29.0
million or 10.5% of total assets at June 30, 1999, compared to $7.4 million or
4.3% of total assets at December 31, 1996. These assets have little credit risk
or market risk and are a major source of liquidity for us. The yields for these
assets have averaged between 4.71% and 5.52% since 1996.
Our securities available for sale amounted to $18.7 million or 6.8% of
total assets at June 30, 1999, compared to $15.9 million or 5.6% of total assets
at December 31, 1998. These securities primarily consist of U.S. government
securities and mortgage-backed securities.
Total non-performing assets were $4.2 million or 1.54% of total assets at
June 30, 1999, which represents a substantial decline from $6.7 million or 2.36%
of total assets at December 31, 1998. Total non-performing assets ranged from
1.79% of total assets to 2.36% of total assets at the end of each of the last
five years. Non-performing assets increased by $2.3 million or 51.9% in 1998
primarily due to the purchase of $1.3 million of non-performing loans in 1998,
after net purchase discounts. We had net charge-offs of $2.4 million in the
first half of 1999. Our allowance for credit losses amounted to $5.4 million at
June 30, 1999, representing 127.4% of total non-performing loans and 2.2% of
total loans, net of unearned discounts, at that date.
DEPOSITS. We increased our deposits significantly from $77.9 million at
December 31, 1994 to $252.7 million at December 31, 1998 in order to fund our
asset growth. Total deposits decreased by $7.0 million or 2.8% during the first
half of 1999 as our funding needs decreased due to a decline in loan purchases.
Certificates of deposit have accounted for over 90% of our deposits since 1997
and represented 92.4% of total deposits at June 30, 1999. Our certificates of
deposit are sensitive to changes in market interest rates. Retaining and
attracting such deposits depends upon maintaining competitive rates. At June
30, 1999, $137.5 million or 60.5% of our total certificates mature within one
year.
BORROWINGS. We borrowed $8.0 million from the Federal Home Loan Bank
("FHLB") of Dallas in the fourth quarter of 1997 to partially fund loan
purchases. These advances have fixed interest rates and mature between June 1,
2000 and December 1, 2003. CB&T also had $3.3 million of notes payable at June
30, 1999, which represents funds originally borrowed in 1997 or prior years.
These notes payable were primarily used to make capital contributions to
Crescent Bank and will be repaid with the net proceeds from the sale of our
junior subordinated debentures to the trust. See "How Our Net Proceeds Will Be
Used."
SHAREHOLDERS' EQUITY. Total shareholders' equity has increased steadily to
$17.4 million at June 30, 1999 from $5.7 million at December 31, 1994,
reflecting net earnings in each period. As a percentage of total assets,
shareholders' equity has ranged from 5.77% to 6.73% since December 31, 1994. At
June 30, 1999, total shareholders' equity was 6.30% of total assets.
25
<PAGE>
COMPARISON OF OPERATING RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NET EARNINGS. Net earnings increased by $1.1 million or 60.3% in the first
half of 1999 over the same period for 1998. This increase was due to our
election to become a Subchapter S corporation for federal income tax purposes
effective January 1, 1998. As a Subchapter S corporation, the tax liability on
our taxable income is passed through to the holders of our common stock, who pay
federal income taxes on our income at ordinary income rates. Our tax expense
for the first half of 1998 was $1.8 million, primarily due to the write-off of
deferred tax assets and other adjustments related to our change in tax status,
and was $12,000 for the first half of 1999. See Note H of Notes to Consolidated
Financial Statements.
Because of our election to become a Subchapter S corporation in 1998, you
should focus on our pre-tax earnings when comparing these six-month periods.
Our pre-tax earnings decreased by $675,000 or 18.2% in the first half of 1999
from the comparable 1998 period. This decrease was due to the following:
. a $2.1 million or 32.0% increase in our noninterest expenses, and
. a $726,000 or 28.3% increase in our provision for credit losses.
The increase in noninterest expenses primarily resulted from our purchases
of $73.7 million of loans in 1998 and the corresponding increase in personnel to
service those loans. The additional personnel was the primary reason for our
increase in salaries and employee benefits and occupancy expense. We anticipate
our noninterest expense and profitability may significantly fluctuate between
periods based upon the timing and amount of our loan purchases and, to a lesser
extent, other fluctuations in our asset size.
The higher provision for credit losses in the 1999 period was based on the
results of our static pool analysis. See "- Provision for Credit Losses."
These factors were only partially offset by a $2.1 million or 17.9%
increase in our net interest income. The increase in net interest income was
due to the average balance of interest-earning assets increasing faster than
interest-bearing liabilities and, to a lesser extent, an increase in our average
interest rate spread to 8.41% from 7.97%. The higher spread was due to the
yield on our total interest-earning assets increasing by 17 basis points, while
the average rate on our total interest-bearing liabilities decreased by 27 basis
points.
26
<PAGE>
AVERAGE BALANCES, NET INTEREST INCOME AND YIELDS EARNED AND RATES PAID.
The following table presents for the periods indicated the total dollar amount
of interest income from our average interest-earning assets and the resulting
yields, as well as the interest expense on average interest-bearing liabilities,
expressed both in dollars and rates, and the net interest margin. All average
balances are based on daily balances, except that borrowings and shareholders'
equity are based on average monthly balances. We do not believe that these
monthly averages differ significantly from what the daily averages would be.
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------------------------------
1999(1) 1998
---------------------------- ----------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-------- -------- ----- ------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans (2) $250,109 $19,637 15.70% $219,183 $17,010 15.52%
Taxable securities (3) 20,595 552 5.36 20,558 665 6.47
Non-taxable securities (4) 2,555 57 4.46 2,682 60 4.47
Federal funds sold 24,725 582 4.71 22,690 571 5.03
-------- ------- -------- -------
Total interest-earning assets 297,984 20,828 13.98 265,113 18,306 13.81
------- -------
Net purchase discounts and
allowance for credit losses (23,721) (19,498)
Noninterest-earning assets 7,324 9,019
-------- --------
Total assets $281,587 $254,634
======== ========
Interest-bearing liabilities:
Deposits $239,990 6,632 5.53 $213,173 6,166 5.78
Borrowings 11,474 367 6.40 12,124 412 6.80
-------- ------- -------- -------
Total interest-bearing
liabilities 251,464 6,999 5.57 225,297 6,578 5.84
------- -------
Noninterest-bearing liabilities:
Deposits 10,648 7,841
Other liabilities 1,950 2,531
-------- --------
Total liabilities 264,062 235,669
Shareholders' equity 17,525 18,965
-------- --------
Total liabilities and
shareholders' equity $281,587 $254,634
======== ========
Net interest income; average
interest rate spread $13,829 8.41% $11,728 7.97%
======= =======
Net interest margin (5) 9.28% 8.85%
Average interest-earning
assets to average
interest-bearing liabilities 118.50% 117.67%
======== ========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------------------------------------------------------
1998 1997 1996
----------------------------- ----------------------------- ----------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
-------- -------- ------ ------- -------- ------ ------- -------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(Dollars In Thousands)
Interest-earning assets:
Loans (2) $221,616 $34,535 15.58% $168,014 $27,337 16.27% $129,385 $20,617 15.93%
Taxable securities (3) 19,865 1,205 6.07 21,307 1,344 6.31 13,502 878 6.50
Non-taxable securities (4) 2,682 119 4.44 2,224 98 4.41 2,057 89 4.33
Federal funds sold 28,867 1,527 5.29 14,076 777 5.52 10,335 536 5.19
-------- ------- -------- ------- -------- -------
Total interest-earning assets 273,030 37,386 13.69 205,621 29,556 14.37 155,279 22,120 14.25
------- ------- -------
Net purchase discounts and
allowance for credit losses (20,237) (11,845) (10,368)
Noninterest-earning assets 7,875 4,213 3,508
-------- -------- --------
Total assets $260,668 $197,989 $148,419
======== ======== ========
Interest-bearing liabilities:
Deposits $222,459 12,911 5.80 $172,715 10,253 5.94 $128,219 7,696 6.00
Borrowings 11,954 811 6.78 3,496 228 6.52 2,380 173 7.27
-------- ------ ------ ------ -------- -----
Total interest-bearing
liabilities 234,413 13,722 5.85 176,221 10,481 5.95 130,599 7,869 6.03
------ ------ -----
Noninterest-bearing liabilities:
Deposits 8,406 8,510 8,661
Other liabilities 2,147 2,069 2,020
-------- -------- --------
Total liabilities 244,966 186,790 141,280
Shareholders' equity 15,702 11,199 7,139
-------- -------- --------
Total liabilities and
shareholders' equity $260,668 $197,989 $148,419
======== ======== ========
Net interest income; average
interest rate spread $23,664 7.84% $19,075 8.43% $14,251 8.22%
======= ======= =======
Net interest margin (5) 8.67% 9.28% 9.18%
Average interest-earning
assets to average
interest-bearing liabilities 116.47% 116.69% 118.90%
======== ======== ========
</TABLE>
27
<PAGE>
================================================================================
(1) At June 30, 1999, the weighted average yields earned and rates paid were as
follows: loans, 17.13%; taxable securities, 5.24%; non-taxable securities,
4.65%; federal funds sold, 5.40%; total interest-earning assets, 15.46%;
deposits, 5.28%; borrowings, 6.45%; total interest-bearing liabilities,
5.56%; and average interest rate spread, 9.90%.
(2) The loans exclude unearned discounts and include net purchase discounts and
the allowance for credit losses. Includes non-accruing loans.
(3) Includes mortgaged-backed securities, securities of the U.S. government and
its agencies, and FHLB stock.
(4) Includes municipal bonds. We did not increase the yield on these
securities to a tax equivalent basis.
(5) We determined net interest margin by dividing net interest income by
average interest-earning assets.
28
<PAGE>
RATE/VOLUME ANALYSIS. The following table shows the extent to which
changes in interest rates and changes in the volume of interest-earning assets
and interest-bearing liabilities affected our interest income and expense during
the periods indicated. For each category of interest-earning assets and
interest-bearing liabilities, information is provided on changes attributable to
(1) changes in volume (change in volume multiplied by prior year rate), and (2)
changes in rate (change in rate multiplied by prior year volume). The combined
effect of changes in both rate and volume has been allocated proportionately to
the change due to rate and the change due to volume.
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31, Year Ended December 31,
1999 vs. 1998 1998 vs. 1997 1997 vs. 1996
------------------------------- ---------------------------------- -----------------------------
Increase(Decrease) Increase(Decrease) Increase(Decrease
Due to Total Due to Total Due to Total
---------------- Increase ------------------- Increase ---------------- Increase
Rate Volume (Decrease) Rate Volume (Decrease) Rate Volume (Decrease)
------ ------ ---------- ------- ------ ---------- ---- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(In Thousands)
Interest-earning assets:
Loans(1) $ 201 $2,426 $2,627 $(1,099) $8,297 $7,198 $443 $6,277 $6,720
Taxable securities (2) (114) 1 (113) (50) (89) (139) (25) 491 466
Non-taxable securities (3) -- (3) (3) 1 20 21 2 7 9
Federal funds sold (28) 39 11 (31) 781 750 36 205 241
----- ------ ------ ------- ------ ------ ---- ------ ------
Total interest-earning assets 59 2,463 2,522 (1,179) 9,009 7,830 456 6,980 7,436
----- ------ ------ ------- ------ ------ ---- ------ ------
Interest-bearing liabilities:
Deposits (256) 722 466 (223) 2,881 2,658 (83) 2,640 2,557
Borrowings (43) (2) (45) 10 573 583 (15) 70 55
----- ------ ------ ------- ------ ------ ---- ------ ------
Total interest-bearing
liabilities (299) 720 421 (213) 3,454 3,241 (98) 2,710 2,612
----- ------ ------ ------- ------ ------ ---- ------ ------
Increase (decrease) in net
interest income $ 358 $1,743 $2,101 $ (966) $5,555 $4,589 $554 $4,270 4,824
===== ====== ====== ======= ====== ====== ==== ====== ======
</TABLE>
______________
(1) The impact of the loans excludes unearned discounts and includes net
purchase discounts and the allowance for credit losses.
(2) Includes mortgaged-backed securities, securities of the U.S. government and
its agencies, and FHLB stock.
(3) Includes municipal bonds.
29
<PAGE>
INTEREST INCOME. Our total interest income increased by $2.5 million or
13.8% in the first half of 1999 over the comparable 1998 period. This increase
was primarily due to a $32.9 million or 12.4% increase in average interest-
earning assets. Average interest-earning assets were higher primarily due to a
14.6% increase in the average loan portfolio.
The 12.4% increase in average interest-earning assets in the first half of
1999 was significantly lower than the 32.8% increase in 1998 and the 32.4%
increase in 1997. In addition, total interest-earning assets actually decreased
by $3.9 million or 1.4% from December 31, 1998 to June 30, 1999. The lower rate
of increase in average interest-earning assets in the first half of 1999 and the
decline in total interest-earning assets at the end of the period was primarily
due to the significantly lower level of loan purchases in the first half of
1999. Total loans purchased in the six months ended June 30, 1999 was $5.5
million. This amount is well below the total purchases of $73.7 million for all
of 1998 and $51.2 million for all of 1997, before net purchase discounts. While
we continually review pools of loans for possible purchase, the amount of loans
actually purchased can fluctuate significantly from one quarter to the next.
The lower purchases in the first half of 1999 reflect fewer pools of loans being
available at prices acceptable to us.
Interest on loans increased by $2.6 million or 15.4% in the first half of
1999 over the first half of 1998 primarily due to the 14.6% increase in the
average loan portfolio. The increase in the average balance was primarily due
to the purchase of $70.8 million of loans, before net purchase discounts, in the
second half of 1998. Of these purchases, $44.6 million were subprime automobile
loans, $19.1 million were home improvement loans included in second mortgages,
and $7.1 million were mobile home loans included in our other consumer loan
category. The average yield on the loan portfolio increased slightly to 15.70%
in the first half of 1999 from 15.52% in the first half of 1998.
Interest on federal funds sold increased by $11,000 or 1.9% in the first
half of 1999 over the same 1998 period. We use federal funds sold as a major
source of liquidity, and federal funds sold have increased significantly since
1996 as our total assets have grown. The rate of increase in the average
balance slowed to 9.0% in the first half of 1999, but total federal funds sold
of $29.0 million at June 30, 1999 was substantially higher than the $24.7
million average balance for the first six months of 1999. The higher average
balance in the 1999 period was mostly offset by a decline in the average yield
to 4.71% in the first half of 1999 from 5.03% in the first half of 1998,
reflecting declines in market rates of interest.
INTEREST EXPENSE. Our total interest expense increased by $421,000 or 6.4%
in the first half of 1999 over the first half of 1998. This increase was due to
a $26.2 million or 11.6% increase in average interest-bearing liabilities,
primarily certificates of deposit. The effect of the higher average balance was
partially offset by a decrease in the average rate paid on total interest-
bearing liabilities to 5.57% from 5.84% for the first half of 1998.
Interest on deposits increased by $466,000 or 7.6% in the first half of
1999 over the first half of 1998, as total average deposits increased by $26.8
million or 12.6%. Our primary source of funds is certificates of deposit, which
amounted to $227.1 million or 88.3% of total interest-bearing liabilities at
June 30, 1999. We increase our certificates of deposits as needed to fund loan
growth, particularly loan purchases. The average balance of certificates of
deposit increased by $30.0 million or 14.9% in the first half of 1999 over the
same period in 1998. For certificates of deposit under $100,000, the average
30
<PAGE>
balance increased $23.1 million or 13.9%, and the average balance of
certificates of deposit of $100,000 or more increased by $6.9 million or 19.2%.
The average rate paid on deposits decreased to 5.53% in the first half of
1999 from 5.78% in the first half of 1998. The lower rate was primarily due to
lower rates paid on certificates of deposit and, to a lesser extent, money
market accounts. At June 30, 1999, $137.5 million or 60.5% of our total
certificates of deposit mature within one year.
We have not incurred any new borrowings since December 1997, when we
borrowed $9.8 million in connection with loan purchases. Interest on borrowings
decreased by $45,000 or 10.9% in the first half of 1999 over the same period in
1998, as the average balance decreased by $650,000 or 5.4% due to scheduled
repayments. Our notes payable to an independent financial institution have
higher rates than our FHLB advances, and one of the notes has principal payments
of $150,000 per quarter. These principal payments had the effect of reducing
our average rate paid to 6.40% for the first half of 1999 from 6.80% for the
first half of 1998.
PROVISION FOR CREDIT LOSSES. Our provision for credit losses increased by
$726,000 or 28.3% in the first half of 1999 compared to the first half of 1998.
Our subprime automobile loans, which involve higher credit risks than our other
loans, are analyzed as homogeneous pools using a static pool analysis model.
Under this model, we separate the originated automobile loans into separate
pools for tracking purposes based upon the calender quarter in which they were
originated. We then track and monitor the percentage of each quarterly pool
that is charged-off in each subsequent quarter for the life of the loans in that
pool. We review the historical average quarterly charge-offs based upon the age
of the loan and the quarter in which it was originated. We also monitor the
trends in the charge-offs. This analysis is updated monthly, and we use the
results of the analysis to determine the adequacy of our allowance for credit
losses and the amount of our provisions for credit losses.
The provisions for credit losses also are based on our periodic review of
our loan loss experience, known and inherent risks in the loan portfolio,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral, and current economic conditions.
We also take into consideration our dealer reserves on dealer originated
automobile loans and our net purchase discounts on purchased loans.
At June 30, 1999, the allowance for credit losses amounted to $5.4 million,
representing 2.22% of the total loan portfolio, net of unearned discounts, and
127.4% of total nonperforming loans. At December 31, 1998, the allowance was
$4.5 million or 1.73% of the total loan portfolio, net of unearned discounts,
and 67.3% of total nonperforming loans.
None of the allowance for credit losses is allocated to purchased
automobile loans as the net purchase discounts applicable to those loans
generally have been sufficient to cover losses incurred. Any losses incurred on
purchased loans are first charged-off against the net purchase discounts for the
applicable pool of loans. At June 30, 1999, total purchased automobile loans
amounted to $39.8 million, before $8.2 million of net purchase discounts. See
"Business of CB&T - Asset Quality."
31
<PAGE>
NONINTEREST INCOME. Our total noninterest income increased by $54,000 or
4.8% in the first half of 1999 over the same period in 1998. This increase was
primarily due to an increase of $230,000 or 63.7% in loan fees, which consist of
late charges. These fees tend to increase as our average loans outstanding
increase. The higher loan fees were partially offset by decreases of $108,000
or 27.6% in the gain on sale of mortgage loans and $92,000 or 28.6% in credit
life insurance fees. The amount of mortgage loans sold in the first half of
1999 decreased by $4.0 million or 26.2% from the first half of 1998. The
decrease in credit life insurance fees was partially due to an aggregate 20%
reduction by the State of Louisiana in the maximum rate that can be charged for
this insurance. The first 10% reduction was phased in January 1, 1998, and the
second 10% reduction was effective January 1, 1999.
NONINTEREST EXPENSE. Our total noninterest expense increased by $2.1
million or 32.0% in the first half of 1999 over the same period in 1998. This
increase was primarily due to the hiring of additional personnel to handle the
loans we purchased in 1998. Our full-time equivalent employees increased to 234
at June 30, 1999 from 216 at December 31, 1998 and 162 at June 30, 1998. This
increase in personnel was the primary reason for the $1.3 million or 35.5%
increase in salaries and employee benefits, and most of the new staff was added
to the collections and loan operations departments. The additional personnel
also contributed to a $277,000 or 38.3% increase in occupancy expense. We
opened three new loan production offices in 1998 and closed two other loan
production offices in March 1999.
Our salaries and employee benefits expense also increased in the first half
1999 due to higher benefits cost per employee. Our group insurance and worker's
compensation premiums increased faster than the increase in our total employees.
Our group insurance costs increased by $131,000 or 60.1% in the first half of
1999 over the same period in 1998.
Collection expenses, which primarily consist of attorneys' fees and
sheriff's fees, and telephone expenses are largely related to the number of
borrowers we have. These expenses have increased in each period since 1996 as
our loan portfolio in general and subprime automobile loan portfolio in
particular have increased.
INCOME TAX EXPENSE. Because we converted to a Subchapter S corporation
effective January 1, 1998, our income tax expense was $12,000 for the first half
of 1999. We generally are no longer subject to federal or state income taxes.
See "Taxation." In the first half of 1998, our tax expense was $1.8 million,
which consisted of the write-off of deferred tax assets and other adjustments
related to our election to become an S corporation. See Note H of Notes to
Consolidated Financial Statements.
COMPARISON OF OPERATING RESULTS FOR 1998 AND 1997
NET EARNINGS. Net earnings increased by $1.7 million or 56.2% in 1998 over
1997. Because we became a Subchapter S corporation effective January 1, 1998,
we believe you should focus on our pre-tax earnings when comparing these two
years. Our earnings before taxes increased by $1.7 million or 35.9% in 1998
over 1997. This increase was due to the following:
. a $4.6 million or 24.1% increase in net interest income, and
. a $676,000 or 42.4% increase in total noninterest income.
32
<PAGE>
These increases were partially offset by increases of $3.1 million or 28.1% in
noninterest expenses and $453,000 or 9.3% in the provision for credit losses.
INTEREST INCOME. Our total interest income increased by $7.8 million or
26.5% in 1998 over 1997. This increase was due to a $67.4 million or 32.8%
increase in average interest-earning assets, which was partially offset by a
decline in the average yield to 13.69% in 1998 from 14.37% in 1997. The
increase in average interest-earning assets was primarily due to increases of
$53.6 million or 31.9% in the average loan portfolio and $14.8 million or 105.1%
in the average balance of federal funds sold.
The increase in the average loan portfolio in 1998 was primarily due to the
purchase of $36.9 million of subprime automobile loans, before net purchase
discounts, in the last two months of 1997 and to the purchase of $73.7 million
of loans, before net purchase discounts, in 1998. Of the purchases in 1998,
$47.2 million was purchased in the last two months of 1998 before net purchase
discounts, reducing the effect of these purchases on the average balance for
1998.
The average yield on the loan portfolio decreased to 15.58% in 1998 from
16.27% in 1997. This decrease was primarily due to higher than anticipated
prepayments on purchased loans. When purchased loans are prepaid, the related
discounts are recognized into income and the related premiums are amortized into
income. During 1998, we had net premiums of $1.0 million amortized as a
reduction of interest income on loans, while in 1997 we had net discounts of
$587,000 recognized as an addition to interest income. The recognition of
discounts and premiums are accounted for as a yield adjustment.
Interest on federal funds sold increased by $750,000 or 96.5% in 1998 over
1997, due to the average balance more than doubling in 1998. Federal funds sold
amounted to 8.2% of total assets at December 31, 1998 compared to 7.1% of total
assets at December 31, 1997. The impact on interest income from the higher
average balance in 1998 was partially offset by a decline in the average yield
to 5.29% in 1998 from 5.52% in 1997, reflecting declines in market rates of
interest.
Interest on taxable securities decreased by $139,000 or 10.3% in 1998 from
1997. This decrease was due to a $1.4 million or 6.8% decline in the average
balance and a decline in the average yield to 6.07% in 1998 from 6.31% in 1997.
These declines were primarily due to increased repayments on our mortgaged-
backed securities, which generally have higher yields than our other taxable
securities.
INTEREST EXPENSE. Our total interest expense increased by $3.2 million or
30.9% in 1998 over 1997. This increase was due to a $58.2 million or 33.0%
increase in average interest-bearing liabilities.
Interest on deposits increased by $2.7 million or 25.9%, due to a $49.7
million or 28.8% increase in the average balance. The increase in the average
balance was primarily due to increases of $34.9 million or 25.1% in certificates
of deposit with balances below $100,000 and $12.9 million or 50.6% in jumbo
certificates. The average rate paid on deposits decreased to 5.80% in 1998 from
5.94% in 1997, reflecting lower rates on our certificates of deposit as market
rates declined.
Interest on borrowings increased by $583,000 or 255.7% in 1998 over 1997.
This increase was due to an $8.4 million or 241.0% increase in the average
balance, reflecting the $8.0 million of Federal Home Loan Bank advances incurred
in the fourth quarter of 1997 to partially fund our loan purchases. In
addition, we borrowed $1.8 million from an unaffiliated financial institution in
the fourth quarter of 1997 to fund an additional capital contribution to
Crescent Bank.
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PROVISION FOR CREDIT LOSSES. Our provision for credit losses increased by
$453,000 or 9.3% in 1998 over 1997. The total provision reflects the factors
discussed above under "- Comparison of Operating Results for the Six Months
Ended June 30, 1999 and 1998 - Provision for Credit Losses" and the increase in
our loan portfolio in 1998. Over 90% of the allowance for credit losses was
allocated to originated automobile loans at both December 31, 1998 and 1997. In
1998, we increased our allowance for other consumer loans by $127,000, as these
loans increased by $12.7 million in 1998.
NONINTEREST INCOME. Our total noninterest income increased by $676,000 or
42.4% in 1998 over 1997. This increase was primarily due to an increase of
$554,000 or 281.2% in gain on sale of mortgage loans. We substantially
increased our mortgage banking activities in 1998. We originated $30.6 million
of residential loans held for sale in 1998, compared to $9.1 million in 1997.
We sold $32.2 million of residential loans held for sale in 1998, compared to
$6.8 million in 1997. The loans are sold with servicing released, and we
recognize a gain by selling the servicing rights. See "Business of CB&T -
Secondary Market Activities."
Our loan fees increased by $222,000 or 37.1% in 1998 over 1997, reflecting
the increase in our average loan portfolio.
Credit life insurance fees decreased by $111,000 or 15.7% in 1998 from
1997, primarily due to a 10% reduction by the State of Louisiana in the maximum
rate that can be charged for this insurance.
NONINTEREST EXPENSE. Our total non-interest expense increased by $3.1
million or 28.1% in 1998 over 1997. The increase was primarily due to the
hiring of additional personnel and the opening of three new loan production
offices in 1998. We increased our full-time equivalent employees to 216 at
December 31, 1998 from 150 at December 31, 1997 to handle our increased loan
originations and purchases, as well as the collection efforts on these loans.
The increased personnel is the primary reason for the $1.7 million or 26.8%
increase in salaries and employee benefits.
The $422,000 or 37.4% increase in occupancy expense was primarily due to
the new loan production offices opened in 1998 and the increases in staff.
Collection, telephone and printing and postage expenses each increased by
over 50% primarily due to the growth in the loan portfolio and the number of
borrowers.
INCOME TAX EXPENSE. Our income tax expense was $1.8 million for each of
1998 and 1997. The tax expense in 1998 consisted of the write-off of deferred
tax assets and other adjustments related to our election to become a Subchapter
S corporation. Our effective tax rate was 37.4% of our pre-tax earnings in 1997.
COMPARISON OF OPERATING RESULTS FOR 1997 AND 1996
NET EARNINGS. Our net earnings increased by $126,000 or 4.3% in 1997 over
1996 due to the following:
. a $4.8 million or 33.9% increase in net interest income, and
. a $178,000 or 12.6% increase in noninterest income.
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<PAGE>
These increases were partially offset by increases of $2.7 million or 32.5% in
noninterest expenses, $2.0 million or 66.5% in the provision for credit losses,
and $240,000 or 15.3% in income tax expense.
INTEREST INCOME. Our total interest income increased by $7.4 million or
33.6% in 1997 over 1996, due to an increase of $50.3 million or 32.4% in average
interest-earning assets and an increase in the average yield to 14.37% in 1998
from 14.25% in 1997. Average interest-earning assets increased primarily due to
the following increases:
. $38.6 million or 29.9% in average loans,
. $7.8 million or 57.8% in average taxable securities, and
. $3.7 million or 36.2% in average federal funds sold.
Interest on loans increased by $6.7 million or 32.6% in 1997 over 1996.
The increase in the average loan portfolio in 1997 was primarily due to an
increase in dealer-originated, subprime automobile loans. These loans increased
to $124.7 million at December 31, 1997 from $109.4 million at December 31, 1996,
net of unearned discounts. In addition, first mortgage, one- to four-family
residential loans increased by $11.0 million or 76.7% during 1997. The average
yield on the loan portfolio increased to 16.27% in 1997 from 15.93% in 1996.
Interest on taxable securities increased by $466,000 or 53.1% in 1997 over
1996, due to the $7.8 million or 57.8% increase in the average balance. We
purchased $8.6 million of mortgage-backed securities and $2.5 million of U.S.
government and agency securities in 1997. These purchases exceeded the $6.3
million of repayments and $866,000 of sales of securities in 1997. The
increased average balance was partially offset by a decline in the average yield
to 6.31% in 1997 from 6.50% in 1996.
Interest on federal funds sold increased by $241,000 or 45.0% in 1997 over
1996, due to the 36.2% increase in the average balance and an increase in the
average yield to 5.52% in 1997 from 5.19% in 1996.
INTEREST EXPENSE. Our total interest expense increased by $2.6 million or
33.2% in 1997 over 1996, due to a $45.6 million or 34.9% increase in the average
balance of interest-bearing liabilities to fund asset growth.
Interest on deposits increased by $2.6 million or 33.2% in 1997 over 1996,
primarily due to an increase of $44.5 million or 34.7% in the average balance.
The increase in the average balance was primarily due to increases of $40.1
million or 40.5% in certificates of deposit with balances below $100,000 and
$4.7 million or 22.3% in jumbo certificates. The average rate paid on deposits
decreased to 5.94% in 1997 from 6.00% in 1996.
Interest on borrowings increased by $55,000 or 31.8% in 1997 over 1996, as
we incurred $8.0 million of FHLB advances in the fourth quarter of 1997 to fund
loan purchases. CB&T also borrowed $1.8 million from an unaffiliated financial
institution in the fourth quarter of 1997 to make an additional capital
contribution to Crescent Bank.
PROVISION FOR CREDIT LOSSES. Our provision for credit losses increased by
$2.0 million or 66.5% in 1997 over 1996. The allowance for credit losses
allocated to originated automobile loans increased by
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$1.3 million or 37.9% from December 31, 1996 to December 31, 1997, primarily
reflecting the growth in this portfolio in 1997.
During 1997, we also increased the allowance allocated to our residential
first mortgage loans by $54,000 and on our commercial business loans by $19,000.
These increases reflected the growth in these two loan categories in 1997.
NONINTEREST INCOME. Our total noninterest income increased by $178,000 or
12.6% in 1997 over 1996, due to increases of $83,000 or 16.1% in loan fees and
$126,000 or 177.5% in gain on sale of sale of mortgage loans. We sold $6.8
million of loans in 1997 and $7.0 million of loans in 1996.
Each of the other categories of noninterest income declined in 1997 from
1996. Management believes that none of these decreases were significant.
NONINTEREST EXPENSE. Our total noninterest expense increased by $2.7
million or 32.5% in 1997 over 1996. This increase was primarily due to an
increase in personnel to 150 full-time equivalent employees at December 31, 1997
from 104 at December 31, 1996 to handle our growth in assets. The increased
personnel is the primary reason for the $1.5 million or 32.4% increase in
salaries and employee benefits.
Occupancy expense increased by $340,000 or $43.1% in 1997 over 1996
primarily due to the additional personnel and the opening of three new loan
production offices in 1997.
Other noninterest expense primarily consists of office supplies, data
processing, contributions and other miscellaneous expenses. The $158,000 or
21.7% increase in 1997 was primarily due to a loss incurred in discontinuing the
activities of a subsidiary involved in selling repossessed automobiles.
INCOME TAX EXPENSE. Our income tax expense increased by $240,000 or 15.3%
in 1997 over 1996. Our pre-tax earnings increased by 8.2% in 1997, and our
effective tax rate was 37.4% in 1997 and 35.1% in 1996.
OUR EXPOSURE TO CHANGES IN INTEREST RATES
GENERAL. Like other financial institutions, we are subject to market risk.
Market risk is the risk that a company can suffer economic loss due to changes
in the market values of various types of assets or liabilities. As a financial
institution, we make a profit by accepting and managing various types of risks.
The most significant of these risks are credit risk and interest rate risk. See
"Business of CB&T - Asset Quality" for a discussion of credit risk. The
principal market risk for us is interest rate risk. Interest rate risk is the
risk that changes in market interest rates will cause significant changes in net
interest income because interest-bearing assets and interest-bearing liabilities
mature at different intervals and reprice at different times.
We have established an asset and liability management committee to monitor
interest rate risk. This committee is made up of senior officers from finance,
lending and deposit operations. The committee meets at least quarterly, reviews
our current interest rate risk position, and determines strategies to pursue for
the next quarter. The activities of this committee are reported to the Board of
Directors of Crescent Bank quarterly. Between meetings the members of this
committee are involved in
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setting rates on deposits, setting rates on loans and serving on loan committees
where they work on implementing the established strategies.
We monitor our interest rate risk through both gap reports, as well as
financial modeling reports that estimate the impact of increases and decreases
of 2% in interest rates on our net interest income and our net portfolio equity.
Each of these are discussed below.
GAP REPORTS. The gap reports estimate the amount of our interest-earning
assets and interest-bearing liabilities that mature or reprice within a
specified period, based upon various assumptions. A gap is considered positive
when the amount of interest-rate sensitive assets repricing or maturing within a
specified period exceeds the amount of interest-rate sensitive liabilities
repricing or maturing within such period, and is considered negative when the
amount of interest-rate sensitive liabilities repricing or maturing within a
specified period exceeds the amount of interest-rate sensitive assets repricing
or maturing within such period. Generally, during a period of rising interest
rates, a negative gap within shorter maturities would adversely affect net
interest income, while a positive gap within shorter maturities would result in
an increase in net interest income. During a period of falling interest rates,
a negative gap within shorter maturities would result in an increase in net
interest income while a positive gap within shorter maturities would have the
opposite effect. However, the effects of a positive or negative gap are
impacted, to a large extent, by consumer demand and by discretionary pricing by
our management.
Our subprime automobile loans primarily have fixed interest rates at or
near the maximum rates permitted by state law. If market interest rates
increase, it is unlikely that we would be able to increase the interest rates on
new loans at the same rate as increases in market rates of interest on our
certificates of deposit, unless the maximum permissible rates on these loans
were also increased. As a result, while these loans have short maturities, our
sensitivity to prolonged increases in interest rates as shown in the following
table may be understated due to limitations on our ability to charge higher
rates.
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The following table presents the difference between our interest-earning
assets and interest-bearing liabilities within specified maturities at June 30,
1999. This table does not necessarily indicate the impact of general interest
rate movements on our net interest income, because the repricing of certain
assets and liabilities is subject to competitive and other limitations. As a
result, certain assets and liabilities indicated as maturing or otherwise
repricing within a stated period may in fact mature or reprice at different
times and at different volumes.
<TABLE>
<CAPTION>
June 30, 1999
--------------------------------------------------------------------------------------------
0 Months Over Three Over One Over Three Over Five
Through Through Through Through Through Over Ten
Three Months 12 Months Three Years Five Years Ten Years Years Total
------------ ---------- ----------- ---------- --------- -------- --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans(1)(2):
Consumer automobile:
Originated loans $ 651 $ 4,497 $ 66,702 $60,857 $ 29 $ -- $132,736
Purchased loans 829 5,432 28,171 5,354 13 27 39,826
One- to four-family residential 11,333 4,449 5,088 3,887 6,374 2,516 33,647
Other consumer 2,496 1,127 1,535 3,094 2,660 139 11,051
Commercial real estate 15,689 -- 606 82 -- 9 16,386
Other loans 8,671 630 945 160 -- -- 10,406
Federal funds sold 29,030 -- -- -- -- -- 29,030
Securities available for sale -- 6,607 8,152 3,103 799 -- 18,661
Mortgage loans held for sale 453 -- -- -- -- -- 453
FHLB stock 867 -- -- -- -- -- 867
------- -------- -------- ------- ------- ------- --------
Total interest-earning assets 70,019 22,742 111,199 76,537 9,875 2,691 293,063
------- -------- -------- ------- ------- ------- --------
Interest-bearing liabilities:
Noninterest-bearing demand
deposits(3) 2,122 4,919 1,794 1,689 -- -- 10,524
NOW and savings accounts (4) 379 1,185 1,658 1,516 -- -- 4,738
Money market accounts (4) 546 1,705 614 546 -- -- 3,411
Certificates of deposit (5) 30,392 107,078 84,462 5,171 -- -- 227,103
Borrowings 2,124 3,000 3,200 3,000 -- -- 11,324
------- -------- -------- ------- ------- ------- --------
Total interest-bearing liabilities 35,563 117,887 91,728 11,922 -- -- 257,100
------- -------- -------- ------- ------- ------- --------
Interest rate sensitivity gap $34,456 $(95,145) $ 19,471 $64,615 $ 9,875 $ 2,691 $ 35,963
======= ======== ======== ======= ======= ======= ========
Cumulative interest rate
sensitivity gap $34,456 $(60,689) $(41,218) $23,397 $33,272 $35,962
======= ======== ======== ======= ======= =======
Percentage of cumulative gap
to total assets (6) 11.74% (20.67)% (14.04)% 7.97% 11.33% 12.25%
======= ======== ======== ======= ======= ======
Cumulative ratio of interest-
earning assets to interest-
bearing liabilities 13.40% (23.61)% (16.03)% 9.10% 12.94% 13.99%
======= ======== ======== ======= ======= ======
</TABLE>
(Footnotes are on following page)
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__________________________
(1) Loans exclude unearned discounts and include net purchase discounts and the
allowance for credit losses.
(2) Adjustable-rate assets are included in the period in which interest rates
are next scheduled to adjust rather than in the period in which they are
due, and fixed-rate assets are included in the periods in which they are
scheduled to be repaid based on scheduled amortization, without reflecting
any estimated prepayments.
(3) We assume that noninterest-bearing demand accounts which mature or reprice
within three months are at least equal to our cash and due from banks. The
remaining amount of these accounts is spread over time based on industry-
accepted standards.
(4) We assign a decay factor to these accounts using statistical analysis and
financial modeling, based upon industry-accepted standards.
(5) We assumed that certificates of deposit will not be withdrawn prior to
maturity. Excludes $372,000 of accrued interest payable.
(6) Based on total assets of $293.6 million before subtracting net purchase
discounts.
Our June 30, 1999 gap report shows that we have a positive three-month gap
of $34.5 million or 11.7% of total assets at that date, before subtracting net
purchase discounts. This is primarily due to our federal funds sold and the
substantial portion of our residential real estate, commercial real estate and
commercial business loans that have interest rates which float based upon a
specified prime rate.
At June 30, 1999, we have a negative one-year cumulative gap of $60.7
million or 20.7% of total assets, before subtracting net purchase discounts. We
have substantially fewer assets that are scheduled to reprice or mature between
three and 12 months of June 30, 1999. Our certificates of deposit that are
scheduled to mature within one year exceed our total interest-earning assets
estimated to reprice or mature within one year by $44.7 million.
FINANCIAL MODELING REPORTS. We also monitor interest rate risk
quantitatively by measuring the potential changes in net interest income and net
portfolio value based on various immediate changes in market interest rates. An
unaffiliated third party prepares these reports for us each quarter based on
information provided by us. The following table shows the changes in net
interest income and net portfolio value for immediate sustained parallel shifts
of 2% in market interest rates as of June 30, 1999.
Assumed change in interest rates from
June 30, 1999
-------------------------------------
+2% -2%
----------------- ----------------
Expected change in:
Net interest income 0.2% (0.6)%
Net portfolio value (5.2) 3.9
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<PAGE>
The change in net interest income from a change in market rates is a short-
term measure of interest rate risk. The above results indicate that a 2% change
in interest rates would have a minimal effect on our net interest income.
Net portfolio value is the difference between the market value of our
financial assets and our liabilities, with adjustments made for off-balance
sheet items. This concept is also known as market value of portfolio equity.
The above table shows that our net portfolio value would decrease slightly if
interest rates rise 2% and increase slightly if interest rates fall 2%.
The gap and financial modeling reports each show a level of interest rate
risk that is within the limits established by our Board of Directors. However,
we are aware that any method of measuring interest rate risk, including those
set forth above, has certain shortcomings. For example, certain assets and
liabilities may have similar maturities or repricing dates but their repricing
rates may not follow the general trend in market interest rates. Also, as a
result of competition, the interest rates on certain assets and liabilities may
fluctuate in advance of changes in market interest rates while rates on other
assets and liabilities may lag market rates. In addition, any projection of a
change in market rates requires that prepayment rates on loans and decay rates
on transaction accounts be projected, and those projections may be inaccurate.
We focus on the change in net interest income and the change in net portfolio
value as a result of immediate and sustained parallel shifts in interest rates
as a balanced approach to monitoring interest rate risk.
OUR STRATEGIES TO MINIMIZE INTEREST RATE RISK. We attempt to minimize our
risk of changing interest rates by using the following strategies:
. originate and purchase automobile loans with terms to maturity of 18
to 60 months;
. maintain a significant balance of federal funds sold;
. originate commercial real estate and commercial business loans
primarily with adjustable interest rates tied to a specified prime rate
and short terms to maturity; and
. increase certificates of deposit with maturities over one year.
LIQUIDITY AND CAPITAL RESOURCES
The term "liquidity" refers to our ability to generate adequate amounts of
cash for funding loan originations, loan purchases, deposit withdrawals,
maturities of certificates of deposit and borrowings, and operating expenses.
Our primary sources of internally generated funds are principal repayments and
payoffs of loans, cash flows from operations, and proceeds from sales of loans.
External sources of funds include increases in deposits and borrowings.
Sources of funds for Crescent Bank such as loan repayments and deposits
flows are greatly influenced by prevailing interest rates, economic conditions
and competition. Other sources of funds such as borrowings and maturities of
securities are more reliable or predictable. At June 30, 1999, we had $31.2
million or 11.3% of our total assets in federal funds sold and cash and due from
banks. At that date, we also had $18.7 million of securities available for sale
and lines of credit aggregating $14.7 million, which are available to meet
liquidity needs. We regularly review cash flow needs to fund
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<PAGE>
operations. We believe that the resources described above are adequate to meet
our requirements for the foreseeable future.
Our operating activities generated cash in the first half of 1999 and in
1998, 1997 and 1996 primarily as a result of net earnings in each period. The
adjustments to reconcile net earnings to net cash provided by operations during
the periods presented consisted primarily of the origination and sale of loans
held for sale, the provisions for credit losses, and the net accretion of
discounts and premiums on purchased loans. Our primary investing activities are
the origination and purchase of loans, proceeds from repayments and prepayments
on existing loans and securities, and increases in federal funds sold. Investing
activities used net cash in each of 1998, 1997 and 1996 and provided a small
amount of cash in the first half of 1999 due to a decrease in the loan portfolio
in the 1999 period. The primary financing activities consist of deposits, FHLB
advances and distributions to our shareholders. Financing activities provided
net cash in each of the periods presented except for the first half of 1999,
when deposits decreased. Total cash and cash equivalents decreased by $1.5
million in the first half of 1999 after increasing by $1.1 million in each of
1998 and 1996. Total cash and cash equivalents decreased by $138,000 in 1997.
Total cash and cash equivalents amounted to $2.1 million at June 30, 1999.
At June 30, 1999, Crescent Bank had $7.7 million of outstanding commitments
to extend credit, plus $251,000 of standby letters of credit. See Note J of
Notes to Consolidated Financial Statements. In addition, as of June 30, 1999,
the total amount of certificates of deposit which were scheduled to mature in
the following 12 months was $137.5 million. We believe that we have adequate
resources to fund all of our commitments and that we can adjust the rate on
certificates of deposit to retain deposits in changed interest rate
environments. Increases in market interest rates would increase our cost of
funds. If we require funds beyond our internal funding capabilities, advances
from the FHLB of Dallas are available as an additional source of funds.
We are required to maintain regulatory capital sufficient to meet various
ratios. At June 30, 1999, both CB&T and Crescent Bank exceeded each of its
capital requirements. See Note M of Notes to Consolidated Financial Statements.
THE YEAR 2000
GENERAL. The year 2000 issue confronting us, as well as our suppliers,
customers, customers' suppliers and competitors, centers on the inability of
computer systems to recognize the year 2000. Computer programs and systems that
use two digits rather than four to identify the applicable year will recognize
"00" as the year 1900 rather than the year 2000 unless they are corrected or
replaced.
Like most financial service providers, we may be significantly affected by
the year 2000 issue due to our dependence on technology and date-sensitive data.
Computer software, hardware and other equipment, both within and outside our
direct control, and third parties with whom we electronically or operationally
interface are likely to be affected. If computer systems are not modified in
order to be able to identify the year 2000, many computer applications could
fail or create erroneous results. In this event, calculations which rely on
date field information, such as interest, payment or due dates and other
operating functions, could generate results which are significantly misstated.
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In accordance with federal regulatory pronouncements, our year 2000 plan
addressed issues involving awareness, assessment, renovation, validation,
implementation and contingency planning. These phases are discussed below.
AWARENESS AND ASSESSMENT. We have a year 2000 team, consisting of our
chief operating officer, our chief financial officer, our computer services
manager, and an assistant vice president who is our year 2000 project manager
and five other individuals, which is responsible for addressing year 2000
issues. The year 2000 team periodically reports to the Board of Directors its
actions and findings. In addition to internal resources, we are utilizing
external resources to implement our year 2000 program. We have contracted with
outside consultants to verify our assessment of our year 2000 problems and to
assist us with our remediation efforts.
Management has conducted an assessment of all software, hardware,
environmental systems and other computer-controlled systems. In addition,
management has identified and developed an inventory of all technological
components and vendors. One service provider was identified as "mission
critical," where the failure to become year 2000 compliant in a timely manner
could cause major operational risks or disruptions.
RENOVATION PHASE HAS BEEN COMPLETED. We upgraded our in-house hardware and
software that was mission critical or had applications with date sensitive
areas. Our data processing and items processing are handled by two independent
third party data centers, and both centers have indicated that they completed
their renovation process.
OUR VALIDATION OR TESTING PHASE IS NEARLY COMPLETED. During 1998, we
tested our loan origination, loan servicing, deposits, withdrawal and general
ledger activities for year 2000 compliance. All teller terminals and general
ledger posting terminals were tested, and different tests were conducted with
our service providers and software vendors. Our service providers and software
vendors were examined by the Federal Financial Institutions Examination Council,
which consists of federal banking agencies, for year 2000 compliance. However,
neither the council nor its member agencies certify the year 2000 readiness of
any service provider or vendor. We explored during 1999 the steps involved in
switching our data processing and items processing to different service
providers in the event our current providers were unable to become year 2000
compliant in a timely manner. Based on the results of the testing to date, we
do not believe that a switch to new service providers will be necessary.
Additional simulation and other testing began in June 1999 and is scheduled to
be completed in the third quarter.
IMPLEMENTATION PHASE IS NEARLY COMPLETED. Additional testing was conducted
in the first quarter of 1999, and the implementation phase has now been
completed. We believe that all in-house hardware and software that is critical
and date sensitive is year 2000 compliant. In June 1999, we converted to a new
software system for our transactions with our Federal Reserve Bank and also
installed new machines and processors to handle loan payments. Testing and
validation of these new systems is scheduled to be completed in the third
quarter.
CONTINGENCY PLANNING. We have adopted a contingency plan in the event
that one or more of our internal or external computer systems fail to operate on
or after January 1, 2000. Testing and independent review of this plan began in
May 1999 and is scheduled to be completed in the third quarter.
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<PAGE>
Our $14.7 million of lines of credit can be used for liquidity purposes if
other sources of funds are not available when needed. These lines can be used
to cover any higher than normal deposit withdrawals in late 1999. We can also
obtain short-term FHLB advances if necessary.
RISKS. If one or more internal or external computer systems fail to
operate properly on or after January 1, 2000, we may be unable to process
transactions, prepare statements or engage in similar normal business
activities. If all transactions were required to be handled manually due to
computer or other failures, we would need to hire additional personnel which
would significantly increase our expenses.
In the event any utility companies were unable to provide electricity or
other needed services to our offices or to the automobile dealers that we do
business with, our operations would be materially disrupted. We are unable to
provide any assurances as to the year 2000 readiness of the utility companies.
In addition, while we believe the testing described above was done in accordance
with applicable regulatory guidelines, we are unable to provide any assurances
that the testing took into account all problems that may develop on or after
January 1, 2000.
We believe we have taken appropriate steps with respect to matters that are
within our control in order to become ready for the year 2000 in a timely
manner. Based on the steps taken to date, including testing and other
documentation, management believes our mission critical service provider is year
2000 compliant and that issues related to the year 2000 will not have a material
adverse effect on our liquidity, capital resources or consolidated results of
operations. However, we are unable to provide any assurances that we have
foreseen all problems that may develop on or after January 1, 2000 or that we
have taken all actions that may be considered necessary in hindsight. In
addition, the readiness of all third parties, including customers and suppliers,
is inherently uncertain and cannot be guaranteed by us. While our outside
service providers have shared with us their testing results, the findings of
examinations of them by regulatory authorities and their responses to such
examinations, none of the service providers have provided us with enforceable
assurances. Our mission critical service provider has indicated in writing that
it is not making any express or implied representation or warranty as to its
year 2000 readiness.
COSTS. We currently estimate the total cost of becoming year 2000
compliant to be approximately $267,000, of which approximately $136,000 has been
incurred as of June 30, 1999.
STATUS OF BORROWERS AND OTHER CUSTOMERS. Our customer base consists
primarily of individuals who use our services for personal, household or
consumer uses. Management believes these customers are not likely to
individually pose material year 2000 risks directly. Most of our loans are
consumer or residential in nature.
We may experience an increase in problem loans and credit losses if our
commercial borrowers fail to respond to year 2000 issues. In addition, higher
funding costs may result if consumers react to publicity about the issue by
withdrawing deposits. In response to these concerns, we implemented a customer
awareness program to provide deposit customers, borrowers and others with an
understanding of our year 2000 readiness. We also conducted a survey of
significant credit customers to determine their year 2000 readiness and to
evaluate the level of potential credit risk to us. Our loan officers contacted
customers who did not complete the survey and then filled out a questionnaire.
Customers who failed to respond or who did not show significant progress by
January 1999 were reviewed by our
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loan committee. We believe that the year 2000 status of these borrowers does not
present any material risks to us.
For new commercial real estate and commercial business loans, we require
the borrower to represent that it expects to become year 2000 compliant in a
timely manner and that it will promptly notify us if the borrower or any of its
material vendors or suppliers will not achieve compliance timely, in each case
excluding any noncompliance that would not have a material adverse effect on the
borrower's financial condition. We believe these representations will assist
management in monitoring the status of new commercial borrowers.
RECENT ACCOUNTING STANDARDS
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," which requires that an entity recognize all derivatives
as either assets or liabilities in the statement of financial position and
measure those instruments at fair value. The statement is effective January 1,
2001 for us, and management believes that it will not have a material effect on
our consolidated financial statements.
BUSINESS OF CB&T
GENERAL
CB&T is a bank holding company that was incorporated in 1994. We are
primarily engaged in the business of originating and purchasing subprime
automobile and other loans through our wholly-owned subsidiary, Crescent Bank.
Crescent Bank is a Louisiana-chartered commercial bank established in 1991. We
obtain funds for lending and other investment activities primarily from
deposits, borrowings, principal repayments on loans, and the sale of loans. The
activities of CB&T at the holding company level are limited. Unless otherwise
noted, all of the activities discussed below are of Crescent Bank.
LENDING ACTIVITIES
GENERAL. Our primary lending activity is the origination and purchase of
subprime automobile loans. Our automobile loans are primarily originated
through agreements we have with automobile dealers in Louisiana, Mississippi,
Tennessee, Georgia and Kentucky. We also purchase pools of automobile loans
originated by other entities throughout the country. To a much lesser extent,
we originate automobile loans directly through our staff.
We also originate and purchase residential and commercial real estate
loans, commercial business loans, and other consumer loans.
We originate residential mortgage loans for sale into the secondary market.
This activity substantially increased in 1998, and we recognize gains on the
sale of the mortgage loans because we sell all related servicing rights.
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<PAGE>
LOAN PORTFOLIO COMPOSITION. Originated and purchased automobile loans
amounted to $202.9 million or 73.9% of the total loan portfolio at June 30,
1999, before unearned discounts and net purchase discounts. At that date, we
had $30.3 million of unearned discounts, which represent interest owed on
originated automobile loans but not yet earned. This precomputed interest is
included in the note the borrower signs and is included in total loans.
Originated and purchased automobile loans amounted to $172.6 million or 70.7% of
the total loan portfolio, net of unearned discounts, at June 30, 1999.
One- to four-family residential loans aggregated $33.6 million or 12.3% of
the total loan portfolio at June 30, 1999. The remaining categories primarily
consisted of commercial real estate loans at $16.4 million, commercial business
loans at $10.4 million, and other consumer loans at $11.1 million as of June 30,
1999.
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The following table shows the composition of our loan portfolio by type of
loan at the dates indicated.
<TABLE>
<CAPTION>
At December 31,
At June 30, ----------------------------------------------------------------------------------------
1999 1998 1997 1996 1995 1994
--------------- --------------- --------------- --------------- --------------- ---------------
Amount % Amount % Amount % Amount % Amount % Amount %
-------- ----- -------- ----- -------- ----- -------- ----- -------- ----- ------- -----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consumer automobile:
Originated loans (1) $163,076 59.4% $158,517 54.8% $154,088 63.9% $136,625 76.7% $ 94,268 71.3% $55,966 68.2%
Purchased loans 39,826 14.5 55,669 19.2 35,548 14.8 -- -- -- -- -- --
-------- ----- -------- ----- -------- ----- -------- ----- -------- ----- ------- -----
Total automobile 202,902 73.9 214,186 74.0 189,636 78.7 136,625 76.7 94,628 71.3 55,966 68.2
One- to four-family
residential:
First mortgage 17,330 6.3 16,160 5.6 25,245 10.5 14,288 8.0 12,958 9.8 10,754 13.1
Second mortgage 16,317 6.0 20,618 7.1 -- -- -- -- -- -- -- --
Other consumer 11,051 4.0 13,022 4.5 342 0.1 379 0.2 277 0.2 207 0.2
Commercial real estate 16,386 6.0 14,482 5.0 13,571 5.6 14,507 8.1 10,751 8.1 6,829 8.3
Commercial business 10,406 3.8 10,841 3.8 12,160 5.1 12,445 7.0 13,998 10.6 8,364 10.2
-------- ----- -------- ----- -------- ----- -------- ----- -------- ----- ------- -----
Total loans 274,392 100.0% 289,309 100.0% 240,954 100.0% 178,244 100.0% 132,252 100.0% 82,120 100.0%
===== ===== ===== ===== ===== =====
Less:
Unearned discounts on
originated automobile
loans 30,340 29,507 29,399 27,198 19,223 10,886
Net purchase discounts 17,360 21,600 14,682 5,694 7,767 7,587
Allowance for credit
losses 5,407 4,484 5,097 3,737 2,141 1,133
-------- -------- -------- -------- -------- -------
Total loans, net $221,285 $233,718 $191,776 $141,615 $103,121 $62,514
======== ======== ======== ======== ======== =======
</TABLE>
______________________
(1) Includes a small portion of purchased loans prior to 1997.
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<PAGE>
LOAN MATURITIES. The following table presents the contractual maturities
of our loans at December 31, 1998, based on the contractual date of the loan's
final maturity, before giving effect to net items. Demand loans, loans having
no stated schedule of repayments and no stated maturity, and overdrafts are
reported as due in one year or less. The table does not include the effect of
prepayments or scheduled principal amortization. Instead, the entire balance of
each loan outstanding at December 31, 1998 is shown in the appropriate year of
the loan's final maturity.
Amounts Due After December 31, 1998 in
-------------------------------------------------
One Year After One Year After Five
or Less Through Five Years Years Total
------- ------------------ ---------- --------
(In Thousands)
Consumer automobile loans:
Originated loans $ 4,855 $153,662 $ -- $158,517
Purchased loans 6,220 49,449 -- 55,669
One- to four-family
residential loans:
First mortgages 8,602 4,251 3,307 16,160
Second mortgages 2,216 8,688 9,714 20,618
Other consumer loans 4,651 4,905 3,466 13,022
Commercial real estate loans 9,201 3,868 1,413 14,482
Commercial business loans 8,525 2,083 233 10,841
------- -------- ------- --------
Total $44,270 $226,906 $18,133 $289,309
======= ======== ======= ========
- ----------------
(1) Before unearned discount, net purchase discounts, and the allowance for
credit losses.
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<PAGE>
The following table presents the dollar amount of all loans, before net
items, due after one year from December 31, 1998, and whether these loans have
fixed interest rates or floating or adjustable interest rates.
Floating or
Fixed-Rate Adjustable-Rate Total
---------- --------------- -----
(In Thousands)
Consumer automobile loans:
Originated loans $153,591 $ 71 $153,662
Purchased loans 49,449 -- 49,449
One- to four-family
residential loans:
First mortgages 4,684 2,874 7,558
Second mortgages 18,282 120 18,402
Other consumer loans 8,055 316 8,371
Commercial real estate loans 974 4,307 5,281
Commercial business loans 1,419 897 2,316
-------- ------ --------
Total $236,454 $8,585 $245,039
======== ====== ========
ORIGINATED AND PURCHASED AUTOMOBILE LOANS
UNDERWRITING STANDARDS. We originate automobile loans to individuals with
previous credit problems or limited credit histories. Many of our borrowers have
previously filed for bankruptcy, and these "subprime" loans involve a high risk
of default. We also purchase pools of subprime automobile loans, and a small
portion of the loans in the pool may be nonperforming at the time we purchase
them.
We attempt to minimize the risks associated with the loans we originate
through the following requirements with respect to the borrower:
. at least two years of credit history, and preferably a record of making
timely payments on a prior automobile loan;
. at least three years of employment and residence history;
. income that can be readily verified;
. total monthly payments cannot exceed 50% of the borrower's net income
or 42% of gross income;
. no current bankruptcy proceedings pending; and
. no potential "skip hazards," which are borrowers who are likely to
leave the area.
We also impose a number of requirements which are generally applicable to
the loan or the vehicle, including the following:
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. larger downpayments for borrowers with weaker credit or for older
vehicles;
. the vehicle can be no older than seven years preceding the current
model year;
. the maximum term of the loan is 60 months declining down to 18 months
based upon the age of the vehicle;
. the amount of the loan used to finance the purchase of the automobile
is limited to the North American Dealer Association ("NADA") wholesale
value for the most creditworthy applicants, decreasing to 80% to 90% of
the lesser of the wholesale value or invoice for borrowers with mixed
credit and lower limits for those with weak credit;
. the loan payment cannot exceed 25% of the borrower's gross monthly
income; and
. the loan total loan amount before precomputed interest cannot exceed
eight times the borrower's monthly gross income.
We consider ourselves to be an equity lender to borrowers with credit
problems or limited credit histories, as we require borrowers to have an equity
interest in the vehicle being financed through a downpayment, a trade-in or
both. We frequently condition our approval of a subprime loan on the borrower
increasing his downpayment. The amount of the downpayment required is based upon
the loan officer's review of the borrower's credit history and the age and
condition of the vehicle. We believe that the larger downpayments increase the
likelihood of the borrower repaying the loan and help minimize our loss in the
event of a default by the borrower.
For our dealer-originated subprime automobile loans, the amount we lend to
finance the purchase of the automobile generally averages less than 90% of the
wholesale value of the automobile, plus taxes and registration. However, many of
our borrowers finance the purchase of extended warranties or service contracts,
and a small portion of our borrowers also finance the purchase of credit life
insurance. When the cost of these additional items is added to the loan, the
total loan amount is frequently above the wholesale value of the automobile. See
Risk Factors - Relating to CB&T's Business - Our subprime automobile loans that
exceed the wholesale value of the automobile increase the possibility of credit
losses."
The above underwriting requirements are subject to change from time to time
as circumstances warrant. Each loan must be secured by a first priority lien on
the automobile. In addition, each loan requires the borrower to maintain
physical damage insurance covering the financed automobile and naming Crescent
Bank as loss payee. We may, nonetheless, suffer a loss upon theft of or physical
damage to any financed automobile if the borrower fails to maintain insurance as
required by the loan and is unable to pay for repairs to or replacement of the
automobile or is otherwise unable to fulfill his obligations under the loan. We
track the continued maintenance of the borrower's insurance, but we do not
currently force place insurance if the borrower's insurance coverage lapses. We
do, however, currently have lender's comprehensive single interest insurance
coverage, which generally covers losses due to physical damage in excess of a
$2,000 deductible in the event that the borrower's insurance coverage lapses.
Our lender's insurance does not cover skips where we are unable to locate the
automobile.
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<PAGE>
Our loan production officers in Louisiana originate subprime automobile
loans on a direct basis. However, these loans generally account for 10% or less
of our total originated subprime automobile loans.
AGREEMENTS WITH AUTOMOBILE DEALERS. We acquire loans directly from
automobile dealers who have entered into a dealer agreement with us. At June 30,
1999, we had agreements with over 800 dealers that had automobile loans
outstanding with us. Although these agreements do not obligate the dealer to
sell or us to purchase any particular loan, the dealer agreement sets forth the
terms upon which approved loans will be purchased by us. These agreements
contain representations and warranties by the dealer with respect to each loan
to be purchased by us, each automobile that serves as collateral for the loan,
and each loan's compliance with applicable laws and regulations. The dealer
agreements generally provide that the loans are sold to us without recourse to
the dealer, unless the dealer has breached its representations and warranties.
We underwrite all of the loans acquired from automobile dealers. A dealer
agreement can generally be terminated by either party upon 15 to 30 days written
notice to the other party.
The automobile purchaser signs a loan agreement that contains precomputed
interest in the total amount. Our agreements with the dealers provide that the
dealers will receive a percentage of the total finance charges to be earned over
the life of the loan. This dealer premium is generally equal to the difference
between the interest rate charged to the borrower and the interest rate at which
we purchase the loan from the dealer.
The dealer premium is paid to the dealer by Crescent Bank at the time the
loan is purchased, except that many of our dealer agreements provide for a
portion of this premium to be deducted from the dealer payment and deposited
into a dealer reserve account maintained at Crescent Bank. The portion of the
premium that is deducted is higher for non-franchised dealers than for
franchised dealers. The vast majority of our agreements are with manufacturer-
franchised dealers, rather than independent dealers.
We can charge the dealer reserve account for 75% of any loss incurred by us
on the loans from the dealer. In addition, if a loan is prepaid in full, we can
charge the reserve account for the unearned portion of the dealer premium
originally paid by us. The dealer's obligation for charge-backs is limited to
the amount in the dealer's reserve account. Any negative balance in a dealer
reserve account is charged-off by us for financial reporting purposes but is
still maintained for purposes of the dealer agreement. The dealer reserve
accounts are held in noninterest-bearing checking accounts at Crescent Bank. The
reserve accounts with a positive balance aggregated $2.0 million at June 30,
1999, $2.0 million at December 31, 1998 and $2.3 million at December 31, 1997.
The terms of each dealer agreement vary by state. In certain states, the
dealer also receives a percentage of any premiums paid by the borrower for
credit life and credit disability insurance.
APPROVAL OF LOANS FROM DEALERS. When a retail automobile buyer elects to
obtain financing from a dealer, the dealer takes an application for submission
to its financing sources. Typically, a dealer will submit the buyer's credit
application to more than one financing source for review. We believe that a
dealer's decision to finance the automobile purchase with us, rather than with
other financing sources, is based upon our relationship with the dealer, the
dealer's analysis of the discounted purchase price offered by us for the loan,
any incentives offered to the dealer, the timeliness, consistency and
50
<PAGE>
predictability of our response, and our ability to fund loan purchases typically
within one business day of receipt of all required documentation.
Upon receipt of a credit application from a dealer, we order a credit
report on the borrower from one or more of the three major national credit
bureaus. We then review the borrower's credit history and verify the borrower's
employment, income, residence and automobile insurance. If a loan officer
determines that the credit application meets our underwriting criteria subject
to further information or with modifications to the originally proposed loan
term, we may request and review further information and supporting documentation
before we decide to purchase a loan. We also call the borrower before funding
the loan. When presented with a credit application, we typically notify the
dealer within one business day whether or not we intend to purchase the loan.
The interest rate at which we acquire the loan from the dealer varies
depending upon the age of the vehicle, whether the dealer has an agreement
providing for a reserve account with us, and the state in which the dealer is
located. Our interest rates increase as the age of the vehicle increases, and
the rate at which we acquire the loan is higher if the dealer does not have a
reserve account with us. The rates at which we acquire the loan from the dealer
are lower than the maximum rates that can be charged to the borrower in that
state. However, the rate paid by the borrower may be at or near the maximum
permissible rate so that the dealer earns a premium. Typically, once an
application is approved or, if approved conditionally, upon fulfillment and
receipt of required stipulations, including financing documents, the dealer
assigns the loan to us, we purchase the loan and the dealer records our lien on
the vehicle. We then commence servicing the loan.
RETAIL INSTALLMENT CONTRACTS. Depending upon the laws of each state, the
retail installment contract executed by the borrower permits the borrower to
elect to finance the purchase of credit life and credit disability insurance, as
well as service contracts or extended warranties. If the loan is prepaid in full
prior to maturity, the agreements also provide for a refund of the unpaid
finance charges (or unearned discounts) computed under the Rule of 78's in
Georgia, Kentucky and Mississippi and 90% of the unpaid finance charges computed
under the Rule of 78's in Louisiana and Tennessee. The agreements also set forth
the amount of late fees we can charge and, if a default occurs on the loan, the
borrower's obligation to pay our collection costs and attorney's fees, subject
to limitations imposed by each state.
The Rule of 78's is a mathematical or "sum-of-the-digits" formula for
determining the amount of interest paid each month on the loan. The total
interest to be paid over the life of the loan is added to the principal balance,
is included in the total loan amount as a finance charge, and is accounted for
as an unearned discount until paid by the borrower. Under this method, the
amount of interest paid in the early months of the loan exceeds the amount of
interest that would be paid under the simple interest method. We account for our
dealer-originated and direct-originated automobile loans under the Rule of 78's,
while our purchased automobile loans are accounted for under the simple interest
method. When a Rule of 78's precomputed interest loan is prepaid by the borrower
prior to maturity, the borrower in effect pays interest at an annual rate higher
than he would have if he held the loan to maturity, particularly if the borrower
only receives as a refund 90% of the unpaid finance charges. If a simple
interest loan is prepaid prior to maturity, the borrower only pays interest to
the date of prepayment and the effective annual rate of interest paid by the
borrower is no different than if the loan had been held to maturity.
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<PAGE>
APPROVAL AND FUNDING STATISTICS. During the first six months of 1999, we
reviewed 41,912 applications, of which 9.8% were funded. During 1998, we
reviewed 77,190 applications, of which 9.4% were funded. We conditionally
approve applications in addition to those we actually fund where the underlying
credit of the customer is generally acceptable to us but with respect to which
we require a modification of terms (typically monthly payment levels or amount
of downpayment) prior to final credit approval. Frequently, the applicant is
either unable or unwilling to pay the additional downpayment that we require.
NEW VS. USED AUTOMOBILE LOANS. We prefer to finance used automobiles
because of the significant depreciation on new automobiles relative to used
automobiles, which has a disproportionately negative impact on recoveries if a
new automobile is repossessed, and because we are permitted to charge higher
interest rates under applicable state laws on used automobile loans. In
addition, we are not as competitive on new automobiles, because we subtract from
the purchase price any dealer rebates when we determine the amount that we will
lend. The following table shows information regarding our new and used car
loans, both originated and purchased, at the dates indicated, before unearned
discounts and net purchase discounts.
<TABLE>
<CAPTION>
June 30, 1999 December 31, 1998
--------------------------------- -----------------------------------
% of Total % of Total
Number Principal Principal Number Principal Principal
of Loans Balance Balance of Loans Balance Balance
-------- --------- ---------- -------- --------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
New vehicles 3,518 $ 45,423 22.4% 3,593 $ 47,964 22.4%
Used vehicles 21,035 157,479 77.6 22,095 166,222 77.6
------ -------- ----- ------ -------- -----
Total 24,553 $202,902 100.0% 25,688 $214,186 100.0%
====== ======== ===== ====== ======== =====
</TABLE>
PURCHASES OF AUTOMOBILE AND OTHER LOANS. To enhance our growth and as a
natural extension of our business, we purchase from time to time pools of
subprime automobile loans and, to a lesser extent, other types of loans. These
purchases from third parties enable us to acquire loans at a lower cost than
comparable quality dealer-originated loans due to decreased origination expense.
In many cases, the purchased loans have payment histories of six months or
longer, which reduces our exposure to early loan defaults.
When we consider pools of subprime automobile loans for possible purchase,
as well as other types of loan pools, we review collateral values, the loan-to-
value ratios, the age of the loans, payment histories and other factors deemed
appropriate. We review 100% of the loans that have a history of delinquencies,
extensions or other problems and a sampling of the remaining loans in the pool.
Our bid prices generally reflect our analysis of the credit quality of the pool
and the yield on the pool. We value each prospective loan portfolio based on a
pricing model, which estimates the value of the loans in the portfolio based on
certain assumptions. We normally acquire portfolios at a net discount,
particularly if there are non-performing loans in the pool, although in some
cases we have paid a premium for the loans because of the high yield of the
portfolio. The effect of the premium is to reduce our yield on the loan pool
below the average coupon rate on the loans in the pool, as the premiums are
amortized as a reduction to interest income over the life of the loan. We
generally service the loans that we purchase.
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<PAGE>
We purchased subprime automobile loans totaling $5.5 million in the first
half of 1999, $46.5 million in 1998 and $39.2 million in 1997, in each case
before net purchase discounts. At June 30, 1999, total purchased automobile
loans amounted to $39.8 million, before $8.2 million of net purchase discounts.
All of the loans we purchased in the first half of 1999 consisted of subprime
automobile loans. We purchased $27.2 million of non-automobile loans in 1998 and
$12.0 million in 1997, before net purchase discounts.
Our net purchase discounts amounted to $17.4 million at June 30, 1999. If
we determine that the discount on a particular loan pool is larger than the
anticipated losses on the loans in that pool, then the excess discount is
recognized into income. In addition, when purchased loans are prepaid prior to
maturity, the related discounts and premiums are accreted or amortized into
interest income on loans.
The following table shows the activity in the net purchase discounts and
premiums on all of our purchased loans for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
------------------ -----------------------------
1999 1998 1998 1997 1996
------- ------- ------- ------- -------
(In Thousands)
<S> <C> <C> <C> <C> <C>
Discounts:
Balance at beginning of period $24,976 $15,765 $15,765 $ 5,694 $ 7,767
Discounts on loans purchased
during the period 1,761 691 14,203 11,292 1,340
Discounts recognized into income (912) (286) (747) (720) (984)
Charge-offs against the discounts (6,071) (1,634) (4,245) (501) (2,429)
------- ------- ------- ------- -------
Balance at end of period 19,754 14,536 24,976 15,765 5,694
------- ------- ------- ------- -------
Premiums:
Balance at beginning of period (3,376) (1,083) (1,083) -- --
Premium on loans purchased -- (163) (4,039) (1,216) --
Premium amortization 982 662 1,746 133 --
------- ------- ------- ------- -------
Balance at end of period (2,394) (584) (3,376) (1,083) --
------- ------- ------- ------- -------
Discounts net of premiums at
end of period $17,360 $13,952 $21,600 $14,682 $ 5,694
======= ======= ======= ======= =======
</TABLE>
Our purchases of subprime automobile loans enable us to increase the
geographic diversity of our automobile portfolio, which helps to reduce the
risks associated with this portfolio. The following table shows the geographic
distribution of our consumer automobile loans, both originated and purchased, as
of the dates indicated.
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At June 30, 1999
--------------------
# of Principal
Loans Balance(1)
------ ----------
(Dollars in Thousands)
Consumer automobile loans:
New Orleans metropolitan area 5,033 $ 50,398
Rest of Louisiana 6,585 60,405
------ ----------
Total Louisiana 11,618 110,803
Mississippi 3,232 30,449
Tennessee 1,630 15,045
Texas 988 7,791
Georgia 757 6,689
California 559 3,203
Virginia 887 3,086
Massachusetts 529 2,842
Kentucky 222 2,627
New York 410 2,547
Connecticut 475 2,389
Florida 331 1,860
North Carolina 367 1,761
Arkansas 155 1,224
New Hampshire 225 1,119
------ --------
Subtotal 22,385 193,435
Other states 2,168 9,467
------ --------
Total 24,553 $202,902
====== ========
_______________________
(1) Before unearned discount, net purchase discounts, and the allowance for
credit losses.
ONE- TO FOUR-FAMILY RESIDENTIAL LOANS
We have focused our one-to four-family residential lending efforts
primarily on the origination of loans secured by first mortgages on owner
occupied residences. In 1998, we began originating and purchasing one- to four-
family residential loans secured by second mortgages. Of the $20.6 million of
second mortgages at December 31, 1998, $20.4 million represented purchased
loans.
The one- to four-family residential loans we originate for our portfolio
have a maximum term of 15 years, with an amortization schedule not to exceed 30
years. The amount of the loan is generally limited to a maximum of 80% of the
appraised value or purchase price, whichever is less. We require appraisals for
all loans in excess of $250,000. For loans between $100,000 and $250,000, an
appropriate evaluation of the value of the property by a third party independent
of the transaction is required. Broker's opinions are acceptable for loans of
$100,000 or less.
Of our $17.3 million of first mortgages at June 30, 1999, $8.8 million or
51.5% have interest rates that float based upon a specified prime rate. These
are primarily short-term bridge loans until the borrower secures more permanent
financing or sells the property. Because these loans have a short term
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<PAGE>
to maturity, there is an added risk if the borrower is unable to refinance the
loan or sell the property. Another $6.5 million or 37.6% of our first mortgages
at June 30, 1999 have fixed interest rates, and the remaining first mortgages
have adjustable interest rates based upon various indexes. Over 95% of our
second mortgages at June 30, 1999 have fixed interest rates. Our fixed-rate
first and second mortgages have average principal balances below $12,000 at June
30, 1999, while our adjustable-rate mortgages have substantially higher average
balances.
OTHER CONSUMER LOANS
At June 30, 1999, other consumer loans amounted to $11.1 million or 4.0% of
the total loan portfolio. The other consumer loans at June 30, 1999 consisted
primarily of $2.8 million of unsecured loans, $1.7 million of loans secured by
certificates of deposit, stocks and bonds, and $6.6 million of other
miscellaneous types of loans.
Unsecured loans are made to individuals with strong credit history and
financial condition. These loans have a maximum term of three years and are
generally on an installment basis.
Loans secured by certificates of deposit are generally limited to $100,000
or the amount of the certificate, whichever is less. The term of the loan
cannot exceed the maturity rate of the certificate of deposit, and the interest
rate on the loan must be at least 2% above the rate on the certificate.
COMMERCIAL REAL ESTATE LOANS
Our commercial real estate loans amounted to $16.4 million or 6.0% of our
total loan portfolio at June 30, 1999. At that date, $4.0 million or 24.4% of
the commercial real estate loans were secured by multi-family residential
properties and the remaining were secured by various other types of commercial
property.
Our commercial real estate loans have a maximum term of 15 years if the
loan has an adjustable interest rate and the borrower has a strong financial
condition. The loans generally have short to medium term maturities of up to
five years. These loans are generally limited to 75% of the appraised value or
purchase price, whichever is less. The properties securing these loans are
generally located within our market area, except for some purchased loans which
are secured by property outside of Louisiana.
Of the $4.0 million of multi-family residential loans at June 30, 1999,
$2.4 million or 59.2% had interest rates that float based upon a specified prime
rate and the remaining amount had fixed interest rates. Of the $12.4 million of
other commercial real estate loans at June 30, 1999, $10.0 million or 80.6% had
interest rates that float based upon a specified prime rate and the remaining
amount had fixed interest rates.
We recognize that commercial real estate loans generally involve a higher
degree of risk than one- to four-family residential real estate loans. These
loans typically involve larger loan balances to single borrowers or groups of
related borrowers for rental or business properties. In addition, the payment
experience on these loans typically depends upon the successful operation of the
related real estate project and is subject to risks such as excessive vacancy
rates or inadequate rental income levels. We attempt to mitigate these risks by
originating these loans primarily in our market area and using conservative
loan-to-value ratios in the underwriting process.
55
<PAGE>
COMMERCIAL BUSINESS LOANS
At June 30, 1999, we had $10.4 million of commercial business loans. Our
business lending activities encompass loans with a variety of purposes and
security. At June 30, 1999, our commercial business loans primarily included
$3.2 million secured by assignments of accounts receivable, $2.6 million secured
by equipment and inventory, and $2.2 million of unsecured loans for working
capital purposes. We generally do not lend more than 80% of the value of
eligible accounts receivable and inventory or more than 60% of the value of
equipment. Our commercial business loans at June 30, 1999 also included $679,000
secured by certificates of deposit, $601,000 secured by stocks and bonds,
$564,000 of endorsed or guaranty loans, $206,000 secured by automobiles used for
business purposes, and $432,000 secured by miscellaneous collateral.
Generally, our commercial business loans have been limited to borrowers
headquartered, or doing business in, our retail market area. At June 30, 1999,
over 80% of these loans have adjustable interest rates at some margin over a
specified prime interest rate. The loans have short to medium term maturities
of up to five years, and we generally have the right to demand repayment prior
to the scheduled maturity of the loan.
Commercial business loans involve greater risk than residential mortgage
loans. Residential mortgage loans generally are made on the basis of the
borrower's ability to make repayment from his or her employment and other income
and are secured by real property whose value is more easily ascertainable.
Commercial business loans typically are made on the basis of the borrower's
ability to make repayment from the cash flow of the borrower's business. As a
result, the availability of funds for the repayment of commercial business loans
may substantially depend upon the success of the business itself. In addition,
the collateral securing the loans may depreciate over time, may be difficult to
appraise, and may fluctuate in value based on the success of the business. We
work to reduce this risk by carefully underwriting these loans.
SECONDARY MARKET ACTIVITIES
In addition to originating loans for our own portfolio, we engage in
secondary mortgage market activities by originating residential real estate
loans for sale into the secondary market. These sales allow us to make loans to
customers who prefer long-term, fixed-rate loans which we choose not to hold in
our own portfolio. Our mortgage banking operations consist of originating and
selling one- to four-family residential mortgage loans.
The secondary market for mortgage loans is comprised of institutional
investors who purchase loans meeting certain underwriting specifications with
respect to loan-to-value ratios, maturities and yields. Subject to market
conditions, we tailor our real estate loan programs to meet the specifications
of FreddieMac and FannieMae, two of the largest institutional investors. The
loans are sold without recourse to us, except we may be required to repurchase
the loan if any of our representations and warranties regarding the loan are not
accurate.
When we originate a loan for sale into the secondary market, we do not
approve the loan until we have received a written commitment from a third party
to purchase the loan when it is originated. We sell the loans on a servicing
released basis, and the sale of the servicing rights results in a gain when the
loan is sold. We substantially increased our mortgage banking activities in
1998, as the amount of loans
56
<PAGE>
originated for sale more than tripled from $9.0 million in 1997 to $30.6 million
in 1998. The sales also substantially increased to $32.2 million in 1998 from
$6.8 million in 1997. The amount of loans originated for sale decreased to $9.7
million in the first half of 1999, and the amount of loans sold in the 1999
period decreased to $11.1 million. At June 30, 1999, mortgage loans held for
sale amounted to $453,000.
ASSET QUALITY
GENERAL. Our collection activities begin if a borrower fails to make a
required payment within 10 days of the due date. We use an automated system of
monitoring delinquencies, and a past due notice is sent when the payment is more
than 10 days past due. Late charges are generally imposed following the 10th
day after a payment is due. If a payment becomes 15 days past due, a loan
collector begins contacting the borrower by telephone, letter or in person. Our
loan collectors are assigned to specific delinquent accounts and generally
remain assigned to those accounts for the life of the loan. If the delinquency
continues, a certified letter is generally sent to the borrower formally
requesting payment. When a loan becomes 30 days delinquent, we begin the process
of repossessing the automobile if there has been no communication with the
borrower or if there is no payment plan in place.
State law governs the repossession of the automobile. Some jurisdictions
provide the consumer with reinstatement or redemption rights. Legal
requirements, particularly in the event of bankruptcy, may restrict our ability
to dispose of the repossessed vehicle. In Louisiana, if the borrower does not
consent to the repossession, then we use the sheriff's office to make the
repossession. In order to obtain the borrower's consent, a release will
frequently be signed, in which case no further collections activity occurs after
the automobile is repossessed. If the borrower does not consent, we may attempt
to collect from the borrower any balance still owed after the repossessed
automobile is sold, depending upon the amount owed and the borrower's financial
condition. Repossessions in states where we do not have an office are handled by
independent repossession firms engaged by us and must be approved by a
collections officer.
We may encounter delays in repossessing the automobile if we are unable to
locate the automobile or if we need to use the sheriff's office or an
independent firm. Our collection activities continue during this period. If we
repossess the automobile with the borrower's consent, we then sell the
repossessed automobile at auction. If the sheriff's office repossesses the
automobile, the sheriff's office will publish a notice of public sale, and we
may purchase the automobile at the sale and then sell it at auction. The
borrower can repay his loan and reclaim possession of the automobile up until
the day of the sheriff's sale. We credit the proceeds from the sale of the
automobile at auction, and any other recoveries, against the balance of the
loan. Auction proceeds from the sale of the repossessed vehicle and other
recoveries are usually not sufficient to cover the outstanding balance of the
loan, and the resulting deficiency is charged-off.
Loans are placed on non-accrual status when management believes the
probability of collection of interest is insufficient to warrant further
accrual. When a loan is placed on non-accrual status, previously accrued but
unpaid interest is deducted from interest income. As a matter of policy, we
discontinue the accrual of interest income when the loan becomes 90 days past
due as to principal or interest, unless the loan is both well secured with
readily marketable collateral and in the process of collection. When an
automobile loan becomes 90 days past due or when the borrower files for
bankruptcy, we write the loan down to 80% of the NADA wholesale value. Loans
that become 120 days past due are generally charged-off, except for automobile
loans involving a Chapter 13 bankruptcy. When the bankruptcy plan is confirmed,
the loan is accounted for in accordance with the court ordered terms, with any
deficiency balance being charged-off at that time.
57
<PAGE>
DELINQUENT LOANS. The following table presents information concerning our
accruing loans that are delinquent between 30 and 89 days at the dates indicated
in dollar amount and as a percentage of our total loan portfolio, net of
unearned discounts and net purchase discounts. The dollar amounts shown equal
the total outstanding principal balances of the related loans, net of unearned
discounts and net purchase discounts, rather than the actual payment amounts
which are past due.
<TABLE>
<CAPTION>
At June 30, At December 31,
-----------------------------------------------
1999 1998 1997 1996
------------- ------------- ------------- -------------
Amount % Amount % Amount % Amount %
------ ---- ------ ---- ------ ---- ------ ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Installment loans $3,843 1.70% $8,339 3.50% $8,624 4.38% $4,430 3.05%
Real estate loans 831 0.37 301 0.13 490 0.25 709 0.49
Commercial and all other
loans 112 0.05 947 0.40 42 0.02 669 0.46
------ ---- ------ ---- ------ ---- ------ ----
Total accruing loans
delinquent between 30
and 89 days $4,786 2.11% $9,587 4.02% $9,156 4.65% $5,808 3.99%
====== ==== ====== ==== ====== ==== ====== ====
</TABLE>
The increased delinquencies in installment loans in 1997 and 1998 were
primarily due to loan purchases in December 1997 and December 1998. When we
purchased these loans, we encountered delays in having the loan payments made to
us instead of to the seller of the loans and in receiving the payments made to
the seller after the date we purchased the loans. As a result, the delinquencies
at December 31, 1998 and 1997 are higher than they otherwise would have been.
NON-PERFORMING ASSETS. The following table shows our non-performing assets
at the dates indicated.
<TABLE>
<CAPTION>
At June 30, At December 31,
------------------------------------
1999 1998 1997 1996 1995 1994
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Non-accruing loans (1):
Installment loans (2) $1,699 $2,894 $2,122 $2,381 $ 372 $ 406
Real estate loans 862 925 396 720 1,487 822
Commercial and all other loans -- -- 470 35 18 50
------ ------ ------ ------ ------ ------
Total non-accruing loans 2,561 3,819 2,988 3,136 1,877 1,278
------ ------ ------ ------ ------ ------
Accruing loans 90 days or more
past due (1):
Installment loans 1,045 1,941 223 138 534 49
Real estate loans 547 260 741 290 261 239
Commercial and all other loans 90 639 432 349 64 52
------ ------ ------ ------ ------ ------
Total accruing loans 90 days
or more past due 1,682 2,840 1,396 777 859 340
------ ------ ------ ------ ------ ------
Total non-performing assets (3) $4,243 $6,659 $4,384 $3,913 $2,736 $1,618
====== ====== ====== ====== ====== ======
Restructured loans included above:
Non-accruing loans $ 157 $ 355 $ 135 $ 122 $ 98 $ 7
Accruing loans 90 days or more past due 296 304 134 33 21 6
------ ------ ------ ------ ------ ------
Total restructured loans $ 453 $ 659 $ 269 $ 155 $ 119 $ 13
====== ====== ====== ====== ====== ======
Non-performing loans to total loans (1) 1.87% 2.79% 2.23% 2.69% 2.60% 2.54%
====== ====== ====== ====== ====== ======
Non-performing assets to total assets 1.54% 2.36% 1.79% 2.27% 2.13% 1.92%
====== ====== ====== ====== ====== ======
</TABLE>
(Footnotes on next page)
58
<PAGE>
________________
(1) Net of unearned discounts and net purchase discounts, but before the
allowance for credit losses.
(2) Includes repossessed assets in the process of being sold at auction.
(3) Excludes real estate owned, which amounted to $15,000 at June 30, 1999.
The $1.7 million of non-accruing installment loans and the $1.0 million of
accruing installment loans 90 days or more past due at June 30, 1999 consisted
primarily of subprime automobile loans, net of unearned discounts and net
purchase discounts.
The $862,000 of non-accruing real estate loans at June 30, 1999 consisted
of multi-family loans totalling $752,000 and one- to four-family residential
loans totalling $110,000.
If the $2.6 million of non-accruing loans at June 30, 1999 had been current
in accordance with their terms during the six months ended June 30, 1999, the
gross interest income on such loans would have been approximately $198,000. A
total of $110,000 of interest income on these non-accruing loans was actually
recorded in the first half of 1999.
CLASSIFIED ASSETS. Federal regulations require that each insured
institution classify its assets on a regular basis. In addition, in connection
with examinations of insured institutions, federal examiners have authority to
identify problem assets and, if appropriate, classify them. There are three
classifications for problem assets: "substandard," "doubtful" and "loss."
Substandard assets have one or more defined weaknesses and are characterized by
the distinct possibility that the insured institution will sustain some loss if
the deficiencies are not corrected. Doubtful assets have the weaknesses of
substandard assets with the additional characteristic that the weaknesses make
collection or liquidation in full on the basis of currently existing facts,
conditions and values questionable, and there is a higher possibility of loss.
An asset classified loss is considered uncollectible and of such little value
that continuance as an asset of the institution is not warranted. Assets
classified as substandard or doubtful require the institution to establish
general allowances for credit losses. If an asset or portion thereof is
classified loss, the insured institution must either establish specific
allowances for credit losses in the amount of 100% of the portion of the asset
classified loss, or charge-off such amount. General loss allowances established
to cover possible losses related to assets classified substandard or doubtful
may be included in determining an institution's regulatory capital, while
specific valuation allowances for credit losses do not qualify as regulatory
capital. Federal examiners may disagree with an insured institution's
classifications and amounts reserved.
We use an outside consulting firm to assist us in the review and monitoring
of our loan portfolio. The firm reviews annually all loans of $100,000 or more,
all loans of $50,000 or more on our watch list or delinquent over 60 days, and a
sampling of recently originated and purchased loans. The firm also performs
loan reviews semi-annually.
Our total classified assets at June 30, 1999 (excluding loss assets
specifically reserved for) amounted to $4.4 million, net of unearned discounts
and net purchase discounts. Of this amount, $4.2
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<PAGE>
million was included as non-performing assets in the preceding table. Of the
remaining amount, $144,000 was classified as substandard and $40,000 as
doubtful.
ALLOWANCE FOR CREDIT LOSSES. At June 30, 1999, our allowance for credit
losses amounted to $5.4 million or 2.22% of our total loan portfolio, net of
unearned discounts. Our loan portfolio consists primarily of subprime
automobile loans and, to a lesser extent, one- to four-family residential loans,
commercial real estate loans, commercial business loans and other consumer
loans. The allowance for credit losses is maintained by management at a level
considered adequate to cover estimated losses inherent in the existing portfolio
based on prior loan loss experience, known and probable risks in the portfolio,
adverse situations that may affect the borrower's ability to repay, the
estimated value of any underlying collateral, current economic conditions, and
other factors and estimates which are subject to change over time. We also use
a static pool analysis to forecast losses on our subprime automobile loans. For
a discussion of our allowance and our provisions for credit losses, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." While management believes that it determines the size of the
allowance based on the best information available at the time, the allowance
will need to be adjusted as circumstances change and assumptions are updated.
Future adjustments to the allowance could significantly affect our net earnings.
The following table shows changes in our allowance for credit losses during
the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
-------------------- --------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Total loans outstanding at end
of period(1) $244,052 $218,481 $259,802 $211,555 $151,046 $113,029 $71,234
======== ======== ======== ======== ======== ======== =======
Average loans outstanding(1) $250,109 $219,183 $221,616 $168,014 $129,385 $ 92,182 $60,666
======== ======== ======== ======== ======== ======== =======
Balance at beginning of period $ 4,484 $ 5,097 $ 5,097 $ 3,737 $ 2,141 $ 1,133 $ 773
-------- -------- -------- -------- -------- -------- -------
Charge-offs:
Consumer automobile loans 2,683 2,528 6,205 3,644 1,410 550 149
Real estate loans -- -- -- -- 10 -- --
Commercial and all other loans -- -- -- 72 14 177 19
-------- -------- -------- -------- -------- -------- -------
Total charge-offs(2) 2,683 2,528 6,205 3,716 1,434 727 168
-------- -------- -------- -------- -------- -------- -------
Recoveries:
Consumer automobile loans 315 101 256 186 82 46 19
Real estate loans -- -- -- -- 5 -- --
Commercial and all other loans -- -- -- 7 10 22 1
-------- -------- -------- -------- -------- -------- -------
Total recoveries 315 101 256 193 97 68 20
-------- -------- -------- -------- -------- -------- -------
Net charge-offs 2,368 2,427 5,949 3,523 1,337 659 148
-------- -------- -------- -------- -------- -------- -------
Provision for credit losses 3,291 2,565 5,336 4,883 2,933 1,667 508
-------- -------- -------- -------- -------- -------- -------
Balance at end of period $ 5,407 $ 5,235 $ 4,484 $ 5,097 $ 3,737 $ 2,141 $ 1,133
======== ======== ======== ======== ======== ======== =======
Allowance for credit losses to
total loans outstanding(1) 2.22% 2.40% 1.73% 2.41% 2.47% 1.89% 1.59%
======== ======== ======== ======== ======== ======== =======
Net charge-offs to average
loans(1) 1.89% 2.21% 2.68% 2.10% 1.03% 0.71% 0.24%
======== ======== ======== ======== ======== ======== =======
</TABLE>
__________________
(1) Loans are calculated net of unearned discounts and before net purchase
discounts and the allowance for credit losses.
(2) Excludes charge-offs on purchased loans applied toward the net purchase
discounts.
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<PAGE>
Our charge-offs and recoveries in recent years have primarily related to
our subprime automobile loans. The dollar amount of the net charge-offs has
increased in each period, and the amount of the net charge-offs as a percent of
average loans increased each year from 1994 to 1998. The net charge-off ratio
decreased slightly in the first half of 1999.
In determining the adequacy of our allowance for credit losses, we also
consider our dealer reserves on dealer originated automobile loans and our net
purchase discounts on purchased loans. Our dealer reserve accounts with a
positive balance aggregated $2.0 million at June 30, 1999, $2.0 million at
December 31, 1998 and $2.3 million at December 31, 1997. We can charge these
accounts for 75% of any loss incurred by us on the loans from the dealer. Any
losses incurred on purchased loans are first charged-off against the net
purchase discounts for the applicable pool of loans. These net discounts
aggregated $17.4 million at June 30, 1999, $21.6 million at December 31, 1998
and $14.7 million at December 31, 1997. None of our allowance for credit losses
is allocated to purchased loans, as the net purchase discounts generally have
been sufficient to cover losses incurred on those loans.
At June 30, 1999, our allowance for credit losses and our dealer reserve
accounts aggregated $7.4 million, or 4.0% of our loan portfolio of $186.9
million at that date, excluding purchased automobile loans, unearned discounts
and net purchase discounts.
61
<PAGE>
The following table shows how our allowance for credit losses is allocated
by loan category at each of the dates indicated.
<TABLE>
<CAPTION>
At June 30,
1999
---------------------
Loan
Category
Amount as a %
of of Total
Allowance Loans
--------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Consumer automobile loans:
Originated loans $5,061 59.4%
Purchased loans -- 14.5
One- to four-family
residential loans:
First mortgages 35 6.3
Second mortgages -- 6.0
Other consumer loans 111 4.0
Commercial real estate loans 83 6.0
Commercial business loans 117 3.8
------ -----
Total allowance for
credit losses $5,407 100.0%
====== =====
At December 31,
---------------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
-------------------- ------------------- ------------------- ------------------- ------------------
Loan Loan Loan Loan Loan
Category Category Category Category Category
Amount as a % Amount as a % Amount as a % Amount as a % Amount as a %
of of Total of of Total of of Total of of Total of of Total
Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans
--------- -------- --------- -------- --------- -------- --------- -------- --------- --------
(Dollars in Thousands)
Consumer automobile loans:
Originated loans $4,119 54.8% $4,740 63.9% $3,436 76.7% $1,853 71.3% $ 938 68.2%
Purchased loans -- 19.2 -- 14.8 -- -- -- -- -- --
One- to four-family
residential loans:
First mortgages 40 5.6 154 10.5 100 8.0 91 9.8 75 13.1
Second mortgages -- 7.1 -- -- -- -- -- -- -- --
Other consumer loans 130 4.5 3 0.1 4 0.2 3 0.2 2 0.2
Commercial real estate loans 67 5.0 57 5.6 73 8.1 54 8.1 34 8.3
Commercial business loans 128 3.8 143 5.1 124 7.0 140 10.6 84 10.2
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Total allowance for
credit losses $4,484 100.0% $5,097 100.0% $3,737 100.0% $2,141 100.0% $1,133 100.0%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
</TABLE>
62
<PAGE>
INVESTMENT SECURITIES
Crescent Bank maintains an investment portfolio consisting of federal funds
sold, U.S. government and agency securities, government-sponsored agency
mortgage-backed securities and, to a lesser extent, municipal bonds and FHLB
stock. Federal funds sold and FHLB stock have fair values that approximate
their carrying amounts. The other investment securities are accounted for as
available for sale. See Notes A and B of Notes to Consolidated Financial
Statements.
Federal funds sold are money market instruments with generally overnight
maturities. Crescent Bank uses federal funds sold to invest its normal cash
flow from deposit-taking and lending operations and to help satisfy both
internal liquidity needs and regulatory liquidity requirements. Federal funds
sold also improve the interest rate sensitivity of Crescent Bank's assets, as
all of these funds mature in 90 days or less. Federal funds sold have
significantly increased from $7.4 million or 4.3% of total assets at December
31, 1996 to $29.0 million or 10.5% of total assets at June 30, 1999.
Securities available for sale have longer maturities and higher yields than
federal funds sold. At June 30, 1999, U.S. government securities amounted to
$10.8 million or 57.9% of total available for sale securities. Crescent Bank
purchased $9.8 million of U.S. government securities in the first half of 1999.
Mortgage-backed securities amounted to $5.2 million or 27.9% of this portfolio
at June 30, 1999. Mortgage-backed securities and municipal bonds have declined
since December 31, 1997.
The following table presents information regarding our available for sale
securities at the dates indicated.
<TABLE>
<CAPTION> At December 31,
At June 30, -------------------------------------------------------------
1999 1998 1997 1996
----------------- ----------------- ----------------- -----------------
Amortized Fair Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value Cost Value
------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(In Thousands)
U.S. government
securities $10,881 $10,809 $ 2,498 $ 2,532 $ 4,196 $ 4,227 $ 2,925 $ 2,956
U.S. government
agency securities 91 91 2,127 2,129 3,943 3,956 2,255 2,267
Mortgage-backed
securities 5,219 5,215 8,392 8,489 14,867 14,935 10,319 10,263
Municipal bonds 2,528 2,546 2,675 2,740 2,687 2,720 2,062 2,054
------- ------- ------- ------- ------- ------- ------- -------
Total $18,719 $18,661 $15,692 $15,890 $25,693 $25,838 $17,561 $17,540
======= ======= ======= ======= ======= ======= ======= =======
</TABLE>
63
<PAGE>
The following table shows the amount of our available for sale securities
which mature during each of the periods indicated and the weighted average
yields for each range of maturities at June 30, 1999. None of our securities
mature after 10 years.
<TABLE>
<CAPTION>
At June 30, 1999
---------------------------------------------------------------------
Over One After Five
Weighted Year Weighted Years Weighted
One Year Average Through Average Through Average
or Less Yield Five Years Yield Ten Years Yield
------- -------- ---------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
U.S. government securities $5,884 4.76% $ 4,998 4.66% $ -- --%
U.S. government agency securities -- -- 91 8.61 -- --
Mortgage-backed securities 1,480 6.01 3,739 6.41 -- --
Municipal bonds 100 4.20 1,734 4.49 693 4.48
------ ------- ------
Total $7,464 5.00 $10,562 5.28 $ 693 4.48
====== ======= ======
</TABLE>
At June 30, 1999, the following investments exceeded 10% of our total
shareholders' equity.
Amortized Cost Fair Value
-------------- ----------
(In Thousands)
Mortgage-backed security issuer:
Freddie Mac $2,931 $2,939
Fannie Mae 2,288 2,276
------ ------
Total $5,219 $5,215
====== ======
Mortgage-backed securities represent a participation interest in a pool of
one- to four-family or multi-family mortgages. The mortgage originators use
intermediaries (generally U.S. government agencies and government-sponsored
enterprises) to pool and repackage the participation interests in the form of
securities, with investors such as Crescent Bank receiving the principal and
interest payments on the mortgages.
Freddie Mac, which is a corporation chartered by the U.S. government,
issues participation certificates backed principally by conventional mortgage
loans. Freddie Mac guarantees the timely payment of interest and the ultimate
return of principal on participation certificates. Fannie Mae is a private
corporation chartered by the U.S. Congress with a mandate to establish a
secondary market for mortgage loans. Fannie Mae guarantees the timely payment of
principal and interest on Fannie Mae securities. Because Freddie Mac and Fannie
Mae were established to provide support for low- and middle-income housing,
there are limits on the maximum size of loans that qualify for these programs.
For example, Freddie Mac and Fannie Mae currently limit their loans secured by a
single-family, owner-occupied residence to $240,000.
Mortgage-backed securities generally yield less than the loans which
underlie such securities because their payment guarantees or credit enhancements
result in nominal credit risk. In addition, mortgage-backed securities are more
liquid than individual mortgage loans and may be used to collateralize
borrowings or other obligations of Crescent Bank.
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<PAGE>
SOURCES OF FUNDS
GENERAL. Deposits are the primary source of Crescent Bank's funds for
lending and other investment purposes. In addition to deposits, Crescent Bank
derives funds primarily from principal and interest payments on loans and
investment securities. Loan repayments are a relatively stable source of funds,
while deposit inflows and outflows are significantly influenced by general
interest rates and money market conditions. Borrowings may be used on a short-
term basis to compensate for reductions in the availability of funds from other
sources and have been used on a longer-term basis to fund loan purchases and
capital infusions to Crescent Bank.
DEPOSITS. Crescent Bank's deposits are attracted principally from the New
Orleans metropolitan area, except that Crescent Bank uses the internet to post
rates for its certificates of deposit in order to fund loan purchases from time
to time. Crescent Bank's depositors are comprised largely of individuals and
other financial institutions. Deposit account terms vary, with the principal
differences being the minimum balance required, the time periods the funds must
remain on deposit and the interest rate.
Interest rates paid, maturity terms, service fees and withdrawal penalties
are established by Crescent Bank on a periodic basis. Management determines the
rates and terms based on rates paid by competitors, Crescent Bank's needs for
funds or liquidity, growth goals and federal and state regulations. Crescent
Bank attempts to control the flow of deposits by pricing its accounts to remain
generally competitive with other financial institutions in the New Orleans
metropolitan area. Crescent Bank actively competes with other institutions on a
rate basis, and it has frequently taken a position of price leadership in the
New Orleans metropolitan area.
At June 30, 1999, certificates of deposit amounted to $227.1 million or
92.4% of total deposits. Approximately $43.8 million or 17.8% of total deposits
at June 30, 1999 were certificates of deposits with balances of $100,000 or
more. At June 30, 1999, approximately $31.3 million or 12.7% of total deposits
were from individuals or entities outside the State of Louisiana, most of which
were obtained from posting rates on the internet. In addition, we had $1.5
million of brokered deposits at June 30, 1999 that were obtained before 1998.
Depositors with certificates of deposit in excess of $100,000 are generally rate
sensitive, and deposits obtained from the internet and brokered deposits are
very rate sensitive. Accordingly, attracting and retaining such deposits
depends upon maintaining competitive rates.
Crescent Bank has not solicited brokered deposits since 1997. As a well
capitalized institution, Crescent Bank may elect to solicit, renew or roll over
brokered deposits. See "Regulation - Crescent Bank - Brokered Deposits."
65
<PAGE>
The following table shows the average balance of each type of deposit and
the average rate paid on each type of deposit for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
---------------------------------------- ---------------------------------------------------------
1998 1999 1998 1997 1996
------------------- ------------------- ------------------ ------------------- ------------------
Average Average Average Average Average
Average Rate Average Rate Average Rate Average Rate Average Rate
Balance Paid Balance Paid Balance Paid Balance Paid Balance Paid
-------- ------- -------- ------- -------- ------- -------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
(Dollars in Thousands)
Noninterest-bearing checking
accounts $ 10,648 --% $ 7,841 --% $ 8,406 --% $ 8,510 --% $ 8,661 --%
NOW Accounts 3,894 1.95 2,843 1.97 3,037 1.98 2,434 1.97 2,004 1.95
Money market deposit accounts 2,977 2.35 7,280 3.21 5,405 3.00 3,844 2.39 4,182 2.56
Other savings accounts 1,444 2.22 1,368 2.19 1,317 2.28 1,571 2.23 1,979 2.27
Certificates of deposit of
$100,000 or more 42,646 5.64 35,765 5.98 38,515 5.93 25,575 6.29 20,917 6.38
Certificates of deposit under
$100,000 189,029 5.65 165,917 5.95 174,185 5.96 139,291 6.08 99,137 6.23
-------- -------- -------- -------- --------
Total interest-bearing $250,638 5.29 $221,014 5.58 $230,865 5.59 $181,225 5.65 $136,880 5.62
deposits (1) ======== ======== ======== ======== ========
</TABLE>
___________________
(1) Excludes accrued interest payable.
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<PAGE>
The following table presents, by rate category, the remaining maturity of
our certificates of deposit outstanding at June 30, 1999.
<TABLE>
<CAPTION>
Period to Maturity from June 30, 1999
----------------------------------------------------------
One Year Over 1 to 2 Over 2 to Over 3
or Less Years 3 Years Years Total
--------- ----------- --------- ------ -------
<S> <C> <C> <C> <C> <C>
(In Thousands)
3.01% - 4.00% $ 2,267 $ -- $ -- $ -- $ 2,267
4.01% - 5.00% 27,209 15,285 2,973 129 45,596
5.01% - 6.00% 73,673 25,653 11,209 4,708 115,243
6.01% - 7.00% 34,321 27,504 1,838 334 63,997
-------- ------- ------- ------ --------
Total $137,470 $68,442 $16,020 $5,171 $227,103
======== ======= ======= ====== ========
</TABLE>
The following table shows the maturities of our certificates of deposit
having principal amounts of $100,000 or more at June 30, 1999.
<TABLE>
<CAPTION>
Certificates of deposit maturing
in quarter ending: Amount
- ------------------------------------ --------------
(In Thousands)
<S> <C>
September 30, 1999 $ 8,415
December 31, 1999 7,146
March 31, 2000 4,040
June 30, 2000 6,007
After June 30, 2000 18,209
-------
Total certificates of deposit with
balances of $100,000 or more $43,817
=======
</TABLE>
Borrowings. In 1995, we obtained a $2.0 million loan from an unaffiliated
financial institution in order to make a capital contribution to Crescent Bank.
This loan was originally for one year and has been extended annually for an
additional year. In 1997, the loan balance was increased to $2.4 million when
we ceased operating an uninsured subsidiary and rolled the subsidiary's
remaining debt into the $2.0 million loan. This loan requires quarterly
interest payments, with principal due at maturity. We also obtained a $1.8
million loan from the same institution in December 1997 to make an additional
capital contribution to Crescent Bank. This loan matures on September 30, 2000,
with principal payments of $600,000 due annually.
The above two notes payable are secured by all of the outstanding common
stock of Crescent Bank and by personal guarantees of our shareholders. These
notes payable will be repaid with the net proceeds from our sale of the junior
subordinated debentures to the trust. See "How Our Net Proceeds Will Be Used."
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<PAGE>
In December 1997, Crescent Bank obtained $8.0 million of FHLB advances to
partially fund a loan purchase. These fixed-rate advances require monthly
principal and interest payments and mature between June 1, 2000 and December 1,
2003. At June 30, 1999, FHLB advances amounted to $8.0 million. See Note F of
Notes to Consolidated Financial Statements.
Crescent Bank may obtain advances from the FHLB of Dallas upon the security
of the common stock it owns in that bank and certain of its residential mortgage
loans and mortgage-backed securities, provided certain standards related to
creditworthiness have been met. These advances are made pursuant to several
credit programs, each of which has its own interest rate and range of
maturities. FHLB advances are generally available to meet seasonal and other
withdrawals of deposit accounts and to permit increased lending. As of June 30,
1999, Crescent Bank was permitted to borrow up to an additional $3.5 million
from the FHLB of Dallas, net of additional FHLB stock that we would need to
purchase. See "Regulation - Crescent Bank - Federal Home Loan Bank System."
The following table presents information regarding our total borrowings at
or for the dates indicated:
<TABLE>
<CAPTION>
At or for the
Six Months Ended At or for the
June 30, Year Ended December 31,
-------------------- -----------------------------
1999 1998 1998 1997 1996
--------- ------- ------- ------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Total borrowings:
Average balance outstanding $11,474 $12,124 $11,954 $ 3,496 $2,380
Maximum amount outstanding at any
month-end during the period $11,624 $12,224 $12,224 $12,224 $3,000
Balance outstanding at end of period $11,324 $12,074 $11,624 $12,224 $3,000
Average interest rate during the period 6.40% 6.80% 6.78% 6.52% 7.27%
Weighted average interest rate at end of
period 6.74% 6.52% 6.79% 7.84% 8.45%
</TABLE>
Subsidiaries of CB&T
At June 30, 1999, we had no active subsidiaries other than Crescent Bank.
Employees
We had 234 full-time equivalent employees at June 30, 1999. None of these
employees are represented by a collective bargaining agreement, and we believe
that we enjoy good relations with our personnel.
Competition
Crescent Bank faces significant competition both in attracting deposits and
in making loans. Its most direct competition for deposits has come historically
from commercial banks, credit unions and other savings institutions located in
its primary market area, including many large financial institutions which have
greater financial and marketing resources available to them. In addition,
Crescent Bank
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<PAGE>
faces significant competition for investors' funds from short-term money market
securities, mutual funds and other corporate and government securities. Crescent
Bank does not rely upon any individual group or entity for a material portion of
its deposits. Crescent Bank's ability to attract and retain deposits depends on
its ability to generally provide a rate of return, liquidity and risk comparable
to that offered by competing investment opportunities.
The market for subprime automobile loans is highly fragmented, consisting
of a few national and many regional and local competitors. Existing and
potential competitors include well-established financial institutions, such as
consumer finance companies, commercial banks, insurance companies, credit
unions, savings and loan associations, small loan companies, leasing companies
and captive finance companies owned by automobile manufacturers and others.
Many of these financial institutions do not consistently solicit business in the
subprime market. We believe that captive finance companies generally focus on
new car financing and direct their marketing efforts to the subprime market only
when inventory control and/or production scheduling requirements of their parent
organization dictate a need to enhance sales volumes, and then exit the market
once such sales volumes are satisfied. Recently, however, two major captive
finance companies have established subprime consumer finance companies. We also
believe that regulatory oversight and capital requirements imposed by
governmental agencies have limited the activities of many banks and savings
institutions in the subprime market. As a result, the subprime market is
primarily serviced by smaller finance companies that solicit business when and
as their capital resources permit. Due to the lack of major, consistent
financing sources and the absence of significant barriers to entry, many
companies have entered this market in recent years, including well-capitalized
public companies.
Crescent Bank's competition for real estate loans comes principally from
mortgage banking companies, commercial banks, other savings institutions and
credit unions. Crescent Bank competes for loan originations primarily through
the interest rates and loan fees it charges, and the efficiency and quality of
services it provides to real estate agents and brokers. Factors which affect
competition include general and local economic conditions, current interest rate
levels and volatility in the mortgage markets. Competition may increase as a
result of the continuing reduction of restrictions on the interstate operations
of financial institutions and the anticipated slowing of refinancing activity.
Properties
We conduct our business from our headquarters at 1100 Poydras Street, New
Orleans, Louisiana 70163, one full service branch in New Orleans, one limited
branch/operations center in New Orleans, eight loan production offices
throughout Louisiana, and seven loan production services facilities in
Mississippi, Georgia, Tennessee and Kentucky. The estimated net book value of
the electronic data processing and other office equipment owned by us was
$906,000 at June 30, 1999. The following table sets forth certain information
with respect to our home office, branch offices and loan production offices at
June 30, 1999.
All of our offices are leased for varying terms. Our loan production
offices generally have short lease terms to increase our flexibility if these
offices do not produce sufficient volume. Because the loan production offices
generally have a relatively small square footage, we believe that we can find
other comparable space in the same area if we are unable to renew the lease on
satisfactory terms.
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<PAGE>
<TABLE>
<CAPTION>
Square
Description/Address Lease Expiration Date Deposits Footage
- ------------------------------------- ----------------------- -------------- --------
(In Thousands)
<S> <C> <C> <C>
Headquarters:
1100 Poydras Street
New Orleans, LA 70163 May 17, 2002 $ 85,789 5,549
Full service branch:
244 W. Harrison Ave.
New Orleans, LA 70124 December 31, 2000(2) 160,002 1,800
Limited Branch/Operation Center(1):
225 Baronne St.
New Orleans, LA 70112 December 31, 2007(3) -- 46,200
Loan Production Offices(1):
200 Old Spanish Trail Ste. 102
Slidell, LA 70458 March 31, 2000 -- 736
9624 Brookline Ave.
Baton Rouge, LA 70816 September 30, 2003 -- 2,105
315 S. College Ste. 275
Lafayette, LA 70503 January 31, 2000 -- 982
4621 W. Napoleon Ste. 307
Metairie, LA 70001 September 30, 1999(4) -- 4,322
710 W. Prien Lake Rd.
Suite 109
Lake Charles, LA 70605 May 19, 2000 -- 928
900 Pierremont Ste. 120
Shreveport, LA 71106 August 31, 2000 -- 1,310
3845 Highway 22 Ste. 1
Mandeville, LA 70446 September 30, 2001 -- 1,980
5415 Jackson St. Ext.
Suite 100
Alexandria, LA 71303 September 30, 2000 -- 1,500
2432 Pass Road Ste. 1
Biloxi, MS 39531 Month to month -- 900
607 Corrine St. Ste. A2
Hattiesburg, MS 39401 March 31, 2000 -- 1,200
</TABLE>
70
<PAGE>
<TABLE>
<CAPTION>
Square
Description/Address Lease Expiration Date Deposits Footage
- ------------------------------------- ----------------------- -------------- --------
(In Thousands)
<S> <C> <C> <C>
4500 I-55 North Ste. 220
Jackson, MS 39211 August 31, 2000 -- 756
9040 Executive Park Dr. Ste. 301
Knoxville, TN 37923 April 30, 2001 -- 991
6263 Poplar Ave. Ste. 702
Memphis, TN 38119 August 31, 2002 -- 1,390
132 Stephenson Ave. Ste. 203
Savannah, GA 31405 June 30, 2001 -- 800
1045 Industry Rd.
Lexington, KY 40505 July 31, 2001 -- 1,200
</TABLE>
______________________
(1) No deposit transactions are allowed in these offices, and in addition no
on-site lending decisions are allowed in the offices outside of Louisiana.
(2) We have the right to extend this lease twice for five years at a time.
(3) We have the right to opt out of this lease at certain specified dates prior
to December 31, 2007.
(4) We intend to re-locate this office to smaller space within the same
building pursuant to a new lease when the current lease expires.
No Material Legal Proceedings
We are involved in routine legal proceedings occurring in the ordinary
course of business which, in the aggregate, are believed by management to be
immaterial to our consolidated financial condition and results of operations.
REGULATION
Introduction
We are a bank holding company within the meaning of the Bank Holding
Company Act. As a bank holding company, we are subject to the regulations,
examination, supervision and reporting requirements of the Board of Governors of
the Federal Reserve System. Crescent Bank, as a Louisiana-chartered commercial
bank, has its deposits insured by the Federal Deposit Insurance Corporation
through the Bank Insurance Fund. Crescent Bank is subject to examination and
regulation by the Federal Deposit Insurance Corporation and the Louisiana Office
of Financial Institutions, and it is a member of the Federal Home Loan Bank
System. Crescent Bank must comply with regulations regarding matters
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<PAGE>
such as capital standards, establishment of branch offices, lending activities,
and general investment authority. The purpose of this examination and regulation
is primarily to protect depositors.
The descriptions of the statutes and regulations which are applicable to us
and the effects of the statutes and regulations are summarized below and
elsewhere in this prospectus. This summary does not purport to be a complete
description of the statutes and regulations and their effects on us. In
addition, this summary does not identify every statute and regulation that may
apply to us.
CB&T
Limitations on Activities. As a bank holding company, we are subject to
restrictions relating to our activities and investments. Among other things, we
are generally prohibited, either directly or indirectly, from acquiring control
of any other bank or holding company, without prior regulatory approval, and
from acquiring more than 5% of the voting stock of any bank or bank holding
company which is not a subsidiary.
As a bank holding company, we are also prohibited from acquiring more than
5% of the voting shares of any company that is not a bank and from engaging in
any business other than banking or managing or controlling banks, subject to
certain exceptions. The Federal Reserve Board is authorized to approve the
ownership of shares by a bank holding company in any company the activities of
which the Federal Reserve Board has determined to be so closely related to
banking or to managing or controlling banks as to be a proper incident thereto.
In making such determinations, the Federal Reserve Board is required to weigh
the expected benefit to the public, such as greater convenience, increased
competition or gains in efficiency, against the possible adverse effects, such
as undue concentration of resources, decreased or unfair competition, conflicts
of interest or unsound banking practices.
Capital Requirements. As of June 30, 1999, we meet the capital adequacy
guidelines adopted by the Federal Reserve Board to assess the capital adequacy
of bank holding companies. In addition, Crescent Bank was a well capitalized
institution at that date. See Note M of Notes to Consolidated Financial
Statements.
Affiliated Institutions. Under Federal Reserve Board policy, we are
expected to act as a source of financial strength to Crescent Bank and to commit
resources to support our subsidiary bank in circumstances when we might not do
so absent such policy. We have contributed additional capital to our bank
subsidiary in the past, and we intend to use a portion of the net proceeds from
our sale of the junior subordinated debentures to the trust to make an
additional capital contribution to Crescent Bank. See "How Our Net Proceeds Will
Be Used." The Federal Reserve Board takes the position that its policy may
require bank holding companies to provide support even when the holding company
otherwise would not consider itself able to do so.
A bank holding company is a legal entity separate and distinct from its
subsidiary bank. Normally, the major source of a holding company's revenue is
dividends a holding company receives from its subsidiary bank. The right of a
bank holding company to participate as a stockholder in any distribution of
assets of its subsidiary bank upon the bank's liquidation or reorganization or
otherwise is subject to the prior claims of creditors of such subsidiary bank.
The subsidiary bank is subject to claims by creditors for long-term and short-
term debt obligations, as well as deposit liabilities.
72
<PAGE>
Federal laws limit the transfer of funds by a subsidiary bank to its
holding company in the form of loans or extensions of credit, investments or
purchases of assets. Transfers of this kind are limited to 10% of a bank's
capital and surplus with respect to each affiliate and to 20% in the aggregate,
and are also subject to certain collateral requirements. These transactions, as
well as other transactions between a subsidiary bank and its holding company,
also must be on terms substantially the same as, or at least as favorable as,
those prevailing at the time for comparable transactions with non-affiliated
companies or, in the absence of comparable transactions, on terms or under
circumstances, including credit standards, that would be offered to, or would
apply to, non-affiliated companies.
Limitations on Acquisitions of Our Common Stock. No person or group of
persons can acquire "control" of a bank holding company unless the Federal
Reserve Board has been given 60 days' prior written notice of such proposed
acquisition and within that time period the Federal Reserve Board has not issued
a notice disapproving the proposed acquisition or extending for up to another 30
days the period during which such a disapproval may be issued. Control is
conclusively presumed to exist if, among other things, a person acquires more
than 25% of any class of voting stock of the institution or holding company or
controls in any manner the election of a majority of the directors of the
institution or the holding company. An acquisition may be made prior to
expiration of the disapproval period if the Federal Reserve Board issues written
notice of its intent not to disapprove the action. In addition, any "company"
would be required to obtain the approval of the Federal Reserve Board before
acquiring 25% (5% in the case of an acquiror that is a bank holding company) or
more of our outstanding common stock.
Crescent Bank
General. Crescent Bank is subject to extensive regulation and examination
by the Office of Financial Institutions and the FDIC, and to certain
requirements established by the Federal Reserve Board. The federal and state
laws and regulations which are applicable to banks govern, among other things,
the scope of their business, their investments, their reserves against deposits,
the timing of the availability of deposited funds and the nature and amount of
and collateral for loans.
Capital Requirements. Crescent Bank is subject to regulatory capital
requirements of the FDIC. At June 30, 1999, Crescent Bank exceeded each of its
capital requirements. See Note M of Notes to Consolidated Financial Statements.
Prompt Corrective Action. The following table shows the amount of capital
associated with the different capital categories set forth in the prompt
corrective action regulations.
Total Tier 1 Tier 1
Risk-Based Risk-Based Leverage
Capital Category Capital Capital Capital
- -----------------------------------------------------------------------------
Well capitalized 10% or more 6% or more 5% or more
Adequately capitalized 8% or more 4% or more 4% or more
Undercapitalized Less than 8% Less than 4% Less than 4%
Significantly undercapitalized Less than 6% Less than 3% Less than 3%
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<PAGE>
In addition, a bank is "critically undercapitalized" if it has a ratio of
tangible equity to total assets that is equal to or less than 2.0%. Under
specified circumstances, a federal banking agency may reclassify a well
capitalized institution as adequately capitalized and may require an adequately
capitalized institution or an undercapitalized institution to comply with
supervisory actions as if it were in the next lower category (except that the
FDIC may not reclassify a significantly undercapitalized institution as
critically undercapitalized).
An institution generally must file a written capital restoration plan which
meets specified requirements within 45 days of the date that the institution
receives notice or is deemed to have notice that it is undercapitalized,
significantly undercapitalized or critically undercapitalized. A federal
banking agency must provide the institution with written notice of approval or
disapproval within 60 days after receiving a capital restoration plan, subject
to extensions by the agency. An institution which is required to submit a
capital restoration plan must concurrently submit a performance guaranty by each
company that controls the institution. In addition, undercapitalized
institutions are subject to various regulatory restrictions, and the appropriate
federal banking agency also may take any number of discretionary supervisory
actions.
At June 30, 1999, Crescent Bank was deemed a well capitalized institution
for purposes of the above regulations and as such is not subject to the above
mentioned restrictions.
Safety and Soundness Guidelines. The federal banking agencies have
established guidelines for safety and soundness, addressing operational and
managerial standards, as well as compensation matters for insured financial
institutions. Institutions failing to meet these standards are required to
submit compliance plans to their appropriate federal regulators. The FDIC and
the other agencies have also established guidelines regarding asset quality and
earnings standards for insured institutions. Crescent Bank believes that it is
in compliance with these guidelines and standards.
FDIC Insurance Premiums. The deposits of Crescent Bank are insured by the
Bank Insurance Fund administered by the FDIC, to the maximum extent permitted by
law. As an FDIC-insured institution, Crescent Bank is required to pay deposit
insurance premiums to the FDIC. The assessment schedule ranges from 0 basis
points (subject to a $2,000 annual minimum) to 27 basis points. The assessment
rate for Crescent Bank is currently .03% per annum of insured deposits. In
addition, FDIC-insured institutions are assessed approximately .013% per annum
of insured deposits in order for a federally-chartered finance corporation to
make payments on it bonds.
Bank Branching. Our bank subsidiary is able to open one or more branches
in Louisiana, subject to prior approval by the Louisiana commissioner of
financial institutions. Upon application, the commissioner would consider
Crescent Bank's financial condition, capital adequacy, earnings prospects,
management and the needs of the community.
Brokered Deposits. A well capitalized institution may solicit and accept,
renew or roll over any brokered deposit without restriction, while the use of
brokered deposits by adequately capitalized institutions is restricted. An
adequately capitalized institution may not accept, renew or roll over any
brokered deposits unless it has applied for and been granted a waiver of this
prohibition by the FDIC. The FDIC may waive the restriction on brokered deposits
upon a finding that the acceptance of brokered deposits does not constitute an
unsafe or unsound practice with respect to such institution. Crescent Bank does
not currently solicit brokered deposits. At June 30, 1999, Crescent Bank had
$1.5 million of
74
<PAGE>
brokered deposits, and Crescent Bank was a well capitalized institution at that
date. In the event Crescent Bank becomes adequately capitalized before the
brokered deposits mature, it could not renew or roll over these deposits without
receiving a waiver from the FDIC. An undercapitalized institution may not (a)
accept, renew or roll over any brokered deposit or (b) solicit deposits by
offering an effective yield that exceeds by more than 75 basis points the
prevailing effective yields on insured deposits of comparable maturity in the
institution's normal market area or in the market area in which such deposits
are being solicited.
Regulatory Guidance on Subprime Lending. In March 1999, the federal
banking agencies issued an interagency guidance on subprime lending, which is
defined in the guidance as extending credit to borrowers who have a
significantly higher risk of default than traditional bank lending customers.
The guidance applies to direct extensions of credit; the purchase of subprime
loans from other lenders, including delinquent or credit impaired loans
purchased at a discount; the purchase of subprime automobile or other financing
paper from lenders or dealers; and the purchase of loan companies that originate
subprime loans. The guidance provides that institutions should recognize the
additional risks inherent in subprime lending and determine if these risks are
acceptable and controllable given the institution's staff, financial condition,
size and level of capital support. Institutions that engage in subprime lending
in any significant way should have board-approved policies and procedures, as
well as internal controls that identify, measure, monitor and control these
additional risks. The agencies believe that the following items are essential
components of a well-structured risk management program for subprime lenders:
. adequate planning and strategy;
. sufficient staff expertise;
. appropriate lending policy;
. thorough purchase evaluation;
. strong loan administration procedures;
. ongoing loan review and monitoring;
. special care to comply with consumer protection laws and regulations;
. adequate planning with respect to securitization and sale of subprime
loans; and
. periodic evaluation of the institution's subprime lending program.
If the risks associated with this activity are not properly controlled, the
banking agencies consider subprime lending a high-risk activity that is unsafe
and unsound. In light of the higher risks associated with this type of lending,
the agencies may impose higher minimum capital requirements on institutions
engaging in subprime lending. Due to the high-risk nature of subprime lending,
banking examiners will carefully evaluate this activity during regular and
special examinations. We believe that Crescent Bank is conducting its subprime
lending operations in accordance with the guidance and that the guidance will
have no material effect on the bank's operations.
Consumer Protection Laws. Crescent Bank's business is subject to
regulation and licensing under various federal, state and local statutes and
regulations. Most states in which Crescent Bank purchases loans (a) limit the
interest rate, fees and other charges that may be imposed by, or prescribe
certain other terms of, the loans that Crescent Bank purchases and (b) define
Crescent Bank's right to repossess and sell collateral. In addition, Crescent
Bank is required to be licensed or registered to conduct its business operations
in each of the five states in which Crescent Bank has contractual
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<PAGE>
relationships with dealers. As Crescent Bank expands its operations into other
states, it will be required to comply with the laws of such states.
Numerous federal and state consumer protection laws and related regulations
impose substantive disclosure requirements upon lenders and servicers involved
in automobile financing. Such federal laws and regulations include the Truth-
In-Lending Act and Regulation Z, promulgated thereunder by the Federal Reserve
Board, the Equal Credit Opportunity Act and Regulation B, also promulgated
thereunder by the Federal Reserve Board, the Federal Trade Commission Act, the
Fair Credit Reporting Act, the Federal Fair Debt Collection Practices Act and
similar state collection acts, the Magnuson-Moss Warranty Act, and the Soldiers'
and Sailors' Civil Relief Act. Crescent Bank's residential loans also need to
comply with the Federal Home Mortgage Disclosure Act and the Real Estate
Settlement Procedures Act.
In addition, the Federal Trade Commission ("FTC") has adopted a limitation
on the holder-in-due-course rule which may have the effect of subjecting persons
who finance consumer credit transactions (and certain related lenders and their
assignees) to all claims and defenses that the purchaser could assert against
the seller of the goods and services. With respect to used automobiles
specifically, the FTC's Rule on Sale of Used Vehicles requires that all sellers
of used automobiles prepare, complete and display a buyer's guide that explains
the warranty coverage for such automobiles. The credit practices rules of the
FTC impose additional restrictions on sales contract provisions and credit
practices.
Certain states in which Crescent Bank operates have adopted automobile
retail installment sale acts or variations thereof. Certain states have adopted
the Uniform Consumer Credit Code, subject to certain variations. This law and
similar laws in the other states in which Crescent Bank purchases loans
regulate, among other things, the interest rate, fees and other charges and
terms and conditions of such loans. These laws also impose restrictions on
consumer transactions and require disclosures in addition to those required
under federal law. These requirements impose specific statutory liabilities
upon creditors who fail to comply with such laws and regulations. In addition,
certain states impose plain-language restrictions and disclosure requirements on
the textual provisions of automobile retail installment sales contracts and
related documents in the context of consumer credit transactions. The plain-
language laws impose specific liabilities on creditors who fail to comply with
such requirements.
The laws of certain states grant to the purchasers of automobiles certain
rights of rescission under so-called "lemon laws." Under such statutes,
purchasers of automobiles may seek recoveries from, or assert defenses against,
Crescent Bank if such laws have been violated.
In the event of default by an obligor, Crescent Bank possesses all the
remedies of a secured party under the respective state variation of the Uniform
Commercial Code ("UCC"), except where specifically limited by other state laws.
The remedies of a secured party under the UCC include the right to repossession
by self-help means, unless such means would constitute a breach of the peace.
In the event of default by the obligor, some jurisdictions require that the
obligor be notified and be given time in which to cure the default prior to
repossession. In addition, courts have applied general equitable principles to
secured parties pursuing repossession or litigation involving deficiency
balances.
The UCC and other state laws require a secured party who has repossessed
collateral to provide an obligor with reasonable notice of the date, time and
place of any public sale and/or the date after
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<PAGE>
which any private sale of the collateral may be held. The obligor has the right
to redeem the collateral prior to actual sale.
The proceeds from the resale of financed automobiles generally will be
applied first to the expenses of repossession and resale and then to the
satisfaction of the loan. A deficiency judgment can be sought in most states
subject to satisfaction of statutory procedural requirements by the secured
party and certain limitations as to the initial sale price of the automobile.
Certain state laws require the secured party to remit the surplus to any holder
of a subordinate lien with respect to the automobiles or, if no such lienholder
exists, the UCC requires the secured party to remit the surplus to the former
owner of the financed automobile.
In addition to laws limiting or prohibiting deficiency judgments, numerous
other statutory provisions, including federal bankruptcy laws and related state
laws, may interfere with or affect the ability of Crescent Bank to recover
collateral or enforce a deficiency judgment.
Crescent Bank believes that it is in substantial compliance with all
applicable material laws and regulations. Adverse changes in the laws or
regulations to which Crescent Bank's business is subject, or in the
interpretation thereof, could have a material adverse effect on Crescent Bank's
business.
Community Reinvestment Act. Financial institutions have a responsibility
under the Community Reinvestment Act ("CRA") and related regulations to help
meet the credit needs of their communities, including low- and moderate-income
neighborhoods. The CRA requires insured institutions to define the communities
that they serve, identify the credit needs of those communities and adopt and
implement a "Community Reinvestment Act Statement" pursuant to which they offer
credit products and take other actions that respond to the credit needs of the
community. The responsible federal banking regulator must conduct regular CRA
examinations of insured financial institutions and assign to them a CRA rating
of "outstanding," "satisfactory," "needs improvement" or "unsatisfactory." The
CRA rating of Crescent Bank is currently "satisfactory."
Limitations on Dividends. We are a legal entity separate and distinct from
our banking subsidiary. Our principal source of revenue consists of dividends
from Crescent Bank. The payment of dividends by Crescent Bank is subject to
various regulatory requirements. Under Louisiana law, the maximum dividends
that can be declared and paid during any one year cannot exceed the bank's net
earnings for that year and the immediately preceding year, unless prior
regulatory approval is obtained to pay a higher amount. Based on its net
earnings for the first half of 1999 and for 1998, and subtracting dividends
previously paid during this period, Crescent Bank could pay us a dividend of up
to $2.6 million without prior regulatory approval.
Federal Home Loan Bank System. Crescent Bank is a member of the FHLB of
Dallas, which is one of 12 regional FHLBs that administers the home financing
credit function of financial institutions. Each FHLB serves as a reserve or
central bank for its members within its assigned region. It is funded primarily
from proceeds derived from the sale of consolidated obligations of the FHLB
System. It makes loans to members (i.e., advances) in accordance with policies
and procedures established by the Board of Directors of the FHLB. At June 30,
1999, Crescent Bank had $8.0 million of FHLB advances. See Note F of Notes to
Consolidated Financial Statements.
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As a member, Crescent Bank is required to purchase and maintain stock in
the FHLB of Dallas in an amount equal to at least 1% of its aggregate unpaid
residential mortgage loans or similar obligations at the beginning of each year.
At June 30, 1999, Crescent Bank had $844,000 in FHLB stock, which was in
compliance with this requirement.
Federal Reserve System. The Federal Reserve Board requires all depository
institutions to maintain reserves against their transaction accounts (primarily
NOW and Super NOW checking accounts) and non-personal time deposits. As of June
30, 1999, no reserves were required to be maintained on the first $4.9 million
of transaction accounts, reserves of 3% were required to be maintained against
the next $46.5 million of net transaction accounts, and a reserve of 10% against
all remaining net transaction accounts. The above dollar amounts and
percentages are subject to periodic adjustment by the Federal Reserve Board.
Because required reserves must be maintained in the form of vault cash or a
noninterest-bearing account at a Federal Reserve Bank, the effect of this
reserve requirement is to reduce an institution's earning assets.
Miscellaneous. Crescent Bank is subject to certain restrictions on loans
to us, on investments in the stock or securities thereof, on the taking of such
stock or securities as collateral for loans to any borrower, and on the issuance
of a guarantee or letter of credit on our behalf. Our banking subsidiary also
is subject to certain restrictions on most types of transactions with us, with
the terms of such transactions required to be substantially equivalent to the
terms of similar transactions with non-affiliated firms.
Regulatory Enforcement Authority. The enforcement powers available to
federal banking regulators are substantial and include, among other things, the
ability to assess civil money penalties, to issue cease-and-desist or removal
orders and to initiate injunctive actions against banking organizations and
institution-affiliated parties, as defined. In general, these enforcement
actions may be initiated for violations of laws and regulations and unsafe or
unsound practices. Other actions or inactions may provide the basis for
enforcement action, including misleading or untimely reports filed with
regulatory authorities.
TAXATION
Federal Taxation
Effective January 1, 1998, we became a Subchapter S corporation for federal
income tax purposes. As a result, we generally do not pay federal income taxes
at the corporate level. Instead, the tax liability on our taxable income is
passed through to the holders of our common stock, who pay taxes on such income
on a pro rata basis.
Our deferred tax assets were written off in 1998, which resulted in federal
income expense in 1998. In addition, if we dispose of assets that were owned by
us on January 1, 1998 at a gain during the first 10 years following January 1,
1998, then we will pay federal income taxes on the difference between the fair
value of the asset as of January 1, 1998 and our tax basis in the asset as of
that date. See Notes A and H of Notes to Consolidated Financial Statements.
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We must satisfy certain tests in order to continue to qualify as a
Subchapter S corporation. A Subchapter S corporation can have no more than 75
shareholders and no more than one class of stock. In addition, all of the
shareholders of a Subchapter S corporation must be individuals, estates or
certain trusts and must be citizens or residents of the United States. At June
30, 1999, we had 11 shareholders, all of whom met these requirements. Because
the transfer of our common stock is restricted under federal and state
securities laws, and because our existing shareholders have a right of first
refusal to buy any shares that a shareholder wishes to transfer to persons other
than lineal descendants or certain trusts, we expect to continue to meet the
requirements to be a Subchapter S corporation. In addition, our counsel has
opined that the junior subordinated debentures to be issued by us to the trust
will not be a separate "class of stock" for purposes of the IRS regulations
governing S corporations. See "Federal Income Tax Consequences - No Impact on S
Corporation Status."
We intend to pay dividends to our shareholders in amounts that are
sufficient to cover their federal income tax liability on our income. We paid
dividends totalling $2.8 million with respect to our 1998 income and, through
June 30, 1999, dividends totalling $1.5 million with respect to our income for
the six months ended June 30, 1999. Our ability to pay dividends is limited by
federal and state regulations. See "Regulation - Crescent Bank - Limitations on
Dividends."
If we were to lose our status as a Subchapter S corporation, then we would
be subject to federal income taxes at the corporate level and our shareholders
would be subject to federal income taxes on any cash dividends or other
distributions that we paid to them.
State Taxation
Crescent Bank is subject to the Louisiana Shares Tax which is imposed on
the assessed value of a company's stock. The formula for deriving the assessed
value is to calculate 15% of the sum of
(a) 20% of a company's capitalized earnings, plus
(b) 80% of our taxable shareholders' equity,
and to subtract from that figure 50% of our real and personal property
assessment. Various items may also be subtracted in calculating a company's
capitalized earnings.
In Louisiana, Georgia, Kentucky and Mississippi, we file as a Subchapter S
corporation and are not subject to state income taxes at the corporate level.
In Tennessee, we are subject to an excise tax of 6% of our income apportioned to
Tennessee.
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MANAGEMENT OF CB&T
Directors of CB&T
Our board of directors consists of seven persons. All directors are
elected for one-year terms, or until their successors are elected and qualified.
No director is related to any other director or executive officer of CB&T or
Crescent Bank by first cousin or closer, except that Gary N. Solomon and Martha
N. Solomon are husband and wife. The following table sets forth certain
information regarding our directors, all of whom are also directors of Crescent
Bank.
<TABLE>
<CAPTION>
Position with CB&T and Crescent Bank
and Principal Occupation During the Director
Name Age(1) Past Five Years Since (2)
---- ------ -------------------------------------- ---------
<S> <C> <C> <C>
Gary N. Solomon 42 Director; Chairman of the Board and Chief 1991
Executive Officer of CB&T since 1994 and
Crescent Bank since 1991
Ronald P. Briggs 52 Director; self-employed since February 1995 1991
and involved in various ventures in real estate,
retail and licensed beverage outlets; prior
thereto, Vice President-Development at David
Briggs Enterprises in Metairie, La., with
responsibility for real estate, legal and political
action functions
Daniel B. Buckman 69 Director; business consultant with International 1992
Trade Consultants, Inc. in New Orleans, La.;
consultant to Crescent Bank since 1996
John A. Meltzer 46 President of Meltzer Properties, a real estate 1991
company in Metairie, La., and
Secretary/Treasurer of Dana Corporation, a
construction company in Harahan, La.
Fred B. Morgan, III 52 Director; President of CB&T since 1994 and 1991
Crescent Bank since 1991
Robert L. Redfearn 66 Partner in the law firm of Simon, Peragine, 1992
Smith & Redfearn, L.L.P. in New Orleans, La.
Martha N. Solomon 41 Director; Secretary of CB&T since 1994 and 1991
Crescent Bank since 1991
</TABLE>
__________________
(1) Age as of July 31, 1999.
(2) Includes service with Crescent Bank.
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Directors' Compensation
Directors of CB&T are not currently compensated by us but rather serve as
directors with and are compensated as such by Crescent Bank. It is not
anticipated that separate compensation will be paid to our directors until such
time as such persons devote significant time to the separate management of our
affairs, which is not expected to occur until we become actively engaged in
additional businesses other than holding the stock of Crescent Bank. We may
determine that such compensation is appropriate in the future.
Each director of Crescent Bank receives $500 for each regular meeting of
the Board of Directors attended. Directors are not paid for committee meetings
or for absences from meetings.
Executive Officers Who Are Not Directors
We have two executive officers who are not also directors, plus a lending
consultant. None of these three individuals is related to any other director or
executive officer of CB&T or Crescent Bank by first cousin or closer. The name,
age and business experience of these officers is set forth below.
Paul R. Trapani, Jr., age 48, has been the Executive Vice President of CB&T
since October 1997 and the Executive Vice President and Chief Operating Officer
of Crescent Bank since October 1997. He was Assistant Vice President of
Hibernia National Bank in New Orleans, La. from March 1996 through September
1997, with responsibility for loan and deposit pricing. Prior thereto, he was a
self-employed consultant to banks regarding mergers and acquisitions and asset
sales and purchases.
F. William Haacke, Jr., age 53, has been the Vice President and Chief
Financial Officer of Crescent Bank since March 1998. From 1995 to February
1998, he was Manager - Portfolio Advisory Services at First National Bank of
Commerce in New Orleans, La. Prior thereto, he was the Chief Financial Officer
of First Bank in Slidell, La.
Henry M. Wallis, age 58, has been a lending consultant to Crescent Bank
since January 1998. Mr. Wallis consults regarding loan purchases, the review of
loan packages, loan quality and marketing surveys. From 1991 through 1997, he
was a Senior Vice President of Crescent Bank in charge of consumer lending.
Our executive officers are elected annually and hold office until their
respective successors have been elected and qualified or until death,
resignation or removal by the Board of Directors.
Executive Compensation
The following table shows the compensation paid by us to our Chairman and
Chief Executive Officer during the periods indicated and each other executive
officer or consultant whose salary and bonus exceeded $100,000 during 1998.
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<TABLE>
<CAPTION>
Annual Compensation
Name and Principal ---------------------------------- All Other
Position Year Salary(1) Bonus Other(2) Compensation(3)
------------------ ---- --------- ----- -------- ---------------
<S> <C> <C> <C> <C> <C>
Gary N. Solomon, 1998 $ 75,500 $1,206,493 $612,145 $17,774
Chairman of the Board and 1997 79,000 1,178,768 -- 17,383
Chief Executive Officer 1996 80,000 991,966 -- 22,885
Fred B. Morgan, III, 1998 110,000 40,000 5,661 4,179
President 1997 100,000 35,000 -- 3,697
1996 100,000 35,000 -- 3,450
Henry M. Wallis, 1998 75,000 155,000 36,799 1,328
Lending Consultant, 1997 100,000 235,000 -- 6,060
previously Senior VP 1996 100,000 245,000 -- 5,661
Paul R. Trapani, Jr., 1998 100,000 104,000 -- 5,725
Executive Vice President and 1997 25,000 -- --
Chief Operating Officer
</TABLE>
______________________
(1) Includes directors' fees to Mr. Solomon of $500 in 1998, $4,000 in 1997 and
$5,000 in 1996. Mr. Solomon no longer receives separate directors' fees.
(2) Represents the individual's pro rata share of distributions made by CB&T to
its shareholders to cover their federal tax liability on CB&T's income.
Annual compensation does not include amounts attributable to other
miscellaneous benefits received by the individual. Our costs of providing
such benefits during 1998 did not exceed the lesser of $50,000 or 10% of
the total salary and bonus paid to or accrued for the benefit of each named
individual.
(3) Consists of contributions by us to our 401(k) plan.
Mr. Solomon has a bonus arrangement with Crescent Bank pursuant to which he
will be paid a bonus for 1999 equal to 20% of Crescent Bank's net earnings
before taxes in excess of $500,000. The bonus is paid quarterly. The bonus will
be paid only if Crescent Bank:
. has a return on average assets in excess of 1.88% on a pre-tax, pre-
bonus accrual basis,
. continues to be at least adequately capitalized,
. has no significant deterioration in asset quality, and
. receive one of the two highest ratings from the regulators in its then
most recent regulatory examination.
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The bonus to Mr. Solomon under this plan will not exceed $1,175,000 in 1999.
Consulting Agreement
In December 1997, Crescent Bank and Henry M. Wallis entered into a
consulting agreement, effective January 1, 1998. Mr. Wallis agreed to review
potential purchases of loan packages and to consult on lending or collection
matters for a fee of $3,000 per month, plus health insurance coverage. In
addition, Mr. Wallis agreed to perform due diligence on loan packages, review
loan quality control and perform branch marketing surveys at a rate of $50 per
hour, up to 400 hours annually. The hourly rate for additional hours is subject
to negotiation between Crescent Bank and Mr. Wallis. The consulting agreement
expires December 31, 2008, and Mr. Wallis agreed to not compete with respect to
automobile sub-prime lending during the term of the agreement.
Certain Transactions
The Sam M. and Gloria S. Newman Grandchildren's Irrevocable Trust (the
"Newman Trust") owns 21.6% of our outstanding common stock. In 1995, the Newman
Trust participated in the purchase of nonperforming loans to limit the risk to
Crescent Bank. The Newman Trust's participation interest was 50% of the
nonperforming loans purchased, and the participation interest amounted to
approximately $96,000 at June 30, 1999, $144,000 at December 31, 1998 and
$201,000 at December 31, 1997. The Newman Trust receives 50% of the revenues
from these loans and bears 50% of the collection and related expenses pertaining
to these loans. See Note I of Notes to Consolidated Financial Statements.
The Newman Trust and one of our directors, John A. Meltzer, lease office
space to Crescent Bank for a limited branch office. The rent paid on this lease
was approximately $52,000 for 1998 and $30,000 for the first half of 1999. The
lease expires September 30, 1999, and we intend to re-locate this office to
smaller space within the same building pursuant to a new lease with the Newman
Trust and Mr. Meltzer.
A company controlled by Mr. Buckman, one of our directors, provides
consulting services on an as needed basis to Crescent Bank regarding product
development, marketing, general banking issues and specific loan approvals. Mr.
Buckman's company receives a consulting fee of $500 per month for these
services. The consulting agreement is reviewed annually by our board of
directors.
Other than loans to and deposits from our directors and executive officers
and their related entities, we did not engage in any other major transactions
with these persons or entities in 1998 or the first half of 1999. See Note I of
Notes to Consolidated Financial Statements.
Indebtedness of Management
In the ordinary course of business, Crescent Bank makes loans available to
its directors, officers and employees. Such loans are made in the ordinary
course of business on the same terms, including interest rates and collateral,
as comparable loans to other borrowers. It is the belief of management that
these loans neither involve more than the normal risk of collectibility nor
present other unfavorable features. At June 30, 1999, Crescent Bank had 24
loans outstanding to directors and executive officers of Crescent Bank, or
members of their immediate families or related entities and trusts. These loans
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totalled approximately $5.6 million or 33.2% of our total shareholders' equity
at June 30, 1999. See Note I of Notes to Consolidated Financial Statements.
CB&T SHAREHOLDERS
At June 30, 1999, we had 204,000 shares of our common stock issued and
outstanding. The following table shows the number of shares held by:
(1) those persons or entities known by us to beneficially own more than 5%
of our common stock, including the addresses of such persons or
entities;
(2) each member of our board of directors; and
(3) all directors and executive officers of CB&T and Crescent Bank as a
group
Shares Beneficially Percent
Name of Beneficial Owner Owned of Class
------------------------ ------------------- --------
Directors of CB&T:
Gary N. Solomon(1) 44,115(2) 21.6%
Martha N. Solomon(1) 44,115(3) 21.6
Ronald Briggs(1) 44,115 21.6
John Meltzer 5,100 2.5
Daniel Buckman 2,040 1.0
Robert L. Redfearn 2,040 1.0
Fred B. Morgan, III 408(4) 0.2
All directors and executive
officers as a group (10
persons) 141,933 69.6
The Newman Trust(1) 44,115 21.6
_______________
(1) The business address of these individuals and trust is CB&T Holding
Corporation, 1100 Poydras Street, Suite 100, New Orleans, Louisiana 70163.
(2) Excludes the 44,115 shares held by Mr. Solomon's spouse, 10,200 shares held
by Mr. Solomon's brother, and 44,115 shares held by the Newman Trust for the
benefit of his children, as to which shares Mr. Solomon disclaims beneficial
ownership.
(3) Excludes the 44,115 shares held by Mrs.Solomon's spouse, 10,200 shares held
by Mrs. Solomon's brother-in-law, and 44,115 shares held by the Newman Trust
for the benefit of her children, as to which shares Mrs. Solomon disclaims
beneficial ownership.
(4) Excludes the 44,115 shares held by the Newman Trust, of which Mr. Morgan is
one of three trustees. Mr. Morgan disclaims beneficial ownership of these
shares.
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DESCRIPTION OF THE TRUST
The trust is a statutory business trust formed pursuant to the Delaware
Business Trust Act under a declaration of trust (the "trust agreement") executed
by us, as sponsor for the trust, and the trustees, and a certificate of trust
filed with the Delaware Secretary of State. The trust agreement will be amended
and restated in its entirety in the form filed as an exhibit to the registration
statement of which this prospectus is a part, as of the date the capital
securities are initially issued. The trust agreement will be qualified under
the Trust Indenture Act of 1939.
Upon issuance of the capital securities, the holders will own all of the
issued and outstanding capital securities. We will acquire common securities in
an amount equal to at least 3% of the total capital of the trust and will own,
directly or indirectly, all of the issued and outstanding common securities
(together with the capital securities, the "trust securities"). The trust
exists for the purposes of:
. issuing the capital securities to the public for cash;
. issuing its common securities to us in exchange for our capitalization
of the trust;
. investing the proceeds in an equivalent amount of debentures; and
. engaging in other activities that are necessary, convenient or
incidental to those listed above.
The rights of the holders of the trust securities are as set forth in the
trust agreement, the Delaware Business Trust Act and the Trust Indenture Act.
The trust agreement does not permit the incurrence by the trust of any
indebtedness for borrowed money or the making of any investment other than in
the debentures. Other than with respect to the trust securities, we have agreed
to pay for all debts and obligations and all costs and expenses of the trust,
including the fees and expenses of the trustees and any income taxes, duties and
other governmental charges, and all costs and expenses related to these charges,
to which the trust may become subject, except for United States withholding
taxes that are properly withheld.
Pursuant to the trust agreement, the number of trustees of the trust will
initially four. Three of the trustees will be persons who are employees or
officers of or who are affiliated with us (the "administrative trustees"). The
fourth trustee will be Wilmington Trust Company, a Delaware banking corporation
that is unaffiliated with us, maintains its principal place of business in the
State of Delaware, and will serve as institutional trustee under the trust
agreement and as indenture trustee for the purposes of compliance with the
provisions of the Trust Indenture Act (the "property trustee"). For the purpose
of compliance with the provisions of the Trust Indenture Act, Wilmington will
also act as guarantee trustee under the guarantee agreement. As holder of all of
the common securities, we will have the right to appoint, remove or replace any
trustee unless an event of default under the indenture shall have occurred and
be continuing, in which case only the holders of the capital securities may
remove the indenture trustee or the property trustee. The trust has a term of
approximately 30 years but may terminate earlier as provided in the trust
agreement.
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The property trustee will hold the debentures for the benefit of the
holders of the trust securities and will have the power to exercise all rights,
powers and privileges under the indenture as the holder of the debentures. In
addition, the property trustee will maintain exclusive control of a segregated
noninterest-bearing "property account" to hold all payments made in respect of
the debentures for the benefit of the holders of the trust securities. The
property trustee will make payments of distributions and payments on
liquidation, redemption and otherwise to the holders of the trust securities out
of funds from the property account. The guarantee trustee will hold the
guarantee for the benefit of the holders of the capital securities. We will pay
all fees and expenses related to the trust and the offering of the capital
securities, including the fees and expenses of the trustees.
DESCRIPTION OF THE PREFERRED SECURITIES
The following is a summary of the material terms and provisions of the
preferred securities. This summary is not complete and is subject to, and
qualified in its entirety by reference to, the amended and restated trust
agreement among CB&T, as depositor, Wilmington Trust Company, as property
trustee, the administrative trustees of the trust, and the holders from time to
time of undivided beneficial interests in the assets of the trust, and the Trust
Indenture Act. We have filed the form of the trust agreement as an exhibit to
the registration statement of which this prospectus is a part. Unless we
indicate otherwise, all references to CB&T, us or we appearing under this
caption "Description of the Preferred Securities" and under the caption
"Description of the Junior Subordinated Debentures" mean CB&T Holding
Corporation excluding its consolidated subsidiaries.
Distributions
The preferred securities represent preferred undivided beneficial interests
in the assets of the trust. The trust will pay preferential cumulative cash
distributions on the preferred securities at the annual rate of ___% of the
stated liquidation amount of $10. The trust will pay the dividends quarterly in
arrears on March 31, June 30, September 30 and December 31 of each year, to the
holders of the preferred securities on the relevant record dates. The record
date will be the 15th day of the month in which the relevant distribution
payment date occurs. distributions will accumulate from the date of the initial
issuance of the preferred securities and are cumulative. The first distribution
payment date for the preferred securities will be ______ __, 1999. The trust
will compute the amount of distributions payable for any period on the basis of
a 360-day year of twelve thirty-day months. If distributions on the preferred
securities are payable on a date that is not a business day, the trust will pay
such distributions on the next day that is a business day. The trust will not
pay any additional distributions or other payment as a result of the delay. If,
however, that business day is in the next calendar year, the trust will make
such payment on the immediately preceding business day. That payment will have
the same force and effect as if it were made on the date the payment was
originally payable (each date on which distributions are payable in accordance
with the foregoing, a "distribution date"). A "business day" means any day other
than a Saturday or a Sunday, or a day on which banking institutions in the
cities of New York or New Orleans are authorized or required by law or executive
order to remain closed or a day on which the principal corporate trust office of
the property trustee or the trustee under the indenture between us and
Wilmington Trust Company, as trustee, is closed for business.
If we are not in default, we may, under the indenture, defer the payment of
interest on the junior subordinated debentures at any time or from time to time
for a period not exceeding 20 consecutive
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quarters with respect to each deferral period (each, an "extension period"). No
extension period may extend beyond the stated maturity date of the junior
subordinated debentures. As a result of any deferral of interest, the trust will
defer quarterly distributions on the preferred securities during the extension
period. Distributions to which holders of the preferred securities are entitled
will accumulate additional distributions at the rate per annum of ___%,
compounded quarterly from the relevant payment date for such distributions. The
term "distributions" as used in this prospectus includes any such additional
distributions.
The terms of the indenture limit our ability to make certain payments
during any extension period. During an extension period, we may not make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem, any debt securities that rank equal in priority with or junior in right
of payment to the junior subordinated debentures. We also may not make any
guarantee payments under any guarantee by us of the debt securities of any of
our subsidiaries if such guarantee ranks equal in priority with or junior in
right of payment to the junior subordinated debentures other than payments
pursuant to the preferred securities guarantee agreement. Finally, we may not
declare or pay any dividends or distributions on, or redeem, purchase, acquire
or make a liquidation payment relating to, any of our capital stock other than:
. the reclassification of any class of our capital stock into another
class of capital stock;
. dividends or distributions payable in shares of our common stock;
. any declaration of a stock dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of
shares under any such plan in the future or the redemption or
repurchase of any such rights pursuant thereto;
. payments under the guarantee; and
. purchases of shares of common stock related to the issuance of shares
of common stock or rights under any of our benefit plans for our
directors, officers or employees.
Additionally, during any extension period, we may not redeem, purchase or
acquire less than all the outstanding junior subordinated debentures or any of
the preferred securities.
During any extension period, interest would continue to accrue and holders
of the preferred securities would be required to accrue interest income for
United States federal income tax purposes, even though such holders would not
receive current cash distributions with which to pay tax, if any, arising with
respect to such accrued interest income. See "Federal Income Tax Consequences -
Interest Income and Original Issue Discount."
Before the termination of any extension period, we may further defer the
payment of interest on the junior subordinated debentures if no extension period
together with all previous and further extensions exceeds twenty consecutive
quarters or extends beyond the stated maturity date of the junior subordinated
debentures. Upon the termination of any such extension period and the payment of
all accrued and unpaid interest (together with interest thereon at the rate of
____%, compounded quarterly, to the extent permitted by law), we may begin a new
extension period. There is no limitation on the number of times that we may
begin an extension period. See "Description of the Junior Subordinated
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Debentures - Right to Defer Interest Payment Obligation" and "Federal Income Tax
Consequences -Interest Income and Original Issue Discount."
The trust will invest the proceeds from the issuance and sale of its common
securities and the preferred securities in the junior subordinated debentures.
The revenue available for distribution to holders of the trust's preferred
securities will be limited to payments under the junior subordinated debentures.
See "Description of the Junior Subordinated Debentures." If we do not make
interest payments on the junior subordinated debentures, the property trustee
will not have funds available to pay distributions on the preferred securities.
We will guarantee the payment of distributions on a limited basis as described
in this prospectus under "Description of the Guarantee."
We have no current intention of deferring payments of interest on the
junior subordinated debentures.
Reserve for Interest Payments
In order to insure that the trust has sufficient funds to make interest
payments on the preferred securities, we have agreed in the indenture that we
will not declare or pay dividends on, or purchase, redeem or acquire for value
any shares of our common stock, return any capital to holders of our common
stock, or make any distribution of assets to the holders of our common stock,
unless we retain cash, cash equivalents or marketable securities at CB&T in an
amount sufficient to pay the next eight consecutive quarterly interest payments
on the junior subordinated debentures.
Subordination of the Trust's Common Securities
The trust will pay distributions on, and the redemption price of, its
common securities and the preferred securities, as applicable, pro rata based on
their liquidation amount. However, in general, if we are in default under the
indenture on any distribution date or redemption date, the trust will not make
any distribution on, or pay the redemption price of, any of its common
securities, or make any other payment on account of the redemption, liquidation
or other acquisition of its common securities. In the event of such a default,
the trust may make such payments only under limited circumstances. In the case
of payment of distributions, the trust must make payment in full in cash of all
accumulated and unpaid distributions on all of the outstanding preferred
securities for all distribution periods terminating on or prior to the relevant
date. In the case of payment of the redemption price, the trust must pay the
full amount of the redemption price on all of the outstanding preferred
securities then called for redemption. In addition, the property trustee must
first apply all available funds to the payment in full in cash of all
distributions on, or redemption price of, the preferred securities then due and
payable.
If an event of default occurs under the trust agreement as a result of an
event of default under the indenture, we, as holder of the trust's common
securities, will be deemed to have waived any right to act with respect to any
such event of default under the trust agreement until the effect of all such
defaults with respect to the preferred securities are cured, waived or otherwise
eliminated. Until all such events of default under the trust agreement are
cured, waived or otherwise eliminated, the property trustee will act solely on
behalf of the holders of the preferred securities and not on behalf of us as
holder of the trust's common securities, and only the holders of the preferred
securities will be able to direct the property trustee to act on their behalf.
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Redemption
The preferred securities are subject to mandatory redemption, in whole or
in part, upon repayment of the junior subordinated debentures at their stated
maturity date or earlier redemption as provided in the indenture. The property
trustee will apply the proceeds from the repayment or redemption to redeem
preferred securities and common securities with a liquidation value equal to the
principal amount of the junior subordinated debentures so redeemed. The property
trustee will give not less than thirty nor more than sixty days' notice before
the date fixed for repayment or redemption. The property trustee will redeem the
preferred securities at a redemption price equal to the aggregate liquidation
amount of the preferred securities plus accumulated and unpaid distributions
thereon (the "redemption price") to the date of redemption (the "redemption
date"). For a description of the stated maturity and redemption provisions of
the junior subordinated debentures see "Description of the Junior Subordinated
Debentures - General" and "- Redemption or Exchange."
We may redeem the junior subordinated debentures before maturity on or
after _____ __, 2004, in whole at any time, or in part from time to time. As a
result, we can cause a mandatory redemption of an equivalent liquidation value
of the preferred securities. Any time that a tax event, an investment company
event or a capital treatment event occurs and continues, we may redeem the
junior subordinated debentures in whole but not in part. As a result, we can
cause a mandatory redemption of the preferred securities in whole but not in
part. Any redemption before the stated maturity date of the junior subordinated
debentures will be subject to prior regulatory approval, if then required, under
applicable capital guidelines or regulatory policies. See "Description of the
Junior Subordinated Debentures - Redemption or Exchange."
Redemption Procedures
The trust will redeem preferred securities at the redemption price by using
proceeds from the contemporaneous redemption of a liquidation value equal to the
principal amount of the junior subordinated debentures. The trust will redeem
the preferred securities and pay the redemption price on each redemption date
only to the extent that the trust has funds on hand available for the payment of
the redemption price.
If the trust gives a notice of redemption relating to the preferred
securities, then, by 10:00 a.m., New York City time, on the redemption date, the
property trustee will deposit irrevocably with Depository Trust Company funds
sufficient to pay the applicable redemption price. The property trustee will
also give DTC irrevocable instructions and authority to pay the redemption price
to holders when the holders surrender their certificates evidencing the
preferred securities. Despite any redemption, the trust will make distributions
payable on or before the redemption date for the preferred securities being
redeemed to recordholders of the preferred securities on the relevant record
dates. If the trust has given a notice of redemption and deposited funds, then,
upon the date of such deposit, all rights of the holders of preferred securities
being redeemed will terminate, except for their right to receive the redemption
price without interest. In addition, upon the date of such deposit, such
preferred securities will cease to be outstanding.
If any date fixed for redemption of the preferred securities is not a
business day, the trust will pay the redemption price on the next day which is a
business day. The trust will not pay any interest or other payment as a result
of such delay. If that business day falls in the next calendar year, the trust
will
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make the payment on the immediately preceding business day. If either the trust
or CB&T improperly withholds or refuses to pay the redemption price on the
preferred securities being redeemed, under the guarantee, the distributions on
the preferred securities will continue to accrue. These distributions will
accrue at the then applicable rate, from the redemption date originally
established by the trust for such preferred securities to the date such
redemption price is actually paid. See "Description of the Guarantee." Under
such circumstances, the actual payment date will be the date fixed for
redemption for purposes of calculating the redemption price.
Subject to applicable law, we or our subsidiaries may at any time and from
time to time purchase outstanding preferred securities by private agreement,
tender offer or in the open market.
Payment of the redemption price on the preferred securities and any
distribution of the junior subordinated debentures to holders of the preferred
securities will be made to the recordholders as they appear on the register for
the preferred securities on the relevant record date. The relevant record date
will be one business day before the relevant redemption date. However, in the
event the preferred securities do not remain in book entry form, the relevant
record date will be the date at least 15 days before the redemption date or
liquidation date, as applicable.
If the trust redeems less than all of its common securities and the
preferred securities on a redemption date, then the aggregate liquidation amount
of the trust's common securities and preferred securities to be redeemed will be
allocated pro rata to its common securities and the preferred securities based
upon the relative liquidation amounts of such classes. The property trustee will
select, on a pro rata basis in accordance with the trust agreement, the
particular preferred securities to be redeemed within 60 days of the redemption
date, or, if the preferred securities are then held in the form of a global
preferred security, in accordance with DTC's customary procedures. The property
trustee will promptly notify the trust registrar in writing of the preferred
securities selected for redemption and, in the case of any preferred securities
selected for partial redemption, the liquidation amount to be redeemed. For all
purposes of the trust agreement, unless the context otherwise requires, all
provisions relating to the redemption of the preferred securities will relate,
in the case of the preferred securities redeemed or to be redeemed only in part,
to the portion of the aggregate liquidation amount of the preferred securities
which has been or is to be redeemed.
The trustee will mail notice of any redemption at least thirty but not more
than sixty days before the redemption date to each holder of the preferred
securities to be redeemed at its registered address. Unless we default in
payment of the redemption price on the junior subordinated debentures, interest
will cease to accrue on and after the redemption date, on the junior
subordinated debentures or portions of those debentures called for redemption.
Liquidation of the Trust and Distribution of the Junior Subordinated Debentures
to Holders
We may at any time dissolve the trust. After satisfaction of the
liabilities of creditors of the trust as provided by law, we may cause junior
subordinated debentures to be distributed to the holders of the preferred
securities and the trust's common securities in exchange for those securities
upon liquidation of the trust.
After the liquidation date for any distribution of the junior subordinated
debentures for preferred securities, those preferred securities will no longer
be deemed to be outstanding. DTC or its nominee, as
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the registered holder of preferred securities, will receive a registered global
certificate or certificates representing the junior subordinated debentures to
be delivered upon the distribution with respect to preferred securities held by
DTC or its nominee. Any certificates representing the preferred securities not
held by DTC or its nominee will be deemed to represent junior subordinated
debentures having a principal amount equal to the stated liquidation amount of
the preferred securities and bearing accrued and unpaid interest in an amount
equal to the accumulated and unpaid distributions on such series of the
preferred securities until such certificates are presented to the administrative
trustees or their agent for transfer or reissuance.
Under United States federal income tax law and interpretations, a
distribution of the junior subordinated debentures should not be a taxable event
to holders of the preferred securities. However, if there is a change in law, a
change in legal interpretation, a tax event or other circumstances, the
distribution could be a taxable event to holders of the preferred securities.
See "Federal Income Tax Consequences - Distribution of the Junior Subordinated
Debentures to Holders of the Preferred Securities."
Liquidation Distribution Upon Dissolution
Pursuant to the trust agreement, the trust will automatically dissolve at
the end of its term. The trust will also dissolve if any of the following events
occurs:
. the entry of an order for the dissolution of the trust by a court of
competent jurisdiction;
. certain events of bankruptcy, dissolution or liquidation of CB&T,
subject in certain instances to certain such events remaining in
effect for a period of ninety consecutive days;
. the distribution of the junior subordinated debentures to the holders
of its preferred securities, if we, as depositor, have given written
direction to the property trustee to dissolve the trust (which
direction is optional and wholly within our discretion, as depositor);
and
. redemption of all of the preferred securities as described under
"- Redemption."
If an early dissolution occurs as described in one of the first three
clauses listed above, the trustees will liquidate the trust as quickly as
possible by first satisfying the liabilities to creditors of the trust, if any,
as provided by law, and then by distributing to the holders of the preferred
securities an equivalent liquidation value of the junior subordinated
debentures. If the administrative trustees determine this distribution is not
practical, after satisfaction of liabilities to creditors of the trust, if any,
as provided by law, holders of the preferred securities will receive out of the
assets of the trust available for distribution to holders, an amount equal to
the liquidation amount plus accrued and unpaid distributions to the date of
payment (such amount being the "liquidation distribution"). If the liquidation
distribution can be paid only in part because the trust has insufficient assets
available to pay the liquidation distribution in full, then the trust will pay
the amounts due on a pro rata basis. In no event shall the property trustee be
liable for any deficit in a liquidation distribution. We, as the holder of the
trust's common securities, will receive distributions upon any such liquidation
pro rata with the holders
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of the preferred securities. However, if we are in default under the indenture,
the preferred securities will have a priority over the trust's common securities
with respect to any such distributions.
Events of Default; Notice
Any one of the following events constitutes an "event of default" under the
trust agreement with respect to the preferred securities and the trust's common
securities issued under the trust agreement. Each event constitutes an event of
default regardless of the reason for the event of default and whether it is
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body:
. the occurrence of an event of default under the indenture (see
"Description of the Junior Subordinated Debentures - Debenture Events
of Default"); or
. default in the payment of any distribution when it becomes due and
payable, and the continuation of the default for a period of 30 days;
or
. default in the payment of any redemption price when it becomes due and
payable; or
. default in the performance, or breach, in any material respect, of any
covenant or warranty of any trustee under the trust agreement (other
than a covenant or warranty a default in the performance of which or
the breach of which is dealt with in the clauses listed above), and
continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
defaulting trustee or trustees by the holders of at least 25% in
aggregate liquidation amount of the outstanding preferred securities,
a written notice specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice of Default"
under the trust agreement; or
. the occurrence of certain events of bankruptcy or insolvency with
respect to the property trustee and the failure by us to appoint a
successor property trustee within 60 days of such event of bankruptcy
or insolvency.
Within 90 days after the occurrence of any event of default actually known
to the property trustee, the property trustee will send notice of the event of
default to the holders of the preferred securities, the administrative trustees
and us, as depositor, unless the event of default has been cured or waived.
CB&T, as depositor, and the administrative trustees are required to file
annually with the property trustee a certificate stating whether or not they are
in compliance with all the conditions and covenants applicable to them under the
trust agreement.
If an event of default under the indenture has occurred and is continuing,
the preferred securities will have a preference over the trust's common
securities as described above. See "- Subordination of the Trust's Common
Securities." The holders of the preferred securities cannot accelerate the
payment of the preferred securities due to an event of default. If the event of
default is due to an event of default under the indenture, a holder of preferred
securities may institute a legal proceeding directly against us.
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Removal of the Trust Trustees
Unless an event of default under the indenture has occurred and is
continuing, the holder of the trust's common securities may remove any trustee
under the trust agreement at any time. If an event of default under the
indenture has occurred and is continuing, the holders of a majority in
liquidation amount of the outstanding preferred securities may remove the
property trustee at such time. The holders of the preferred securities will not
have the right to vote to appoint, remove or replace the administrative
trustees. No resignation or removal of any trustee under the trust agreement and
no appointment of a successor trustee will be effective until the successor
trustee accepts its appointment in accordance with the provisions of the trust
agreement.
Co-Trustees and Separate Property Trustee
Unless an event of default has occurred and is continuing, for the purpose
of meeting the legal requirements of the Trust Indenture Act, if applicable, or
of any jurisdiction where part of the property and assets of the trust are
located, we, as the holder of the trust's common securities, may appoint one or
more persons either to act as a co-trustee, jointly with the property trustee,
of all or any part of that trust property, or to act as separate trustee of any
of that property. The co-trustee or separate trustee will have the powers
described in the instrument of appointment. We may vest in the person or persons
in such capacity any property, title, right or power deemed necessary or
desirable, subject to the provisions of the trust agreement. If an event of
default under the indenture has occurred and is continuing, the property trustee
alone may make the appointment.
Merger or Consolidation of the Property Trustee
Provided such entity shall be otherwise qualified and eligible, the
successor of the property trustee under the trust agreement will be:
. Any entity into which the trustee that is not a natural person may be
merged or converted,
. Any entity with which the trustee may be consolidated,
. Any entity resulting from any merger, conversion or consolidation to
which the trustee will be a party, or
. Any entity succeeding to all or substantially all the corporate trust
business of the trustee.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The trust may not merge with or into, consolidate, amalgamate, be replaced
by, convey, transfer or lease its properties and assets substantially as an
entirety to any entity or other person, except as described below or as
otherwise described in the trust agreement. The trust may, at our request, with
the consent of the administrative trustees and without the consent of the
holders of the preferred securities or the property trustee, merge with or into,
consolidate, amalgamate, be replaced by, convey, transfer or
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lease its properties and assets substantially as an entirety to, a trust
organized as such under the laws of any state if certain conditions are met.
These conditions are:
. the successor entity either (a) expressly assumes all of the
obligations of the trust with respect to the preferred securities or
(b) substitutes for the preferred securities other securities having
substantially the same terms as the preferred securities (the
"successor securities") so long as the successor securities rank the
same as the preferred securities in priority with respect to
distributions and payments upon liquidation, redemption and otherwise,
. we expressly appoint a trustee of the successor entity possessing the
same powers and duties as the property trustee as the holder of the
junior subordinated debentures,
. the successor securities are registered or listed, or any successor
securities will be registered or listed upon notification of issuance,
on any national securities exchange or other organization on which the
preferred securities are then registered or listed, if any,
. such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the preferred securities (including
any successor securities) to be downgraded by any nationally
recognized statistical rating organization,
. the merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the preferred securities (including
any successor securities) in any material respect,
. the successor entity has a purpose substantially identical to that of
the trust,
. before the transaction, we receive an opinion from independent counsel
experienced in such matters to the effect that (a) the transaction
does not adversely affect the rights, preferences and privileges of
the holders of the preferred securities (including any successor
securities) in any material respect (b) following the transaction,
neither the trust nor such successor entity will be required to
register as an investment company under the Investment Company Act of
1940, and (c) following the transaction, the trust will continue to be
treated as a grantor trust for United States federal income tax
purposes, and
. we or any permitted successor or assignee owns all of the common
securities or its equivalent of the successor entity and guarantees
the obligations of the successor entity under the successor securities
at least to the extent provided by the guarantee.
Even if these conditions are met, if the consolidation, amalgamation,
merger, replacement, conveyance, transfer or lease would cause the trust or the
successor entity to be classified as other than a grantor trust for United
States federal income tax purposes, the trust will not enter into such
transaction without the consent of holders of 100% in liquidation amount of the
preferred securities.
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Voting Rights; Amendment of the Trust Agreement
Except as provided below and under "Description of the Guarantee -
Amendments and Assignment" and as otherwise required by law and the trust
agreement, the holders of the preferred securities will have no voting rights.
The trust agreement may be amended from time to time by us, the property
trustee and the administrative trustees, without the consent of the holders of
the preferred securities:
. with respect to the acceptance of appointment of a successor trustee,
. to cure any ambiguity, correct or supplement any provisions in the
trust agreement that may be inconsistent with any other provision or
to make any other provisions with respect to matters or questions
arising under the trust agreement, which will not be inconsistent with
the other provisions of the trust agreement, or
. to modify, eliminate or add to any provisions of the trust agreement
to the extent necessary to ensure that the trust will be classified
for United States federal income tax purposes as a grantor trust at
all times that the preferred securities are outstanding or to ensure
that the trust will not be required to register as an "investment
company" under the Investment Company Act.
If we, the property trustee and the administrative trustees amend the trust
agreement, except with respect to the acceptance of appointment of a successor
trustee, the action may not adversely affect in any material respect the
interests of any holder of the preferred securities. Any amendments of the trust
agreement described above will become effective when notice of the amendment is
given to the holders of the preferred securities.
The trust agreement may be amended by the trustees and CB&T with:
. the consent of holders representing not less than a majority (based
upon liquidation amounts) of the outstanding preferred securities, and
. receipt by the trust trustees of an opinion of counsel to the effect
that such amendment or the exercise of any power granted to the trust
trustees in accordance with such amendment will not affect the trust's
status as a grantor trust for United States federal income tax
purposes or the trust's exemption from status as an "investment
company" under the Investment Company Act.
Some of the provisions in the trust agreement may not be amended without
the consent of each affected holder of the preferred securities. Consent is
required to amend the trust agreement to:
. change the amount or timing of any distribution on the preferred
securities or otherwise adversely affect the amount of any
distribution required to be made in respect of the preferred
securities as of a specified date, and
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. restrict the right of a holder of the preferred securities to
institute suit for the enforcement of any such payment on or after
such date.
If the junior subordinated debentures are held by the property trustee, the
trustees will not take any of the following actions without obtaining the prior
approval of the holders of a majority in aggregate liquidation amount of all
outstanding preferred securities:
. direct the time, method and place of conducting any proceeding for any
remedy available to the trustee under the indenture or executing any
trust or power conferred on the property trustee with respect to the
junior subordinated debentures,
. waive any past default that is waivable under the indenture,
. exercise any right to rescind or annul a declaration that the
principal of all the junior subordinated debentures will be due and
payable, or
. consent to any amendment, modification or termination of the indenture
or the junior subordinated debentures, where such consent is required.
If a consent under the indenture would require the consent of each holder
of the junior subordinated debentures affected by the actions described above,
the property trustee will not give that consent without the prior consent of
each holder of the preferred securities. The trustees will not revoke any action
previously authorized or approved by a vote of the holders of the preferred
securities except by subsequent vote of the holders of the preferred securities.
The property trustee will notify each holder of the preferred securities of any
notice of default with respect to the junior subordinated debentures. In
addition to obtaining the approval of the holders of the preferred securities,
before taking any of the foregoing actions, the trustees will obtain an opinion
of counsel experienced in such matters to the effect that the trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of the preferred securities may be given
at a meeting of holders of the preferred securities called for such purpose or
by written consent. The property trustee will cause a notice of any meeting at
which holders of the preferred securities are entitled to vote to be given to
each holder of record of the preferred securities in the manner set forth in the
trust agreement.
No vote or consent of the holders of the preferred securities will be
required for the trust to redeem and cancel the preferred securities in
accordance with the trust agreement.
Notwithstanding that holders of the preferred securities are entitled to
vote or consent under any of the circumstances described above, any of the
preferred securities that are owned by us, the trustees or any affiliate of us
or the trustees will, for purposes of such vote or consent, be treated as if
they were not outstanding.
Liquidation Value
The amount payable on the preferred securities in the event of any
liquidation of the trust is $10 per preferred security plus accumulated and
unpaid distributions. This amount may be paid in the form of
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a distribution in junior subordinated debentures, subject to certain exceptions.
See "-Liquidation Distribution Upon Dissolution."
Expenses and Taxes
In the indenture, we, as borrower, have agreed to pay all debts and other
obligations (other than with respect to the preferred securities) and all costs
and expenses of the trust including costs and expenses relating to the
organization of the trust, the fees and expenses of the trustees under the trust
agreement and the costs and expenses relating to the operation of the trust. We
have also agreed to pay any and all taxes and all costs and expenses with
respect thereto (other than United States withholding taxes) to which the trust
might become subject. These obligations of CB&T under the indenture are for the
benefit of, and will be enforceable by, any person to whom any such debts,
obligations, costs, expenses and taxes are owed (a "creditor") whether or not
that creditor has received notice thereof. Any creditor may enforce our
obligations directly against us. We have irrevocably waived any right or remedy
to require that a creditor take any action against the trust or any other person
before proceeding against us. We have also agreed in the indenture to execute
any additional agreements necessary or desirable to give full effect to the
foregoing.
Book Entry, Delivery and Form
The trust will issue the preferred securities in the form of one or more
fully registered global securities. The global securities will be deposited
with, or on behalf of, DTC and registered in the name of DTC's nominee. Unless
and until a global security is exchangeable in whole or in part for the
preferred securities in definitive form, the global security may not be
transferred except as a whole by:
. DTC to a nominee of DTC;
. a nominee of DTC to DTC or another nominee of DTC; or
. DTC or any such nominee to a successor of such depository or a nominee
of such successor.
Ownership of beneficial interests in a global security will be limited to
persons that have accounts with DTC or its nominee ("participants") or persons
that may hold interests through participants. We expect that, when a global
security is issued, DTC will credit, on its book-entry registration and transfer
system, the participants' accounts with their respective principal amounts of
the preferred securities represented by the global security. Ownership of
beneficial interests in the global security will be shown on, and the transfer
of such ownership interests will be effected only through, records maintained by
DTC (with respect to interests of participants) and on the records of
participants (with respect to interests of persons held through participants).
Beneficial owners will not receive written confirmation from DTC of their
purchase. However, we expect the beneficial owner to receive written
confirmations from the participants through which the beneficial owner entered
into the transaction. Transfers of ownership interests will be accomplished by
entries on the books of participants acting on behalf of the beneficial owners.
So long as DTC, or its nominee, is the registered owner of a global
security, DTC or such nominee, as the case may be, will be considered the sole
owner or holder of the preferred securities
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represented by the global security for all purposes under the indenture. Except
as provided below, owners of beneficial interests in a global security will not
be entitled to receive physical delivery of the preferred securities in
certificated form and will not be considered the owners or holders of the
preferred securities under the indenture. Accordingly, to exercise any rights of
a holder of preferred securities under the indenture, each person owning a
beneficial interest in such a global security must rely on the procedures of DTC
and, if such person is not a participant, on the procedures of the participant
through which such person owns its interest. We understand that, under DTC's
existing practices, if we request any action of holders, or an owner of a
beneficial interest in such a global security desires to take any action which a
holder is entitled to take under the indenture, DTC would authorize the
participants holding the relevant beneficial interests to take such action. In
turn, those participants would authorize beneficial owners owning through the
participants to take the action or would otherwise act upon the instructions of
beneficial owners owning through them. Redemption notices will also be sent to
DTC. If less than all of the preferred securities are being redeemed, CB&T
understands that it is DTC's existing practice to determine by lot the amount of
the interest of each participant to be redeemed.
The trust will make distributions on the preferred securities registered in
the name of DTC or its nominee to DTC or its nominee, as the case may be, as the
registered owner of the global security representing such preferred securities.
None of CB&T, the trustees, any paying agent or any other agent of CB&T or the
trustees will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests in the
global security for such preferred securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests. DTC will
be responsible for the disbursements of distributions to participants. DTC's
practice is to credit participants' accounts on a payable date in accordance
with their respective holdings shown on DTC's records unless DTC believes that
it will not receive payment on the payable date. Standing instructions and
customary practices will govern payments by participants to beneficial owners,
as is the case with securities held for the accounts of customers in bearer form
or registered in "street name." The participants will be responsible for such
payments, not DTC, CB&T, the trustees, the paying agent or any other agent of
CB&T, subject to any statutory or regulatory requirements as may be in effect
from time to time.
DTC may discontinue providing its services as securities depository with
respect to the preferred securities at any time by giving reasonable notice to
CB&T or the trustees. If DTC notifies us or the trustees that it is unwilling to
continue as depository, or if it is unable to continue or ceases to be a
clearing agency registered under the Securities Exchange Act of 1934 and a
successor depository is not appointed by us within ninety days after receiving
such notice or becoming aware that DTC is no longer so registered, we will issue
the preferred securities in definitive form upon registration of transfer of, or
in exchange for, a global security. In addition, the trust may, at any time and
in its sole discretion, determine not to have the preferred securities
represented by one or more global securities. Under these and certain other
circumstances, we will issue preferred securities in definitive form in exchange
for all of the global securities representing such preferred securities.
DTC has advised us and the trust of the following information. DTC is a
limited purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Securities and Exchange Act of
1934. DTC was created to hold securities for its participants and to facilitate
the clearance and settlement of securities transactions between participants
through electronic book entry changes to accounts of its
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participants. The use of electronic book entry changes eliminates the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include other
organizations. Some of the participants (or their representatives), together
with other entities, own DTC. Indirect access to the DTC system is available to
others such as banks, brokers, dealers and trust companies that clear through,
or maintain a custodial relationship with, a participant, either directly or
indirectly.
The information in this section concerning DTC and book-entry systems has
been obtained from sources that CB&T and the trust believe to be reliable.
However, neither CB&T nor the trust take responsibility for the accuracy of this
information.
Payment and Paying Agency
DTC will credit payments in respect of the preferred securities to the
relevant accounts at DTC on the applicable distribution dates. If the preferred
securities are not held by DTC, the paying agent will make such payments by
check mailed to the address of the holder entitled to such payments at the
address appearing on the securities register for the preferred securities and
the trust's common securities. The initial paying agent will be the property
trustee and any co-paying agent chosen by the property trustee and acceptable to
the administrative trustees. The paying agent may resign as paying agent upon
thirty days' written notice to the trust trustees. If the property trustee
is no longer the paying agent, the property trustee will appoint a successor to
act as paying agent. The successor must be a bank or trust company reasonably
acceptable to the administrative trustees.
Registrar and Transfer Agent
The property trustee will act as the registrar and the transfer agent for
the preferred securities. Registration of transfers of preferred securities will
be effected without charge by or on behalf of the trust, except for the payment
of any tax or other governmental charges that may be imposed in connection with
any transfer or exchange. Upon any redemption, the trust will not be required to
issue, register the transfer of, or exchange any preferred securities during a
period beginning at the opening of business fifteen days before the date of
mailing of a notice of redemption of any preferred securities called for
redemption and ending at the close of business on the day of such mailing. The
trust will also not be required to register the transfer of or exchange any
preferred securities selected for redemption, in whole or in part, except the
unredeemed portion of any such preferred securities being redeemed in part.
Information Concerning the Property Trustee
Other than upon the occurrence and during the continuance of an event of
default, the property trustee undertakes to perform only such duties as are
specifically set forth in the trust agreement. After an event of default, the
property trustee must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the property trustee is under no obligation to exercise any
of the powers vested in it by the trust agreement at the request of any holder
of preferred securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby. If no event of
default has occurred and is continuing and the property trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
the trust agreement, or is unsure of the application of any provision of the
trust agreement, and the matter is not one on which holders of preferred
securities are entitled under the trust
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agreement to vote, then the property trustee will take such action as it deems
advisable and in the best interests of the holders of the preferred securities.
The property trustee will have no liability for such action except for its own
negligence or willful misconduct.
Miscellaneous
The administrative trustees are to conduct the affairs of and to operate
the trust in such a way that the trust will not be deemed to be an "investment
company" required to be registered under the Investment Company Act or
classified as an association taxable as a corporation for United States federal
income tax purposes and so that the junior subordinated debentures will be
treated as indebtedness of CB&T for United States federal income tax purposes.
We and the administrative trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of the trust or the
trust agreement, that we and the administrative trustees determine in their
discretion to be necessary or desirable for such purposes.
Holders of the preferred securities have no preemptive or similar rights.
The trust agreement and the preferred securities will be governed by, and
construed in accordance with, the laws of the State of Delaware.
DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
We are to issue the junior subordinated debentures under the indenture. The
indenture will be qualified as an indenture under the Trust Indenture Act. This
summary of material terms and provisions of the junior subordinated debentures
and the indenture is not complete and is subject to, and is qualified in its
entirety by reference to, the indenture, and to the Trust Indenture Act. We have
filed the form of the indenture as an exhibit to the registration statement of
which this prospectus forms a part.
General
At the same time the trust issues the preferred securities, the trust will
invest the proceeds from their sale, along with the consideration paid by us for
the trust's common securities, in the junior subordinated debentures. The junior
subordinated debentures will bear interest at the annual rate of ____%, payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year (each, an "interest payment date"), commencing _________ __, 1999. We will
pay interest to the person in whose name each junior subordinated debenture is
registered, subject to certain exceptions, at the close of business on the
business day immediately prior to the interest payment date. It is anticipated
that, until the liquidation, if any, of the trust, the property trustee will
hold the junior subordinated debentures in trust for the benefit of the holders
of the preferred securities. We will compute the amount of interest payable for
any period on the basis of a 360-day year of twelve thirty-day months. If
interest on the junior subordinated debentures is payable on a date that is not
a business day, we will pay that interest on next day that is a business day. We
will not pay any additional interest or other payment as a result of the delay.
If that business day is in the next calendar year, we will make that payment on
the immediately preceding business day. This payment will have the same force
and effect as if it were made on the date the payment was originally payable.
Accrued interest that is not paid on the applicable interest payment date will
bear additional interest at the rate per annum of ____% thereof, compounded
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quarterly from the relevant interest payment date. The term "interest" as used
in this section includes quarterly interest payments, interest on quarterly
interest payments not paid on the applicable interest payment date and
additional interest, as applicable.
The junior subordinated debentures have a stated maturity date of ________
__, 2029. The junior subordinated debentures will not be subject to any sinking
fund.
The junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to all of our indebtedness senior in
right of payment to them. Because we are a holding company, our right to
participate in any distribution of assets of any subsidiary, including Crescent
Bank, upon such subsidiary's liquidation or reorganization or otherwise, is
subject to the prior claims of creditors of that subsidiary, except to the
extent that we may be recognized as a creditor of that subsidiary. Accordingly,
the junior subordinated debentures will be effectively subordinated to all
existing and future liabilities of our subsidiaries, and holders of the junior
subordinated debentures should look only to our assets for payments on the
junior subordinated debentures. The indenture does not limit our ability to
incur or issue other secured or unsecured debt, including indebtedness senior in
right of payment to the junior subordinated debentures, whether under the
indenture or any existing or other indenture that we may enter into in the
future or otherwise.
Reserve for Interest Payments
We have agreed in the indenture that we will not declare or pay dividends
on, or purchase, redeem or acquire for value any shares of our common stock,
return any capital to holders of our common stock, or make any distribution of
assets to the holders of our common stock, unless we retain cash, cash
equivalents or marketable securities at CB&T in an amount sufficient to pay the
next eight consecutive quarterly interest payments on the junior subordinated
debentures.
Right to Defer Interest Payment Obligation
If we are not in default under the indenture, we may, under the indenture
at any time or from time to time during the term of the junior subordinated
debentures, defer the payment of interest on the junior subordinated debentures
for a period not exceeding twenty consecutive quarters with respect to each
extension period. No extension period may extend beyond the stated maturity date
of the junior subordinated debentures. At the end of each extension period, we
must pay all interest then accrued and unpaid on the junior subordinated
debentures (together with interest on such unpaid interest at the annual rate of
____%, compounded quarterly from the relevant interest payment date, to the
extent permitted by applicable law, referred to herein as "compounded
interest"). During an extension period, interest would continue to accrue and
holders of the junior subordinated debentures would be required to accrue
interest income for United States federal income tax purposes even though such
holders would not receive current cash distributions with which to pay tax, if
any, arising with respect to such accrued interest income. See "Federal Income
Tax Consequences - Interest Income and Original Issue Discount."
During any extension period, we may not taken certain actions. We may not
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any of our debt securities that rank equal in priority with
or junior in right of payment to the junior subordinated debentures. We may not
make any guarantee payments with respect to any guarantee by us of the debt
securities of any of our subsidiaries if such guarantee ranks equal in priority
with or junior in right of payment to the junior
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subordinated debentures other than payments pursuant to the guarantee. We may
not declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of our capital stock
other than:
. the reclassification of any class of our capital stock into another
class of capital stock,
. dividends or distributions in shares of our common stock,
. any declaration of a dividend in connection with the implementation of
a shareholders' rights plan, or the issuance of shares under any such
plan in the future or the redemption or repurchase of any such rights
pursuant thereto,
. payments under the guarantee, and
. purchases of common shares related to the issuance of common shares or
rights under any of our benefit plans for our directors, officers or
employees.
Additionally, during any extension period, we will not redeem, purchase or
acquire less than all the outstanding junior subordinated debentures or any of
the preferred securities.
Before the termination of any extension period, we may further defer the
payment of interest on the junior subordinated debentures if no extension period
exceeds twenty consecutive quarters or extends beyond the stated maturity date
of the junior subordinated debentures. Upon the termination of any such
extension period and the payment of all compounded interest, we may begin a new
extension period subject to the above requirements. No interest will be due and
payable during an extension period, except at the end of such extension period.
We must give the property trustee, the administrative trustees and the trustee
under the indenture notice of its election to begin an extension period at least
one business day before the earlier of:
. the date interest on the junior subordinated debentures would have
been payable except for the election to begin such extension period,
or
. the date the administrative trustees are required to give notice of
the record date, or the date such distributions are payable, to the
American Stock Exchange or other applicable self-regulatory
organization or to holders of the preferred securities as of the
record date or the date such distributions are payable, but in any
event not less than one business day before such record date.
The trustee under the indenture will give notice of our election to begin a
new extension period to the holders of the preferred securities. There is no
limitation on the number of times that we may begin an extension period.
Additional Interest
If the trust or the property trustee is required to pay any additional
taxes, duties or other governmental charges as a result of a tax event, we will
pay such additional amounts on the junior
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subordinated debentures as required. The trust will not reduce the distributions
payable by it as a result of any such additional taxes, duties or other
governmental charges.
Redemption or Exchange
We may redeem the junior subordinated debentures before maturity on or
after _____ __, 2004, in whole at any time or in part from time to time, or at
any time in whole (but not in part) within ninety days following the occurrence
and continuation of a tax event, an investment company event or a capital
treatment event. In each case, the redemption price shall equal the accrued and
unpaid interest on the redeemed junior subordinated debentures to the date fixed
for redemption, plus 100% of the principal amount of such junior subordinated
debentures. Any redemption before the stated maturity date of the junior
subordinated debentures will be subject to prior regulatory approval, if then
required under applicable capital guidelines or regulatory policies.
We will mail notice of any redemption at least thirty but not more than
sixty days before the redemption date to each holder of the junior subordinated
debentures to be redeemed. We will mail notice to such holder's registered
address. Unless we default in payment of the redemption price, on and after the
redemption date interest ceases to accrue on the junior subordinated debentures
or portions thereof called for redemption.
"Additional interest" means the additional amounts necessary so that the
amount of distributions then due and payable by the trust on its outstanding
preferred securities and common securities shall not be reduced as a result of
any additional taxes, duties and other governmental charges to which the trust
has become subject as a result of a tax event.
"Investment company event" means the receipt by the trust of an opinion of
counsel to the effect that, as a result of a change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, the trust is or will
be considered an "investment company" that is required to be registered under
the Investment Company Act and that the change becomes effective on or after the
date of original issuance of the preferred securities.
"Capital treatment event" means the receipt by the trust of an opinion of
counsel to the effect that as a result of any amendment to, or change (including
any proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such proposed change, pronouncement, action or decision is
announced on or after the date of original issuance of the preferred securities,
there is more than an insubstantial risk that the preferred securities would not
constitute Tier 1 capital (or the then equivalent thereof) for purposes of the
capital adequacy guidelines of the Federal Reserve (or any successor regulatory
authority with jurisdiction over bank holding companies), or any capital
adequacy guidelines as then in effect and applicable to us.
"Tax event" means the receipt by the trust of an opinion of counsel to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or
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applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the preferred securities under the trust agreement, there is more than an
insubstantial risk that:
. the trust is, or will be within ninety days of the date of such
opinion, subject to United Stated federal income tax with respect to
income received or accrued on the junior subordinated debentures,
. interest payable by us on the junior subordinated debentures is not,
or within ninety days of the date of such opinion will not be,
deductible by us, in whole or in part, for United States federal
income tax purposes or
. the trust is, or will be within ninety days of the date of such
opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Opinion of counsel" means an opinion in writing of independent legal
counsel experienced in matters being opined upon, that is delivered to the trust
trustees.
Authentication
A junior subordinated debenture will not be valid until authenticated
manually by an authorized signatory of the trustee under the indenture, or by an
authenticating agent. That signature will be conclusive evidence that the junior
subordinated debenture has been duly authenticated and delivered under the
indenture and that the holder is entitled to the benefits of the indenture. Each
junior subordinated debenture will be dated the date of its authentication by
the trustee under the indenture.
Registration, Denomination and Transfer
The junior subordinated debentures will initially be registered in the name
of the property trustee, on behalf of the trust. If the junior subordinated
debentures are distributed to holders of preferred securities, we anticipate
that the depository arrangements for the junior subordinated debentures will be
substantially identical to those in effect for the preferred securities. See
"Description of the Preferred Securities - Book Entry, Delivery and Form."
Although DTC has agreed to the procedures described above, DTC is under no
obligation to perform or continue to perform such procedures. DTC may
discontinue such procedures at any time. If DTC is at any time unwilling or
unable to continue as depository and a successor depository is not appointed by
us within ninety days of receipt of notice from DTC, and in other circumstances,
including at our option, we will cause the junior subordinated debentures to be
issued in certificated form.
We will make payments on junior subordinated debentures represented by a
global security to Cede & Co., the nominee for DTC, as the registered holder of
the junior subordinated debentures, as described under "Description of the
Preferred Securities - Book Entry, Delivery and Form." If junior subordinated
debentures are issued in certificated form, principal and interest will be
payable, the transfer of the junior subordinated debentures will be registrable,
and junior subordinated debentures will be exchangeable for junior subordinated
debentures of other authorized denominations of a like aggregate principal
amount, at the corporate trust office of Wilmington Trust Company, the trustee
under
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the indenture, in Wilmington, Delaware or at the offices of any paying agent or
transfer agent appointed by us. However, at our option, payment of any interest
may be made:
. by check mailed to the address of the person entitled to such payment
that appears in the securities register for the junior subordinated
debentures; or
. by wire transfer of immediately available funds upon written request
to the trustee under the indenture no later than fifteen calendar days
before the date on which the interest is payable by a holder of $1
million or more in aggregate principal amount of the junior
subordinated debentures.
Junior subordinated debentures will be exchangeable for other junior
subordinated debentures of like tenor, of any authorized denominations and of a
like aggregate principal amount.
A holder of junior subordinated debentures may present for exchange as
provided above, and may present for registration of transfer (with the form of
transfer endorsed thereon, or a satisfactory written instrument of transfer,
duly executed), that holder's junior subordinated debentures. The holder of
junior subordinated debentures takes such action at the office of the securities
registrar appointed under the indenture or at the office of any transfer agent
designated by us without service charge and upon payment of any taxes and other
governmental charges as described in the indenture. We will appoint the trustee
under the indenture as securities registrar under the indenture. We may at any
time designate additional transfer agents with respect to the junior
subordinated debentures.
In the event of any redemption, neither us nor the trustee under the
indenture will be required to issue, register the transfer of, or exchange
junior subordinated debentures during a period beginning at the opening of
business fifteen days before the day of mailing of notice for redemption of the
junior subordinated debentures to be redeemed (if less than all are to be
redeemed) and ending at the close of business on the day of mailing of the
relevant notice of redemption. In addition, neither us nor the trustee under the
indenture will be required to transfer or exchange any junior subordinated
debentures selected for redemption, except, in the case of any junior
subordinated debentures being redeemed in part, any portion thereof not to be
redeemed.
Any monies deposited with the trustee under the indenture or any paying
agent, and any monies held by us in trust, for the payment of the principal of
(and premium, if any) or interest on any junior subordinated debenture that
remains unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable will, at our request, be repaid to us. After
that repayment, the holder of the junior subordinated debenture will look, as a
general unsecured creditor, only to us for payment of principal or interest.
Restrictions on Certain Payments
We will also covenant, as to the junior subordinated debentures, that we
will not take certain actions during any extension period or if we are in
default under the indenture or guarantee. We will not make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities that rank equal in priority with or junior in right of payment
to the junior subordinated debentures. We will not make any guarantee payments
with respect to any guarantee by us of the debt securities of any subsidiary of
ours if such guarantee ranks equal in priority with or junior in right of
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payment to the junior subordinated debentures other than payments pursuant to
the guarantee. We will not declare or pay any dividends or distributions on, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
our capital stock other than:
. the reclassification of any class of our capital stock into another
class of capital stock;
. dividends or distributions payable in shares of our common stock;
. any declaration of a dividend in connection with the implementation of
a shareholders' rights plan, or the issuance of shares under any such
plan in the future or the redemption or repurchase of any such rights
pursuant thereto;
. payments under the guarantee; and
. purchases of common shares related to the issuance of common shares or
rights under any of our benefit plans for our directors, officers or
employees.
Additionally, we will not redeem, purchase or acquire less than all the
outstanding junior subordinated debentures or any of the preferred securities if
at such time:
. there shall have occurred an event of default under the indenture,
. we shall be in default with respect to its obligations under the
guarantee relating to such preferred securities, or
. we shall have given notice of its selection of an extension period as
provided in the indenture with respect to the junior subordinated
debentures and shall not have rescinded such notice, or such extension
period, or any extension thereof, shall be continuing.
Modification of Indenture
From time to time we and the trustee under the indenture may, without the
consent of the holders of the junior subordinated debentures, amend, waive or
supplement the indenture for specified purposes. These purposes include, among
other things, curing ambiguities, defects or inconsistencies, changes that do
not materially adversely affect the interest of the holders of the junior
subordinated debentures and changes to qualify, or maintain the qualification
of, the indenture under the Trust Indenture Act. The indenture contains
provisions permitting us and the trustee under the indenture, with the consent
of the holders of not less than a majority in principal amount of the junior
subordinated debentures affected, to modify the indenture in a manner affecting
the rights of the holders of the junior subordinated debentures. However, no
such modification may, without the consent of the holder of each outstanding
junior subordinated debenture so affected,
. extend the stated maturity date of the junior subordinated debentures,
reduce the principal amount thereof or reduce the rate or extend the
time of payment of interest thereon, or
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. reduce the percentage of principal amount of the junior subordinated
debentures, the holders of which are required to consent to any such
modification of the indenture.
Debenture Events of Default
The indenture provides that any one or more of the following events with
respect to the junior subordinated debentures that has occurred and is
continuing constitutes a "debenture event of default":
. failure for thirty days to pay interest (including additional interest
or compounded interest, if any) on the junior subordinated debentures
when due (subject to the deferral of certain due dates in the case of
an extension period); or
. failure to pay any principal on the junior subordinated debentures
when due, whether at stated maturity, upon declaration of acceleration
of maturity or otherwise; or
. failure to observe or perform certain other covenants contained in the
indenture for ninety days after written notice to us from the trustee
under the indenture or the holders of at least 25% in aggregate
outstanding principal amount of the outstanding junior subordinated
debentures; or
. certain events in bankruptcy, insolvency or reorganization of us,
subject in certain instances to any such event remaining in effect for
a period of sixty consecutive days.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures may direct the time, method and place of
conducting any proceeding for any remedy available to the trustee under the
indenture. The trustee under the indenture or the holders of not less than 25%
in aggregate outstanding principal amount of the junior subordinated debentures
may declare the principal due and payable immediately upon a debenture event of
default. The holders of a majority in aggregate outstanding principal amount of
the junior subordinated debentures may annul such declaration and waive the
default if the default (other than the non-payment of the principal of the
junior subordinated debentures which has become due solely by such acceleration)
and all other debenture events of default have been cured and we have deposited
with the trustee under the indenture a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration.
We are required to file annually with the trustee under the indenture a
certificate as to whether or not we are in compliance with all the conditions
and covenants applicable to us under the indenture.
Enforcement of Certain Rights by Holders of the Preferred Securities
If a debenture event of default has occurred and is continuing due to our
failure to pay interest or principal on the junior subordinated debentures when
payable, a holder of the preferred securities may institute a legal proceeding
directly against us. That holder may institute such a proceeding to enforce
payment to the holder of the principal of or interest on such junior
subordinated debentures having a principal amount equal to the aggregate
liquidation amount of the preferred securities of such holder. We may not amend
the indenture to remove the right to bring such a legal proceeding without the
prior written consent of the holders of all of the preferred securities. We may
under the indenture set-off any
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payment made to such holder of the preferred securities by us in connection with
such a legal proceeding.
The holders of the preferred securities will not be able to exercise
directly any remedies other than those described in the above paragraph
available to the holders of the junior subordinated debentures. See "Description
of the Preferred Securities - Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The indenture provides that we will not consolidate with or merge into any
other entity or convey, transfer or lease our properties and assets
substantially as an entirety to any entity, and no entity will consolidate with
or merge into us or convey, transfer or lease its properties and assets
substantially as an entirety to us unless certain conditions prescribed in the
indenture are met. In the event we consolidate with or merge into another entity
or convey or transfer properties and assets substantially as an entirety to any
entity, these conditions include that the successor entity is organized under
the laws of the United States or any state or the District of Columbia, and that
the successor entity expressly assumes our obligations on the junior
subordinated debentures issued under the indenture. In addition, immediately
after giving effect to the transaction, no debenture event of default, and no
event which, after notice or lapse of time or both, would become a debenture
event of default, shall have occurred and be continuing.
The general provisions of the indenture do not afford holders of the junior
subordinated debentures protection in the event of a highly leveraged or other
change in control transaction involving us that may adversely affect holders of
the junior subordinated debentures.
Satisfaction and Discharge
The indenture will cease to be of further effect (except as to our
obligations to pay all other sums due pursuant to the indenture and to provide
the officers' certificates and opinions of counsel described therein), and we
will be deemed to have satisfied and discharged the indenture when certain
events occur. These events include when all of the junior subordinated
debentures not previously delivered to the trustee under the indenture for
cancellation
. have become due and payable, or
. will become due and payable at their stated maturity date or will be
called for redemption within one year,
and we deposit or cause to be deposited with the trustee under the indenture
funds, in trust. The deposited funds are for the purpose and in an amount in the
currency or currencies in which the junior subordinated debentures are payable
sufficient to pay and discharge the entire indebtedness on the junior
subordinated debentures not previously delivered to the trustee under the
indenture for cancellation, for the principal and interest to the date of the
deposit or to the stated maturity date or redemption, as the case may be.
Subordination
In the indenture, we have covenanted and agreed that the junior
subordinated debentures issued under the indenture will be subordinate and
junior in right of payment to all of our senior debt and
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subordinated debt to the extent provided in the indenture. Upon any payment or
distribution of assets to creditors upon the liquidation, dissolution, winding-
up, reorganization, assignment for the benefit of creditors, marshaling of
assets or any bankruptcy, insolvency, debt restructuring or similar proceedings
in connection with any insolvency or bankruptcy proceeding of ours, the holders
of our indebtedness senior in right of payment to the junior subordinated
debentures will first receive payment in full of principal of (and premium, if
any) and interest, if any, on such senior indebtedness. The holders of our
senior debt will receive such payment before the holders of the junior
subordinated debentures, or the property trustee on behalf of the holders,
receive or retain any payment in respect of the principal of or interest, if
any, on the junior subordinated debentures.
In the event of the acceleration of the maturity of any of the junior
subordinated debentures, the holders of all indebtedness senior in right of
payment to them outstanding at the time of such acceleration will receive
payment in full of all amounts due (including any amounts due upon acceleration)
before the holders of the junior subordinated debentures receive or retain any
payment in respect of the principal of or interest, if any, on the junior
subordinated debentures.
No payments on account of principal or interest, if any, in respect of the
junior subordinated debentures may be made if there shall have occurred and be
continuing a default in any payment with respect to indebtedness senior in right
of payment to the junior subordinated debentures, or an event of default with
respect to any such senior indebtedness resulting in the acceleration of the
maturity of the senior indebtedness, and any payments so received may be
required to be paid over to the holders of the senior indebtedness.
The indenture places no limitation on the amount of indebtedness senior in
right of payment to the junior subordinated debentures that may be incurred by
us. We may from time to time incur indebtedness constituting such senior
indebtedness.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent:
. every obligation of such person for money borrowed;
. every obligation of such person evidenced by bonds, debentures, notes
or other similar instruments, including obligations incurred in
connection with the acquisition of property, assets or businesses;
. every reimbursement obligation of such person with respect to letters
of credit, bankers' acceptances or similar facilities issued for the
account of such person;
. every obligation of such person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts
payable or accrued liabilities arising in the ordinary course of
business);
. every capital lease obligation of such person;
. all indebtedness of such person whether incurred on or before the date
of the indenture or thereafter incurred, for claims in respect of
derivative products, including interest rate,
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foreign exchange rate and commodity forward contracts, options and
swaps and similar arrangements; and
. every obligation of the type referred to in the clauses above of
another person and all dividends of another person the payment of
which, in either case, such person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
"Senior debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to us whether or not such claim for
post-petition interest is allowed in such proceeding), on debt, whether incurred
on or before the date of the indenture or thereafter incurred, unless, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligations are not superior in right of
payment to the junior subordinated debentures or to other debt which is equal in
priority with, or subordinated to, the junior subordinated debentures. However,
senior debt does not include:
. any of our debt which when incurred and without respect to any
election under Section 1111(b) of the United States Bankruptcy Code of
1978, as amended, was without recourse to us;
. any of our debt to any of our subsidiaries; and
. any debt to any of our employees.
"Subordinated debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to us whether or not such
claim for post-petition interest is allowed in such proceeding), on debt,
whether incurred on or before the date of the indenture or thereafter incurred,
which is by its terms expressly provided to be junior and subordinate to other
debt of ours (other than the junior subordinated debentures), except that
subordinated debt shall not include the junior subordinated debentures.
Governing Law
The indenture and the junior subordinated debentures will be governed by
and construed in accordance with the laws of the State of Delaware, without
regard to conflicts of laws principles thereof.
Information Concerning the Trustee Under the Indenture
The trustee under the indenture will have and be subject to all the duties
and responsibilities specified with respect to an indenture trustee under the
Trust Indenture Act. Subject to such provisions, the trustee under the indenture
is under no obligation to exercise any of the powers vested in it by the
indenture at the request of any holder of the junior subordinated debentures,
unless offered reasonable indemnity by such holder against the costs, expenses
and liabilities which might be incurred thereby. The trustee under the indenture
is not required to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if it reasonably believes
that repayment or adequate indemnity is not reasonably assured to it.
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Distribution of the Junior Subordinated Debentures
Under certain circumstances involving the dissolution of the trust, after
satisfaction of liabilities to creditors of the trust as provided by applicable
law, junior subordinated debentures may be distributed to the holders of the
preferred securities in exchange for their preferred securities upon liquidation
of the trust. See "Description of the Preferred Securities - Liquidation of the
Trust and Distribution of the Junior Subordinated Debentures to Holders." Any
distribution will be subject to receipt of prior regulatory approval if then
required. If the junior subordinated debentures are distributed to the holders
of preferred securities upon the liquidation of the trust, we will use our best
efforts to list the junior subordinated debentures on the American Stock
Exchange or such stock exchanges, if any, on which the preferred securities are
then listed. We can make no assurance as to the market price of any junior
subordinated debentures that may be distributed to the holders of the preferred
securities.
Payment and Paying Agents
Payment of principal of and any interest on the junior subordinated
debentures will be made at the offices of Wilmington Trust Company, trustee
under the indenture in the city of Wilmington, Delaware or at the offices of
such paying agent or paying agents as we may designate from time to time.
However, at our option, payment of any interest may be made
. by check mailed to the address of the person entitled to such payment
that appears in the securities register for the junior subordinated
debentures, or
. by wire transfer of immediately available funds upon written request
to the trustee under the indenture no later than fifteen calendar days
before the date on which the interest is payable by a holder of $1
million or more in aggregate principal amount of the junior
subordinated debentures.
Payment of any interest on the junior subordinated debentures will be made to
the person in whose name the junior subordinated debenture is registered at the
close of business on the regular record date for such interest, except in the
case of interest due and payable, but not timely paid. We may at any time
designate additional paying agents or rescind the designation of any paying
agent.
Any monies deposited with the trustee under the indenture or any paying
agent, or any monies held by us in trust, for the payment of the principal of or
interest on the junior subordinated debentures and remaining unclaimed for two
years after such principal or interest has become due and payable will be repaid
to us upon our written request on May 31 of each year or (if then held in trust
by us) will be discharged from such trust. After that repayment, the holders of
the junior subordinated debentures will look, as general unsecured creditors,
only to us for payment of such principal and interest.
Registrar and Transfer Agent
The trustee under the indenture will act as the registrar and the transfer
agent for the junior subordinated debentures. Junior subordinated debentures may
be presented for registration of transfer (with the form of transfer endorsed
thereon, or a satisfactory written instrument of transfer, duly executed) at the
office of the registrar. We may at any time rescind the designation of any such
transfer agent or approve a change in the location through which any such
transfer agent acts if we maintain a
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transfer agent in the place of payment. We may at any time designate additional
transfer agents with respect to the junior subordinated debentures. In the event
of any redemption, neither us nor the trustee under the indenture will be
required to issue, register the transfer of or exchange junior subordinated
debentures during a period beginning at the opening of business fifteen days
before the day of mailing of notice of redemption of junior subordinated
debentures (if less than all are to be redeemed) and ending at the close of
business on the day of mailing of the relevant notice of redemption. In
addition, neither us nor the trustee under the indenture will be required to
transfer or exchange any junior subordinated debentures selected for redemption,
except, in the case of any junior subordinated debentures being redeemed in
part, any portion thereof not to be redeemed.
DESCRIPTION OF THE GUARANTEE
We will execute and deliver the guarantee at the same time the trust issues
the preferred securities. Wilmington Trust Company will hold the guarantee as
the trustee under the guarantee for the benefit of the holders of the preferred
securities. The guarantee will be qualified under the Trust Indenture Act. This
summary of material provisions of the guarantee is not complete and is subject
to, and qualified in its entirety by reference to, all of the provisions of the
guarantee and the Trust Indenture Act. We have filed the form of the guarantee
as an exhibit to the registration statement of which this prospectus forms a
part.
General
To the extent described below, we will irrevocably agree to pay in full, on
a subordinated basis, the guarantee payments to the holders of the preferred
securities, as and when due, regardless of any defense, right of set-off or
counterclaim that the trust may have or assert other than the defense of
payment. If not paid by or on behalf of the trust, the following payments that
relate to the preferred securities (the "guarantee payments") will be subject to
the guarantee:
. any accrued and unpaid distributions required to be paid on the
preferred securities, to the extent that the trust has funds on hand
available for such distributions at such time;
. the redemption price, including unpaid distributions to the date of
redemption, with respect to any preferred securities called for
redemption, to the extent that the trust has funds on hand available
to pay such redemption price at such time; or
. upon a voluntary or involuntary dissolution, winding-up or termination
of the trust (unless the junior subordinated debentures are
distributed to holders of the preferred securities or all preferred
securities are redeemed), the lesser of:
. the liquidation amount and all accrued and unpaid distributions on
the preferred securities, to the extent that the trust has funds
available for such a payment at such time; and
. the amount of assets of the trust remaining available for
distribution to holders of the preferred securities after
satisfaction of liabilities to creditors of the trust as required
by applicable law.
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We may satisfy our obligation to make a guarantee payment by directly
paying the required amounts to the holders of the preferred securities or by
causing the trust to pay such amounts to such holders.
If we do not make interest payments on the junior subordinated debentures
held by the trust, the trust will not be able to pay distributions on the
preferred securities and will not have funds available for such distributions.
See "Status of the Guarantee." Because we are a holding company, our right to
participate in any distribution of assets of any subsidiary upon that
subsidiary's liquidation or reorganization or otherwise is subject to the prior
claims of creditors of that subsidiary, except to the extent we may be
recognized as a creditor of that subsidiary. Accordingly, our obligations under
the guarantee will be effectively subordinated to all existing and future
liabilities of our subsidiaries, and claimants should look only to our assets
for payments under the guarantee. The guarantee does not limit our ability to
incur or issue other secured or unsecured debt, including indebtedness senior in
right of repayment to the junior subordinated debentures, whether under the
indenture, any other indenture that we may enter into in the future, or
otherwise. We may from time to time incur indebtedness constituting such senior
indebtedness.
We and the trust believe that, taken together, our obligations under the
guarantee, the trust agreement, the junior subordinated debentures, the
indenture and the expense agreement, constitute, in the aggregate, a full,
irrevocable and unconditional guarantee, on a subordinated basis, of all of the
trust's obligations under the preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the trust's obligations under the preferred securities. See "Relationship
Among the Preferred Securities, the Junior Subordinated Debentures, the Expense
Agreement and the Guarantee."
Status of the Guarantee
The guarantee will constitute an unsecured obligation of us and will rank
subordinate and junior in right of payment to all of our indebtedness senior in
right of repayment to the junior subordinated debentures.
The guarantee will constitute a guarantee of payment and not of collection.
As a result, the guaranteed party may institute a legal proceeding directly
against us to enforce its rights under the guarantee without first instituting a
legal proceeding against any other person or entity. The trustee under the
guarantee will hold the guarantee for the benefit of the holders of the
preferred securities.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the preferred securities (in which case no vote will be
required), the guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate liquidation amount of such
outstanding preferred securities. The manner of obtaining any such approval will
be as set forth under "Description of the Preferred Securities - Voting Rights;
Amendment of the Trust Agreement." All guarantees and agreements contained in
the guarantee will bind our successors, assigns, receivers, trustees and
representatives and will inure to the benefit of the holders of the preferred
securities then outstanding.
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Events of Default
An event of default under the guarantee will occur upon our failure to
perform any of our payments or other obligations thereunder. The holders of not
less than a majority in aggregate liquidation amount of the preferred securities
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the trustee under the guarantee in respect of such
guarantee or to direct the exercise of any trust or power conferred upon the
trustee under the guarantee. We will not take certain actions in the event we
are in default under the guarantee. See "Description of the Junior Subordinated
Debentures - Restrictions on Certain Payments."
We, as guarantor, are required to file annually with the trustee under the
guarantee a certificate as to whether or not we are in compliance with all the
conditions and covenants applicable to us under the guarantee.
Information Concerning the Trustee Under the Guarantee
The trustee under the guarantee, other than during an event of default by
us in the performance of the guarantee, undertakes to perform only such duties
as are specifically set forth in the guarantee. After an event of default under
the guarantee, the trustee must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her own affairs.
Subject to this provision, the trustee under the guarantee is under no
obligation to exercise any of the powers vested in it by the guarantee at the
request of any holder of the preferred securities unless it is offered
reasonable indemnity by such holder against the costs, expenses and liabilities
that might be incurred thereby. The trustee under the guarantee is not required
to expend or risk its own funds or otherwise incur personal financial liability
in the performance of its duties if it reasonably believes repayment or adequate
indemnity is not reasonably assured to it.
Termination of the Guarantee
The guarantee will terminate and be of no further force and effect upon:
. full payment of the redemption price of the preferred securities;
. full payment of the amounts payable upon liquidation of the trust; or
. distribution of the junior subordinated debentures to the holders of
the preferred securities in exchange for their preferred securities.
The guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any holder of the preferred securities must restore
payment of any sums paid under the preferred securities or the guarantee.
Governing Law
The guarantee will be governed by and construed in accordance with the laws
of the State of Delaware, without regard to conflicts of laws principles
thereof.
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The Expense Agreement
Pursuant to the expense agreement entered into by us under the trust
agreement, we will irrevocably and unconditionally guarantee to each person or
entity to whom the trust becomes indebted or liable, the full payment of any
costs, expenses or liabilities of the trust, other than obligations of the trust
to pay to the holders of the preferred securities the amounts due such holders
pursuant to the terms of the preferred securities. Third party creditors of the
trust may proceed directly against us under the expense agreement, regardless of
whether such creditors had notice of the expense agreement.
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES, THE EXPENSE AGREEMENT
AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of distributions and other amounts due on the preferred securities
(to the extent the trust has funds available for the payment of such
distributions) are irrevocably guaranteed by us as and to the extent set forth
under "Description of the Guarantee." Taken together, our obligations under the
guarantee, the trust agreement, the junior subordinated debentures, the
indenture and the expense agreement, constitute, in the aggregate, a full,
irrevocable and unconditional guarantee, on a subordinated basis, of all of the
trust's obligations under the preferred securities. No single document standing
alone or operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these documents
that has the effect of providing a full, irrevocable and unconditional guarantee
of the trust's obligations under the preferred securities. If and to the extent
that we do not make payments on the junior subordinated debentures, the trust
will not pay distributions or other amounts due on its preferred securities. The
guarantee does not cover payment of distributions when the trust does not have
sufficient funds to pay such distributions. In such event, the remedy of a
holder of the preferred securities is to institute a legal proceeding against us
for enforcement of payment of such distributions to such holder. Our obligations
under the guarantee are subordinate and junior in right of payment to all
indebtedness senior in right of payment to the junior subordinated debentures.
Sufficiency of Payments
If payments of interest and other payments are made when due on the junior
subordinated debentures, such payments will be sufficient to cover distributions
and other payments due on the preferred securities. Such payments are sufficient
primarily because:
. the aggregate principal amount of the junior subordinated debentures
will be equal to the sum of the aggregate stated liquidation amount of
the preferred securities and the trust's common securities;
. the interest rate and interest and other payment dates on the junior
subordinated debentures will match the distribution rate and
distribution and other payment dates for the preferred securities;
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. we will pay for all and any costs, expenses and liabilities of the
trust except the trust's obligations to holders of its preferred
securities; and
. the trust agreement further provides that the trust will not engage in
any activity that is not consistent with the limited purposes of the
trust.
Notwithstanding anything to the contrary contained in the indenture, we
have the right to set-off any payment we are otherwise required to make under
the indenture if, and to the extent, we have made, or are concurrently making, a
payment under the guarantee.
Enforcement Rights of Holders of the Preferred Securities
A holder of a preferred security may institute a legal proceeding directly
against us to enforce its rights under the guarantee without first instituting a
legal proceeding against the trustee under the guarantee, the trust or any other
person or entity.
A default or event of default under any of our indebtedness senior to the
junior subordinated debentures would not constitute a default or event of
default under the indenture. However, in the event of payment defaults under, or
acceleration of, any such senior indebtedness, the subordination provisions of
the indenture provide that no payments may be made in respect of the junior
subordinated debentures until such senior indebtedness has been paid in full or
any payment default thereunder has been cured or waived. Failure to make
required payments on the junior subordinated debentures would constitute an
event of default under the indenture.
Limited Purpose of the Trust
The preferred securities evidence preferred undivided beneficial interests
in the assets of the trust. The trust exists for the sole purpose of issuing its
preferred securities and common securities and investing the proceeds of such
issuance in junior subordinated debentures. A principal difference between the
rights of a holder of a preferred security and a holder of a junior subordinated
debenture is that a holder of a junior subordinated debenture is entitled to
receive from us the principal amount of and interest accrued on junior
subordinated debentures held, while a holder of the preferred securities is
entitled to receive distributions from the trust (or from us under the
guarantee) if, and to the extent, the trust has funds available for the payment
of such distributions.
Rights Upon Dissolution
Upon any voluntary or involuntary dissolution, winding-up or liquidation of
the trust involving the liquidation of the junior subordinated debentures, after
satisfaction of liabilities to creditors of the trust, if any, as provided by
applicable law, the holders of the preferred securities will receive, out of
assets held by the trust, the liquidation distribution in cash. See "Description
of the Preferred Securities - Liquidation Distribution Upon Dissolution." Upon
any voluntary or involuntary liquidation or bankruptcy of us, the property
trustee, as holder of the junior subordinated debentures, would be a
subordinated creditor of ours. As a result, the property trustee would be
subordinated in right of payment to all of our indebtedness senior in right of
payment to the junior subordinated debentures as set forth in the indenture, but
entitled to receive payment in full of principal and interest before any of our
shareholders receive payments or distributions. Since we are the guarantor under
the guarantee and have
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agreed to pay for all costs, expenses and liabilities of the trust (other than
the trust's obligations to the holders of its preferred securities), the
positions of a holder of such preferred securities and a holder of the junior
subordinated debentures relative to other creditors and to our shareholders in
the event of our liquidation or bankruptcy are expected to be substantially the
same.
FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material United States federal income
tax consequences of the purchase, ownership and disposition of the preferred
securities. This discussion addresses only the tax consequences to a person that
acquires preferred securities on their original issue at the stated offering
price. It does not address the tax consequences to persons that may be subject
to special treatment under United States federal income tax law, such as banks,
insurance companies, thrift institutions, regulated investment companies, real
estate investment trusts, employee benefit plans, tax-exempt organizations,
dealers in securities or currencies, persons that will hold preferred securities
as part of a position in a "straddle" or as part of a "synthetic security,"
"hedging", "conversion" or other integrated investment transaction for federal
income tax purposes, persons whose functional currency is not the United States
dollar, or persons that do not hold preferred securities as capital assets. This
discussion also does not address tax consequences to shareholders, partners or
beneficiaries of a holder of the preferred securities. Further, it does not
include any description of any alternative minimum tax consequences or the tax
laws of any state or local government or of any foreign government that may be
applicable to the preferred securities. Accordingly, each prospective investor
should consult and should rely exclusively on, such investor's own tax advisors,
in light of the investor's own particular situation, in analyzing the federal,
state, local and foreign tax consequences of the purchase, ownership or
disposition of the preferred securities.
The following discussion constitutes the opinion of Elias, Matz, Tiernan &
Herrick L.L.P., special tax counsel to us and the trust. This discussion is
based upon the Internal Revenue Code of 1986, as amended, Treasury regulations,
Internal Revenue Service rulings and pronouncements and judicial decisions now
in effect, all of which are subject to change at any time. Such changes may be
applied retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of the preferred securities. The authorities on
which this discussion is based are subject to various interpretations, and it is
therefore possible that the United States federal income tax treatment of the
purchase, ownership and disposition of the preferred securities may differ from
the treatment described below. An opinion of counsel is not binding on the
Internal Revenue Service ("IRS") or the courts. No rulings have been or are
expected to be sought from the IRS with respect to any of the transactions
described herein and no assurance can be given that the IRS will not take
contrary positions. Moreover, no assurance can be given that the opinions
expressed herein will not be challenged by the IRS or, if challenged, that a
challenge would not be successful.
Prospective investors are advised to consult with their own tax advisors in
light of their own particular circumstances as to the United States federal tax
consequences of the purchase, ownership and disposition of the preferred
securities, as well as the effect of any state, local or foreign tax laws.
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Classification of the Trust and the Junior Subordinated Debentures
We, the trust and the holders of the trust preferred securities (by
acceptance of a beneficial interest in a trust preferred security) agree to
treat the junior subordinated debentures as our indebtedness for all United
States federal income tax purposes. Based in part upon certain factual
assumptions and upon certain factual representations made by us, which
representations Elias, Matz has relied upon and assumed to be true, correct and
complete, for United States federal income tax purposes under current law, the
trust will not be classified as an association taxable as a corporation, and the
junior subordinated debentures will be classified as indebtedness. As a result,
each beneficial owner of preferred securities (a "securityholder") will be
required to include in its gross income its pro rata share of the interest (or
accrued original issue discount) in addition to any interest and other income
(if any) with respect to the junior subordinated debentures. See "- Interest
Income and Original Issue Discount." No amount included in income with respect
to the preferred securities will be eligible for the dividends-received
deduction. If our representations are inaccurate, this opinion could be
adversely affected.
Interest Income and Original Issue Discount
Under applicable Treasury regulations, currently Section 1.1275-2(h) (the
"regulations"), if the terms and conditions of a debt instrument make the
likelihood that stated interest will not be timely paid a "remote" contingency,
such contingency will be ignored in determining whether the debt instrument is
issued with original issue discount ("OID"). We believe that the likelihood of
our exercising our option to defer payments of interest on the junior
subordinated debentures is remote, because exercising that option would (a)
prevent us from making distributions on our common stock, which would adversely
affect our directors who are major shareholders and who rely upon such
distributions to pay their income taxes on our taxable income attributable to
them, and (b) adversely impact our ability to raise additional capital or obtain
additional borrowings from unaffiliated third parties. Based on the foregoing,
we intend to take the position that the junior subordinated debentures were not
issued with OID. Accordingly, a securityholder purchasing the preferred
securities at the stated price should be required to include in gross income
only such securityholder's pro rata share of stated interest on the junior
subordinated debentures in accordance with such securityholder's method of tax
accounting.
Under the regulations, if we were to exercise our option to defer payments
of interest after treating the junior subordinated debentures as issued without
OID, or if the likelihood of us exercising our option to defer payments of
interest on the junior subordinated debentures is determined not to be remote by
the Internal Revenue Service, the junior subordinated debentures would be
treated as re-issued with OID at that time. In addition, all stated interest
(and de minimis OID, if any) on the junior subordinated debentures would
thereafter be treated as OID if the junior subordinated debentures remained
outstanding. In such event, all of a securityholder's interest income with
respect to the junior subordinated debentures would be accounted for as OID on
an economic accrual basis regardless of such securityholder's method of tax
accounting, and actual distributions of stated interest related thereto would
not be includable in gross income. Consequently, a securityholder would be
required to include OID in gross income even though we would not make and the
securityholder would not receive any actual cash payments during an extension
period.
The regulations have not yet been addressed in any rulings or other
published interpretations by the IRS. In the event that we do not make a
deferral election, and based upon our representations, the IRS should treat the
deferral election as a remote contingency. However, it is possible the IRS could
take the
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position that the likelihood of deferral was not a remote contingency within the
meaning of the regulations.
A securityholder that disposed of preferred securities before the record
date for the payment of distributions following an extension period would
include OID in gross income but would not receive any cash related thereto from
the trust. Any amount of OID included in a securityholder's gross income
(whether or not during an extension period) would increase such securityholder's
tax basis in its preferred securities, and the amount of distributions not
includable in gross income would reduce such securityholder's tax basis in its
preferred securities.
Distribution of the Junior Subordinated Debentures to Holders of the Preferred
Securities
Under current United States federal income tax law and provided that the
trust is not subsequently treated as an association taxable as a corporation, a
distribution by the trust of the junior subordinated debentures as described
under the caption "Description of the Preferred Securities - Liquidation of the
Trust and Distribution of the Junior Subordinated Debentures to Holders" will be
nontaxable to the securityholders. Such distribution will also result in a
securityholder receiving its pro rata share of the junior subordinated
debentures previously held indirectly through the trust, with a holding period
and aggregate tax basis equal to the holding period and aggregate tax basis such
securityholder had in its preferred securities before such distribution. A
securityholder will account for interest in respect of the junior subordinated
debentures received from the trust in the manner described above under " -
Interest Income and Original Issue Discount," including any accrual of OID (if
any) attributed to the junior subordinated debentures upon the distribution.
Sales or Redemption of the Preferred Securities
Gain or loss will be recognized by a securityholder on the sale of
preferred securities (including a redemption for cash or other consideration) in
an amount equal to the difference between the amount realized on the sale (or
redemption) and the securityholder's adjusted tax basis in the preferred
securities sold or so redeemed. Gain or loss recognized by a securityholder on
preferred securities held for more than one year will generally be taxable as
long-term capital gain or loss. Preferred securities constituting a capital
asset which are acquired by an individual and held for more than one year are
accorded a maximum United States federal capital gains tax rate of 20% (or a
rate of 10%, if the individual taxpayer is in the 15% tax bracket). Effective in
2001, the 20% rate drops to 18% (and the 10% rate drops to 8%) for capital
assets acquired after the year 2000 and held more than five years. However, the
requirement that the capital asset be acquired after the year 2000 does not
apply to the 8% rate.
If we were to exercise our option to defer payments of interest on the
junior subordinated debentures, or if the likelihood of our exercising our
option to defer payments of interest on the junior subordinated debentures was
determined not to be remote by the IRS, the preferred securities might trade at
a price that did not fully reflect the value of accrued but unpaid interest with
respect to the underlying junior subordinated debentures. A securityholder that
disposed of its preferred securities between record dates for payments of
distributions (and consequently did not receive a distribution from the trust
for the period before such disposition) would nevertheless be required to
include in income as ordinary income accrued but unpaid interest on the junior
subordinated debentures through the date of disposition. In addition, such
securityholder would be required to add such amount to its adjusted tax basis in
its disposed of preferred securities. Such securityholder would recognize a
capital loss on the disposition of
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its preferred securities to the extent the selling price (which might not fully
reflect the value of accrued but unpaid interest) was less than the
securityholder's adjusted tax basis in the preferred securities (which would
include accrued but unpaid interest). In the case of individual taxpayers,
capital losses can be applied to offset capital gains plus up to $3,000 ($1,500
for married individuals filing separate returns) of ordinary income for United
States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States alien holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership or a non-resident fiduciary of a foreign estate or trust.
Under current United States federal income tax law, payments by the trust
or any of its paying agents to any securityholder who or which is a United
States alien holder will not be subject to United States federal withholding tax
provided that the following three conditions are met. First, the securityholder
does not actually or constructively own 10% or more of the total combined voting
power of our common stock entitled to vote. Second, the securityholder is not a
controlled foreign corporation that is related to us through share ownership.
Third, either the securityholder certifies to the trust or its agent, under
penalties of perjury, that it is not a United States holder and provides its
name and address or a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "financial institution") certifies to the trust or its agent,
under penalties of perjury, that such statement has been received from the
securityholder by it or by a financial institution holding such security for the
securityholder and furnishes the trust or its agent with a copy thereof. Under
current United States federal income tax law, a United States alien holder of a
preferred security generally will not be subject to United States federal
withholding tax on any gain realized upon the sale or other disposition of a
preferred security.
In October 1997, final Treasury regulations (the "withholding tax
regulations") effective for payments of interest after December 31, 1999, were
issued that provide alternative methods for satisfying the certification
requirements described in the third condition above. The withholding tax
regulations also require, in the case of preferred securities held by a foreign
partnership, that the certification described in the third condition above be
provided by the partners rather than by the foreign partnership. A look-through
rule would apply in the case of tiered partnerships. Prospective investors are
urged to consult their tax advisors with respect to the effect of the
withholding tax regulations. the trust will issue a Form 1042 or 1042-S, where
appropriate.
Proposed Tax Law Changes
Legislation has been introduced in the United States Congress in the past
that, if enacted, would have denied an interest deduction to issuers of
instruments such as the junior subordinated debentures that were issued after
the date such legislation was proposed. No such legislation is currently
pending. We cannot assure you, however, that similar legislation will not
ultimately be enacted into law, possibly with retroactive effect, or that there
will not be other developments that would adversely affect the tax treatment of
the junior subordinated debentures and could result in the occurrence of tax
event, possibly leading to the redemption of the junior subordinated debentures.
See "Description of the Junior Subordinated Debentures - Redemption or
Exchange."
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We are aware of at least one case, involving Enron Corporation, where the
IRS initially sought to disallow the deduction for interest expense on
securities that are similar to, although different in a number of respects from,
the junior subordinated debentures. Such securities were issued in 1993 and 1994
to partnerships that, in turn, issued "monthly income preferred securities." In
a recently filed stipulation in the United States Tax Court, the IRS decided not
to challenge Enron's deduction of its interest expense on the securities.
Although the IRS has apparently conceded the interest deductibility issue in the
Enron case, there can be no assurance that the IRS will not challenge the
interest deductions of other taxpayers (such as us) which issue similar types of
preferred securities.
No Impact on S Corporation Status
As a Subchapter S corporation, we cannot have more than one class of stock.
The junior subordinated debentures to be issued by us to the trust will be
classified as indebtedness for federal income tax purposes and not as stock. As
a result, we will continue to only have one class of stock for federal income
tax purposes after we issue the junior subordinated debentures, and the issuance
of the debentures will not affect our status as a Subchapter S corporation.
Information Reporting to Securityholders
Generally, income on the preferred securities will be reported to
securityholders on Forms 1099-INT (Forms 1099-OID if interest is accounted for
under the OID rules), which will be mailed to securityholders by January 31
following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, preferred securities may
be subject to a "backup" withholding tax of 31% unless the securityholder
complies with certain certification requirements. Any withheld amounts will be
allowed as a credit against the securityholder's United States federal income
tax, provided the required information is provided to the IRS on a timely basis.
ERISA CONSIDERATIONS
We, certain of our affiliates and the property trustee may each be
considered a "party in interest" within the meaning of the Employee Retirement
Income Security Act of 1974 ("ERISA") or a "disqualified person" within the
meaning of Section 4975 of the Internal Revenue Code with respect to many
employee benefit plans that are subject to ERISA and/or certain employee
benefit-related provisions of the Internal Revenue Code. The purchase of the
preferred securities by an employee benefit plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited transaction
provisions of Section 4975(e)(1) of the Internal Revenue Code and with respect
to which we, any of our affiliates, or the property trustee is a service
provider (or otherwise is a party in interest or a disqualified person) may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Internal Revenue Code, unless the preferred securities are acquired pursuant
to and in accordance with an applicable exemption. Any pension or other
employee benefit plan proposing to acquire any preferred securities should
consult with its counsel.
121
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement dated
__________ __, 1999, among us, the trust and Ryan, Beck & Co., the trust has
agreed to sell to Ryan, Beck, and Ryan, Beck has agreed to purchase from the
trust, 1,000,000 of preferred securities at the public offering price subject to
the underwriting commissions set forth on the cover page of this prospectus. The
underwriting agreement provides that the obligations of Ryan, Beck are subject
to certain conditions precedent and that Ryan, Beck will purchase all of the
preferred securities offered hereby if any of such preferred securities are
purchased.
We have been advised by Ryan, Beck that it proposes to offer the preferred
securities to the public and other dealers at the public offering price set
forth on the cover page of this prospectus and will share with certain dealers
from its commission a concession not in excess of $_______ per preferred
security. Ryan, Beck may allow, and such dealers may reallow, a concession not
in excess of $______ per preferred security to certain other dealers. After the
public offering, the offering price and other selling terms may be changed by
Ryan, Beck.
We have granted to Ryan, Beck an option, exercisable not later than 30 days
after the date of this prospectus, to purchase up to an additional 150,000
preferred securities at the public offering price. To the extent that Ryan, Beck
exercises such option, we will be obligated, pursuant to the option, to sell
such preferred securities to Ryan, Beck. Ryan, Beck may exercise such option
only to cover over-allotments made in connection with the sale of the preferred
securities offered hereby. If purchased, the underwriter will offer such
additional preferred securities on the same terms as those of the other
preferred securities offered hereby.
In view of the fact that the proceeds from the sale of the preferred
securities will be used to purchase the junior subordinated debentures issued by
us, the underwriting agreement provides that we will pay as compensation for
Ryan, Beck's arranging the investment therein of such proceeds an amount of
$________ per preferred security (or $_________ ($_______ if the over-allotment
option is exercised in full) in the aggregate). We have also agreed to reimburse
Ryan, Beck for its reasonable out-of-pocket expenses, including legal fees (not
to exceed $75,000 in legal fees and $20,000 in other expenses (excluding "blue
sky" work) without our prior written consent) relating to the offering of the
preferred securities.
Ryan, Beck has advised us that they do not intend to confirm any sales of
preferred securities to any discretionary accounts. Because the National
Association of Securities Dealers, Inc. is expected to view the preferred
securities as interests in a direct participation program, the offering of the
preferred securities is being made in compliance with the applicable provisions
of Rule 2810 of the NASD's Conduct Rules.
Although the trust has applied to list the preferred securities on the
American Stock Exchange, we can make no assurances as to the liquidity of the
preferred securities. See "Risk Factors - Risk Factors Relating to the
Preferred Securities - You may have difficulty selling your preferred securities
if an active trading market does not develop." The offering price and
distribution rate of the preferred securities have been determined by
negotiations among representatives of us, the trust and Ryan, Beck & Co. Such
offering prices may not be indicative of the market price of the preferred
securities following the offering.
122
<PAGE>
In connection with the offering, Ryan, Beck & Co. and any selling group
members and their respective affiliates may engage in transactions effected in
accordance with Rule 104 of the Securities and Exchange Commission's Regulation
M that are intended to stabilize, maintain or otherwise affect the market price
of the preferred securities. Such transactions may include over-allotment
transactions in which Ryan, Beck & Co. creates a short position for its own
account by selling more preferred securities than it is committed to purchase.
In such a case, to cover all or part of the short position, Ryan, Beck & Co. may
exercise the over-allotment option described above to purchase additional
preferred securities or may purchase preferred securities in the open market
following completion of the initial offering. Ryan, Beck & Co. also may engage
in stabilizing transactions in which it bids for, and purchases, preferred
securities at a level above that which might otherwise prevail in the open
market for the purpose of preventing or slowing a decline in the market price of
the preferred securities. Ryan, Beck & Co. also may reclaim any selling
concessions allowed to an underwriter or dealer if Ryan, Beck & Co. repurchases
shares distributed by Ryan, Beck & Co. or such dealer. Any of the foregoing
transactions may result in the maintenance of a price for the preferred
securities at a level above that which might otherwise prevail in the open
market. Neither us nor Ryan, Beck & Co. makes any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of the preferred securities. Ryan, Beck & Co. is not
required to engage in any of the foregoing transactions and, if commenced, such
transactions may be discontinued at any time without notice.
We and the trust have agreed to indemnify Ryan, Beck & Co. against certain
liabilities, including liabilities under the Securities Act of 1933.
VALIDITY OF SECURITIES
Richards, Layton & Finger, P.A., special Delaware counsel to CB&T and the
trust, will pass upon the following legal matters:
. the due authorization and valid issuance of the preferred securities
by the trust;
. the validity of the trust agreement and its binding obligation on and
enforceability against CB&T and the trustees;
. the due creation and valid existence of the trust, and its trust power
and authority to own its property and conduct its business; and
. the due authorization of the underwriting agreement by the trust.
Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C., special counsel to
CB&T, will pass upon the following legal matters for CB&T:
. the due authorization, execution and delivery of the Guarantee by, and
its binding obligation on, CB&T; and
123
<PAGE>
. the due authorization, execution and delivery of the junior
subordinated debentures and the underwriting agreement by CB&T.
Silver, Freedman & Taff, L.L.P., Washington, D.C., will pass upon the
following legal matters for Ryan, Beck:
. the due creation and valid existence of the trust;
. the due authorization, execution and delivery of the underwriting
agreement, the trust agreement, the guarantee and the indenture; and
. the due authorization and valid issuance of the preferred securities
by the trust, and the junior subordinated debentures by CB&T.
Elias, Matz, Tiernan & Herrick L.L.P. will also pass upon issues relating
to United States federal income tax considerations for us as set forth in
"Federal Income Tax Consequences."
EXPERTS
Our consolidated financial statements as of December 31, 1998 and for the
year then ended, included in this prospectus, have been included in reliance
upon the report of Grant Thornton LLP, independent certified public accountants,
appearing elsewhere in this prospectus, and upon the authority of said firm as
experts in accounting and auditing. Our consolidated financial statements as of
December 31, 1997 and for the years ended December 31, 1997 and 1996, included
in the prospectus, have been included in reliance upon the report of Roth Murphy
Sanford LLP, independent certified public accountants, appearing elsewhere
herein, and upon the authority of said firm as experts in accounting and
auditing.
REPORTS OF CB&T
We intend to file with the Securities and Exchange Commission annual
reports containing our audited consolidated financial statements and quarterly
reports for the first three quarters of each fiscal year containing unaudited
financial information. We will make copies of these reports available to any
holder of the preferred securities who makes an oral or written request for such
reports to the Secretary of CB&T at our executive office. Prior to this
offering, we have not been a reporting company with the Securities and Exchange
Commission.
WHERE YOU CAN FIND MORE INFORMATION
CB&T and the trust have filed with the Commission a registration statement
on Form S-1 that relates to the preferred securities, the junior subordinated
debentures and the guarantee. This prospectus is only part of the registration
statement. It does not contain all of the information in the registration
statement. The rules and regulations of the Commission permit us to omit certain
portions of the registration statement from the prospectus. For more information
regarding CB&T, the trust, the
124
<PAGE>
preferred securities, the junior subordinated debentures and the guarantee, you
should refer to the registration statement, including the exhibits.
This prospectus contains a description of the material terms and features
of all material contracts, reports or exhibits to the registration statement
required to be disclosed. The descriptions of such documents are brief and are
not necessarily complete. As a result, we urge you to refer to the copy of each
material contract, report and exhibit attached to the registration statement for
a more complete description of such document. Each such statement in this
prospectus is qualified in its entirety by reference to the complete document.
You may read the registration statement without charge at the principal office
of the Commission in Washington, D.C., and you may obtain copies of all or part
of it from the Commission by paying the prescribed fees. The Commission also
maintains an Internet world wide web site that contains registration statements
and other information about issuers like us who file electronically with the
Commission. The address of that site is http://www.sec.gov.
No separate financial statements of the trust have been included herein. We
do not believe that such financial statements would be material to holders of
preferred securities because
(1) all of the voting securities of the trust will be owned by us,
(2) the trust has no independent operations and exists for the sole purpose
of issuing securities representing undivided beneficial interests in the assets
of the trust and investing the proceeds thereof in junior subordinated
debentures issued by us, and
(3) taken together, our obligations under the guarantee, the trust
agreement, the junior subordinated debentures, the indenture and the expense
agreement constitute, in the aggregate, a full, irrevocable and unconditional
guarantee, on a subordinated basis, of all of the trust's obligations under the
preferred securities.
See "Description of the Junior Subordinated Debentures" and "Description of the
Guarantee." We expect that the trust will not file separate reports, proxy
statements and other information under the Securities Act with the Commission.
125
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Page
Independent Auditors' Reports............................................. F-1
Consolidated Balance Sheets as of June 30, 1999 (unaudited) and
December 31, 1998 and 1997 (audited).................................. F-3
Consolidated Statements of Earnings for the six months ended June 30,
1999 and 1998 (unaudited) and the years ended December 31,
1998, 1997 and 1996 (audited)......................................... F-4
Consolidated Statements of Changes in Shareholders' Equity for the
six months ended June 30, 1999 (unaudited) and the years
ended December 31, 1998, 1997 and 1996 (audited)...................... F-5
Consolidated Statements of Cash Flows for the six months ended June 30,
1999 and 1998 (unaudited) and the years ended December 31, 1998,
1997 and 1996 (audited)............................................... F-6
Notes to Consolidated Financial Statements................................ F-8
All financial statement schedules are omitted because the required
information either is not applicable or is shown in the financial statements or
in the notes thereto.
126
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Board of Directors
CB&T Holding Corporation and Subsidiaries
We have audited the accompanying consolidated balance sheet of CB&T Holding
Corporation and Subsidiaries as of December 31, 1998, and the related
consolidated statements of earnings, changes in shareholders' equity and cash
flows for the year then ended. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of CB&T
Holding Corporation and Subsidiaries as of December 31, 1998, and the
consolidated results of their operations and their consolidated cash flows for
the year then ended in conformity with generally accepted accounting principles.
/s/GRANT THORNTON LLP
Dallas, Texas
June 4, 1999
F-1
<PAGE>
INDEPENDENT AUDITOR'S REPORT
----------------------------
To the Board of Directors and Shareholders
CB&T Holding Corporation and Subsidiaries
New Orleans, Louisiana
We have audited the accompanying consolidated statement of condition of CB&T
Holding Corporation and Subsidiaries as of December 31, 1997, and the related
consolidated statements of income, changes in shareholders' equity and cash
flows for the years ended December 31, 1997 and 1996. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the consolidated financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the consolidated
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of CB&T
Holding Corporation and Subsidiaries as of December 31, 1997, and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1997 and 1996 in conformity with generally accepted
accounting principles.
/s/ Roth Murphy Sandord L.L.P.
January 30, 1998 (except for Note H, as to
which the date is March 11, 1998)
F-2
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<TABLE>
<CAPTION>
December 31,
June 30, -------------------
ASSETS 1999 1998 1997
----------- -------- --------
(unaudited)
<S> <C> <C> <C>
Cash and due from banks $ 2,122 $ 3,637 $ 2,504
Federal funds sold 29,030 23,280 17,345
Securities available for sale 18,661 15,890 25,838
Federal Home Loan Bank stock 867 844 796
Mortgage loans held for sale 453 1,577 2,517
Loans, net 221,285 233,718 191,776
Accrued interest receivable 1,611 2,266 1,298
Bank premises and equipment, net 1,084 984 637
Deferred income taxes - - 1,009
Other assets 1,078 330 939
-------- -------- --------
$276,191 $282,526 $244,659
======== ======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest bearing $ 10,524 $ 10,662 $ 8,793
Interest bearing 235,252 242,066 207,904
-------- -------- --------
245,776 252,728 216,697
Borrowings 11,324 11,624 12,224
Accrued interest payable 412 454 391
Other liabilities 1,282 1,058 1,222
-------- -------- --------
Total liabilities 258,794 265,864 230,534
Commitments and contingencies - - -
Shareholders' equity
Common stock - $2.50 par value; 5,000,000 shares
authorized; 204,000 shares issued and outstanding 510 510 510
Additional paid-in capital 3,490 3,490 3,490
Retained earnings 13,455 12,462 10,030
Accumulated other comprehensive income (loss) (58) 200 95
-------- -------- --------
Total stockholders' equity 17,397 16,662 14,125
-------- -------- --------
$276,191 $282,526 $244,659
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
F-3
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(dollars in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
------------------ ----------------------------
1999 1998 1998 1997 1996
------- -------- ------- ------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Interest income
Loans $19,637 $17,010 $34,535 $27,337 $20,617
Securities
Taxable 552 665 1,205 1,344 878
Non-taxable 57 60 119 98 89
Federal funds sold 582 571 1,527 777 536
------- ------- ------- ------- -------
20,828 18,306 37,386 29,556 22,120
Interest expense
Deposits 6,632 6,166 12,911 10,253 7,696
Borrowed funds 367 412 811 228 173
------- ------- ------- ------- -------
6,999 6,578 13,722 10,481 7,869
------- ------- ------- ------- -------
Net interest income 13,829 11,728 23,664 19,075 14,251
Provision for credit losses 3,291 2,565 5,336 4,883 2,933
------- ------- ------- ------- -------
Net interest income after
provision for credit losses 10,538 9,163 18,328 14,192 11,318
Other income
Loan fees 591 361 820 598 515
Credit life insurance fees 230 322 598 709 710
Gain on sale of mortgage loans 283 391 751 197 71
Service charges on deposit accounts 46 45 93 78 90
Other 25 2 7 11 29
------- ------- ------- ------- -------
1,175 1,121 2,269 1,593 1,415
Other expenses
Salaries and employee benefits 5,054 3,730 8,001 6,312 4,769
Occupancy 1,001 724 1,551 1,129 789
Collection 774 510 1,069 688 556
Insurance 266 291 642 508 342
Telephone 386 254 565 376 268
Printing and postage 296 262 528 344 221
Business development 227 204 516 472 332
Professional fees 236 182 382 242 266
Other 432 411 783 887 729
------- ------- ------- ------- -------
8,672 6,568 14,037 10,958 8,272
------- ------- ------- ------- -------
Earnings before income taxes 3,041 3,716 6,560 4,827 4,461
Income tax expense 12 1,826 1,838 1,804 1,564
------- ------- ------- ------- -------
Net earnings $ 3,029 $ 1,890 $ 4,722 $ 3,023 $ 2,897
======= ======= ======= ======= =======
Basic earnings per share $14.85 $9.26 $23.15 $14.82 $14.20
======= ======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of these statements.
F-4
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(dollars in thousands)
<TABLE>
<CAPTION>
Accumulated
Additional other
Common paid-in Retained comprehensive
stock capital earnings income (loss) Total
----------- ------- --------- -------------- --------
<S> <C> <C> <C> <C> <C>
Balances at January 1, 1996 $ 510 $2,490 $ 5,110 $ 101 $ 8,211
Transfer from retained earnings - 1,000 (1,000) - -
Comprehensive income
Net earnings - - 2,897 - 2,897
Net change in unrealized gain (loss)
on securities available for sale,
net of tax - - - (114) (114)
-------
Total comprehensive income 2,783
----------- ------- -------- ------------- -------
Balances at December 31, 1996 510 3,490 7,007 (13) 10,994
Comprehensive income
Net earnings - - 3,023 - 3,023
Net change in unrealized gain (loss)
on securities available for sale,
net of tax - - - 108 108
-------
Total comprehensive income 3,131
----------- ------- -------- ------------- -------
Balances at December 31, 1997 510 3,490 10,030 95 14,125
Comprehensive income
Net earnings - - 4,722 - 4,722
Net change in unrealized gains (loss)
on securities available for sale,
net of tax - - - 105 105
-------
Total comprehensive income 4,827
-------
Cash dividends - - (2,290) - (2,290)
----------- ------- ------- ------------- -------
Balances at December 31, 1998 510 3,490 12,462 200 16,662
Comprehensive income
Net earnings (unaudited) - - 3,029 - 3,029
Net change in unrealized gain (loss) on
securities available for sale, net of
tax (unaudited) - - - (258) (258)
-------
Total comprehensive income 2,771
Cash dividends (unaudited) - - (2,036) - (2,036)
----------- ------- ------- ------------- -------
Balances at June 30, 1999 (unaudited) $ 510 $3,490 $13,455 $ (58) $17,397
=========== ======= ======= ============= =======
</TABLE>
The accompanying notes are an integral part of this statement.
F-5
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
--------------------- ---------------------------------
1999 1998 1998 1997 1996
--------- --------- --------- --------- ---------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net earnings $ 3,029 $ 1,890 $ 4,722 $ 3,023 $ 2,897
Adjustments to reconcile net earnings
to net cash provided by operating
activities
Depreciation and amortization 235 133 290 258 185
Net accretion of securities
and purchased loans (1,195) (962) (1,001) (119) (241)
Provision for credit losses 3,291 2,565 5,336 4,883 2,933
Federal Home Loan Bank stock
dividend (23) (23) (48) (4) -
Gain on sale of equipment - - (7) (11) -
Gain on sale of mortgage loans (283) (392) (751) (197) (71)
Proceeds from sales of loans held
for sale 11,145 15,108 32,244 6,769 7,025
Originations of loans held for sale (9,738) (15,893) (30,553) (9,088) (6,469)
Deferred income taxes - 1,009 1,079 94 (382)
Changes in operating assets
and liabilities
Accrued interest and other
assets (93) 586 (409) (1,141) (649)
Accrued interest and other
liabilities 182 295 (121) 48 90
-------- -------- -------- -------- --------
Net cash provided by
operating activities 6,550 4,316 10,781 4,515 5,318
Cash flows from investing activities
Net increase in Federal funds sold (5,750) (10,350) (5,935) (9,930) (1,990)
Purchases of securities (10,041) (4,000) (3,998) (15,277) (9,944)
Proceeds from sale of securities - - - 866 1,715
Proceeds from maturities and calls of
securities 7,097 7,716 13,904 6,348 6,716
Purchase of Federal Home Loan Bank
Stock - - - (791) -
Purchase of loans (4,557) - (62,509) (34,610) (1,845)
Net decrease (increase) in loans 14,809 (9,070) 16,376 (20,067) (39,805)
Proceeds from sale of equipment - - 9 80 5
Purchase of bank premises and equipment (335) (293) (636) (392) (273)
-------- -------- -------- -------- --------
Net cash provided by (used in)
investing activities 1,223 (15,997) (42,789) (73,773) (45,421)
</TABLE>
F-6
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(dollars in thousands)
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
-------------------- ------------------------------
1999 1998 1998 1997 1996
-------- --------- --------- -------- -------
(unaudited)
<S> <C> <C> <C> <C> <C>
Cash flows from financing activities
Cash dividends $(2,036) $ (793) $(2,290) $ - $ -
Proceeds from borrowings - - - 10,423 1,000
Payments on borrowings (300) (150) (600) (1,200) -
Net (decrease) increase in deposits (6,952) 12,973 36,031 59,897 40,194
------- ------- ------- ------- -------
Net cash provided by
(used in) financing
activities (9,288) 12,030 33,141 69,120 41,194
------- ------- ------- ------- -------
Net increase (decrease) in cash and due
from banks (1,515) 349 1,133 (138) 1,091
Cash and due from banks, beginning of period 3,637 2,504 2,504 2,642 1,551
------- ------- ------- ------- -------
Cash and due from banks, end of period $ 2,122 $ 2,853 $ 3,637 $ 2,504 $ 2,642
======= ======= ======= ======= =======
Supplemental disclosures
Cash paid for
Interest $ 7,041 $ 6,505 $12,848 $10,389 $ 8,118
Income taxes - - 474 1,789 1,861
Noncash investing transactions
Real estate received in settlement of loans $ - $ - $ 5 $ 321 $ -
</TABLE>
The accompanying notes are an integral part of this statement.
F-7
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CB&T Holding Corporation (the Company), a Louisiana corporation, provides
financial services to individuals and small businesses through its wholly-owned
bank subsidiary, Crescent Bank & Trust (the Bank). The Bank operates two full
service branches in New Orleans, nine limited service branches in Louisiana and
seven loan production offices in Mississippi, Georgia, Tennessee, and Kentucky.
Its primary lending products are personal automobile loans, and residential and
commercial real estate loans. The Bank's primary deposit products are
certificates of deposit and demand deposit accounts.
CUC, Inc. (CUC), a used auto dealership, was organized to dispose of the Bank's
repossessed vehicles and operated on the gulf coast of Mississippi. In 1997,
CUC ceased operations.
A summary of the significant accounting policies of the Company consistently
applied in the preparation of the accompanying consolidated financial
statements follows. The accounting principles followed by the Company and the
methods of applying them are in conformity with both generally accepted
accounting principles and prevailing practices of the banking industry.
The consolidated financial statements include the accounts of CB&T Holding
Corporation and its wholly-owned subsidiaries Crescent Bank & Trust and CUC,
Inc. All material intercompany transactions and balances have been eliminated.
The accompanying consolidated financial statements and information as of June
30, 1999 and for the six months ended June 30, 1999 and 1998 are unaudited and
include all adjustments (consisting of only normal recurring adjustments) that
are necessary, in the opinion of management, for a fair presentation.
Estimates
---------
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Cash and Cash Equivalents
-------------------------
For the purpose of presentation in the consolidated statements of cash flows,
cash and cash equivalents are defined as those amounts included in the balance
sheet caption "cash and due from banks."
F-8
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
Advertising
-----------
The Company expenses the costs of advertising as incurred. Advertising expense
was approximately $107, $154 and $187 for the years ended December 31, 1998,
1997 and 1996, and $45 and $51 for the six months ended June 30, 1999 and 1998,
respectively.
Investment Securities
---------------------
The Company classifies investments as available for sale. Unrealized holding
gains and losses, net of tax, are reported as a net amount in other
comprehensive income.
Gains and losses on the sale of securities available for sale are determined
using the specific-identification method.
Fair Value of Financial Instruments
-----------------------------------
In estimating the fair values of financial instruments, the Bank used the
following method and assumptions:
Cash and due from banks: The balance sheet carrying amounts approximate the
estimated fair values of such assets.
Federal funds sold: The balance sheet carrying amounts approximate the
estimated fair values of such assets.
Securities available for sale: Fair values for securities available for sale
are based upon quoted market prices. The carrying amount of accrued interest
receivable on securities approximates its fair value.
Loans: For variable-rate loans that reprice frequently and have no significant
change in credit risk, fair values are based on carrying values. Fair values
of other loans are estimated using projected cash flow analyses, discounted at
interest rates currently being offered for loans with similar terms to
borrowers of similar credit quality. Mortgage loans held for sale are valued
using fair values attributable to similar mortgage loans. Fair values for
impaired loans are estimated using underlying collateral values. The carrying
amount of accrued interest approximates its fair value.
Federal Home Loan Bank (FHLB) stock: No secondary market exists for FHLB
stock. The stock is bought and sold at par by the FHLB. The recorded value,
therefore, is the fair value.
F-9
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
Deposit liabilities: The fair values of demand deposits are, by definition,
equal to the amount payable on demand at the reporting date (that is, their
carrying amounts). The carrying amounts of variable-rate, fixed-term money-
market accounts and certificates of deposit (CDs) approximate their fair values
at the reporting date. Fair values for fixed-rate CDs are estimated using a
discounted cash flow calculation that applies interest rates currently being
offered on certificates to a schedule of aggregated expected monthly maturities
on time deposits. The carrying amount of accrued interest approximates its
fair value.
Borrowings: Fair values of borrowings are estimated using discounted cash flow
analysis based on the Company's current incremental borrowing rates for similar
types of borrowing arrangements.
Off-balance sheet instruments: Fair values for off-balance sheet lending
commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreement and the
counterparties' credit standing.
Mortgage Loans Held for Sale
----------------------------
Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated market value in the aggregate. Net
unrealized losses are recognized through a valuation allowance by charges to
earnings.
Loans
------
Loans receivable that management has the intent and ability to hold for the
foreseeable future or until maturity or pay off, are reported at their
outstanding principal adjusted for any charge-offs, the allowance for credit
losses, and any deferred fees or costs on originated loans and unamortized
premiums or discounts on purchased loans. Consumer automobile loans are
collateralized by vehicle titles, and the Company has the right to repossess
the vehicle in the event that the consumer defaults on the payment terms of the
contract. Repossessed collateral is sold at auction on or about the date
repossessed.
Discounts and premiums on purchased residential real estate loans are amortized
to income using the interest method over the remaining period to contractual
maturity, adjusted for anticipated prepayments. Discounts and premiums on
purchased consumer loans are recognized over the expected lives of the loans
using methods that approximate the interest method.
The accrual of interest on impaired loans is discontinued when, in management's
opinion, the borrower may be unable to meet payments as they become due. When
interest accrual is discontinued, all unpaid accrued interest is reversed.
Interest income is subsequently recognized only to the extent cash payments are
received.
Loan origination fees and certain direct origination costs are capitalized and
recognized as an adjustment of the yield of the related loan.
F-10
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
Allowance for Credit Losses
---------------------------
The allowance for credit losses is increased by charges to earnings and
decreased by charge-offs (net of recoveries). Management's periodic evaluation
of the adequacy of the allowance is based on the Bank's past loan loss
experience, known and inherent risks in the portfolio, adverse situations that
may affect the borrower's ability to repay, the estimated value of any
underlying collateral, and current economic conditions.
Bank Premises and Equipment
---------------------------
Bank premises and equipment are stated at cost less allowances for depreciation
and amortization. Depreciation and amortization are computed primarily using
the straight-line method over the estimated useful lives of the assets, which
generally are 3 to 15 years for equipment, and over the shorter of the lease
terms or the estimated lives of the leasehold improvements.
Expenditures for repairs and maintenance are charged to operations while
expenditures for major replacements and betterments are capitalized. When
property and equipment are retired or sold, their cost and accumulated
depreciation and amortization are removed from the property accounts and the
resulting gain or loss is recorded in current operations at the date of
disposal.
Off-Balance Sheet Financial Instruments
---------------------------------------
In the ordinary course of business, the Bank has entered into off-balance sheet
financial instruments consisting of commitments to extend credit, commercial
letters of credit and standby letters of credit. Such financial instruments
are recorded in the financial statements when they are funded.
Income Taxes
------------
Beginning January 1, 1998, the Company elected to be taxed as an S Corporation.
At that date, payment of income taxes became the responsibility of the
shareholders. The Company may incur income taxes within the first ten years as
it relates to any "built in gain." If the Company disposes of assets that were
owned on the date of election to be taxed as an S Corporation and there is a
gain, the Company would pay income taxes on the difference in the tax basis and
the fair value (built in gain) at the date of election to be taxed as an S
Corporation.
Prior to 1998, provisions for income taxes were based on amounts reported in
the Consolidated Statements of Earnings (after exclusion of non-taxable income)
and included deferred taxes on temporary differences in the recognition of
income and expense for tax and financial statement purposes. Deferred taxes
were computed by the liability method at currently enacted income tax rates as
applicable to the period in which the deferred tax assets and liabilities were
expected to be realized or settled.
F-11
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE A - NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
Earnings Per Share
-------------------
Basic earnings per share is computed by dividing earnings available to common
shareholders by the weighted average number of common shares outstanding, which
was 204,000 shares for the six months ended June 30, 1999 and 1998 and for the
years ended December 31, 1998, 1997 and 1996. There are no potentially
dilutive securities.
Reclassifications
-----------------
Certain reclassifications have been made to the consolidated financial
statements in order to conform to the 1998 presentation.
New Accounting Standard
-----------------------
In June 1997, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"), which requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value. The statement
is effective January 1, 2001 for the Company and management believes it will
not have a material effect on the consolidated financial statements of the
Company.
NOTE B - SECURITIES AVAILABLE FOR SALE
The carrying amounts of investment securities and their approximate fair values
follows:
<TABLE>
<CAPTION>
June 30, 1999
---------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
--------- ---------- ---------- -------
<S> <C> <C> <C> <C>
U.S. Government securities $10,881 $ - $72 $10,809
U.S. Government agency securities 92 - 1 91
Mortgage-backed securities 5,220 - 5 5,215
Municipal bonds 2,528 18 - 2,546
------- ---------- --- -------
$18,721 $18 $78 $18,661
======= ========== === =======
</TABLE>
F-12
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE B - SECURITIES AVAILABLE FOR SALE - Continued
<TABLE>
<CAPTION>
December 31, 1998
----------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
--------- ---------- ----------- -------
<S> <C> <C> <C> <C>
U.S. Government securities $ 2,498 $ 34 $ - $ 2,532
U.S. Government agency securities 2,127 2 - 2,129
Mortgage-backed securities 8,392 97 - 8,489
Municipal bonds 2,675 65 - 2,740
------- ---- ---------- -------
$15,692 $198 $ - $15,890
======= ==== ========== =======
December 31, 1997
--------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
cost gains losses value
------- ---- ---------- -------
U.S. Government securities $ 4,196 $ 31 $ - $ 4,227
U.S. Government agency securities 3,943 13 - 3,956
Mortgage-backed securities 14,867 85 (17) 14,935
Municipal bonds 2,687 33 - 2,720
------- ---- ---------- -------
$25,693 $162 $(17) $25,838
======= ==== ========== =======
</TABLE>
At June 30, 1999 and December 31, 1998 and 1997, securities carried at
approximately $500,000 were pledged to secure public deposits and for other
purposes as required or permitted by law.
The scheduled maturities of U.S. Government securities, agency securities and
municipal bonds at June 30, 1999, were as follows:
Amortized Fair
cost value
--------- -------
Due in one year or less $ 7,464 $ 7,425
Due from one to five years 10,562 10,543
Due from five to ten years 695 693
------- -------
$18,721 $18,661
======= =======
F-13
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE B - SECURITIES AVAILABLE FOR SALE - CONTINUED
Expected maturities of mortgage-backed securities may differ from contractual
maturities because borrowers have the right to call or prepay obligations with
or without call or prepayment penalties. Maturities of mortgage-backed
securities are not included in the scheduled maturities.
There were no gross realized gains and gross realized losses on sales of
securities available for sale for the six months ended June 30, 1999 and 1998
and for the year ended December 31, 1998.
Gross realized gains and gross realized losses in 1997 were $-0- and $9,
respectively, and in 1996 were $30 and $1, respectively.
NOTE C - LOANS
The components of loans were as follows:
<TABLE>
<CAPTION>
December 31,
---------------------
June 30, 1999 1998 1997
-------------- --------- ---------
<S> <C> <C> <C>
Consumer automobile $202,902 $214,186 $189,636
Consumer real estate 33,647 36,778 25,245
Other consumer 11,051 13,022 342
Commercial 26,792 25,323 25,731
-------- -------- --------
274,392 289,309 240,954
Unearned discount on consumer automobile (30,340) (29,507) (29,399)
Purchase discounts (17,360) (21,600) (14,682)
Allowance for credit losses (5,407) (4,484) (5,097)
-------- -------- --------
$221,285 $233,718 $191,776
======== ======== ========
</TABLE>
F-14
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE C - LOANS - CONTINUED
An analysis of the change in the allowance for credit losses follows:
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
------------------- ------------------------------
1999 1998 1998 1997 1996
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance at beginning of year $ 4,484 $ 5,097 $ 5,097 $ 3,737 $ 2,141
Loans charged off, net of recoveries (2,368) (2,427) (5,949) (3,523) (1,337)
Provision for credit losses 3,291 2,565 5,336 4,883 2,933
------- ------- ------- ------- -------
Balance at end of year $ 5,407 $ 5,235 $ 4,484 $ 5,097 $ 3,737
======= ======= ======= ======= =======
</TABLE>
The Bank purchases individual loans and loan pools from the FDIC (Federal
Deposit Insurance Corporation) and other entities at a discount. Loans
purchased as of June 30, 1999 and in 1998, 1997 and 1996, net of discount,
totaled approximately $4,557, $62,509, $34,610 and $1,845, respectively.
Purchased nonperforming loans, net of discount, of approximately $1,134, $1,168
and $523 are on nonaccrual status at June 30, 1999 and December 31, 1998 and
1997, respectively. Loans originated or purchased as performing which have
subsequently become impaired totaled approximately $2,958, $4,398 and $2,465 at
June 30, 1999 and December 31, 1998 and 1997, respectively. The total
allowance for loan losses related to impaired loans was $70, $101 and $57 at
June 30, 1999 and December 31, 1998 and 1997, respectively.
NOTE D - BANK PREMISES AND EQUIPMENT
Components of bank premises and equipment were as follows:
<TABLE>
<CAPTION>
December 31,
---------------
June 30, 1999 1998 1997
------------- ------ ------
<S> <C> <C> <C>
Furniture and equipment $1,745 $1,485 $ 923
Vehicles 115 118 123
Leasehold improvements 126 73 48
Other 247 238 214
------ ------ ------
2,233 1,914 1,308
Less accumulated depreciation and
amortization 1,149 930 671
------ ------ ------
$1,084 $ 984 $ 637
====== ====== ======
</TABLE>
F-15
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE E - DEPOSITS
The components of deposits were as follows:
December 31,
-------------------
June 30, 1999 1998 1997
------------- -------- --------
Demand accounts $ 10,524 $ 10,662 $ 8,793
NOW accounts 3,328 3,587 2,510
Savings accounts 1,410 1,359 1,359
Money market accounts 3,411 3,421 3,929
Certificates of deposit 227,103 233,699 200,106
-------- -------- --------
$245,776 $252,728 $216,697
======== ======== ========
Included in interest bearing deposits are certificates of deposit in amounts of
$100 or more totaling $43,817, $44,548 and $38,926 at June 30, 1999 and
December 31, 1998 and 1997, respectively.
The scheduled maturities of certificates of deposit at December 31, 1998 are as
follows:
1999 $113,304
2000 95,172
2001 20,542
2002 1,674
2003 and thereafter 3,007
--------
$233,699
========
F-16
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE F - BORROWINGS
Borrowings consisted of the following:
<TABLE>
<CAPTION>
December 31,
------------------
June 30, 1999 1998 1997
------------- ------- -------
<S> <C> <C> <C>
Note payable to a commercial bank; maturing annually
(June 30, 1999 and 1998); interest at 8.5% at
December 31, 1998 and 1997; collateralized by
204,000 shares of the Bank's common stock and
personal guarantees of the Company's shareholders. $ 2,424 $ 2,424 $2,424
Advance from Federal Home Loan Bank of Dallas;
maturing December 3, 2001; interest at 6.03%,
payable monthly. 2,000 2,000 2,000
Advance from Federal Home Loan Bank of Dallas;
maturing June 1, 2000; interest at 6.067%,
payable monthly. 1,800 1,800 1,800
Advance from Federal Home Loan Bank of Dallas;
maturing December 2, 2002; interest at 6.05%,
payable monthly. 1,500 1,500 1,500
Advance from Federal Home Loan Bank of Dallas;
maturing December 1, 2003; interest at 6.07%,
payable monthly. 1,500 1,500 1,500
Note payable to a commercial bank; maturing September
30, 2000; interest at 8.05% at December 31, 1998 and
1997; collateralized by 204,000 shares of the Bank's
common stock and personal guarantees of the
Company's shareholders; principal payments of $150
due quarterly. 900 1,200 1,800
Advance from Federal Home Loan Bank of Dallas;
maturing December 1, 2000; interest at 5.99%,
payable monthly. 1,200 1,200 1,200
------- ------- -------
$11,324 $11,624 $12,224
======= ======= =======
</TABLE>
F-17
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE F - BORROWINGS- CONTINUED
Scheduled maturities of borrowings at December 31, 1998, were as follows:
1999 $ 2,424
2000 4,200
2001 2,000
2002 1,500
2003 1,500
-------
$11,624
=======
All Federal Home Loan Bank of Dallas (FHLB) advances are collateralized by
the FHLB capital stock and mortgage loans.
NOTE G - COMMITMENTS
The Bank has noncancellable operating lease agreements related to its branch
operations, loan production offices, and administrative offices. The leases
expire at various times between 1999 and 2007. The leases typically may be
renewed for similar terms.
Following is a schedule by year of future minimum rental payments required
under the operating leases for office space that have initial or remaining
noncancellable lease terms in excess of one year as of December 31, 1998:
1999 $ 633
2000 651
2001 569
2002 444
2003 and later 1,972
------
Total minimum lease payments $4,269
======
Rent expense was $339 and $254 for the six months ended June 30, 1999 and 1998
and $569, $390 and $303 for the years ended December 31, 1998, 1997 and 1996,
respectively.
F-18
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE H - INCOME TAXES
Effective January 1, 1998, the shareholders elected to be taxed as an S
Corporation. The election permits the earnings of the Company to be taxed to
the shareholders. There is no impact on the financial statements prior to
January 1, 1998, but in 1998 the deferred tax assets were written off as a
result of this election. Subsequent to the date of the election, retained
earnings of the Company include undistributed previously taxed income.
The consolidated provision for income taxes for the periods indicated consisted
of the following:
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
------------------- --------------------------
<S> <C> <C> <C> <C> <C>
1999 1998 1998 1997 1996
------ ------ ------ ------ ------
Currently payable $ 12 $ 817 $ 829 $1,653 $2,170
Deferred taxes - 1,009 1,009 151 (606)
------ ------ ------ ------ ------
$ 12 $1,826 $1,838 $1,804 $1,564
====== ====== ======= ====== ======
A reconciliation between taxes computed at the federal statutory rate and the
consolidated effective tax rate follows:
Six months ended
June 30, Year ended December 31,
------------------- --------------------------
1999 1998 1998 1997 1996
------ ------ ------ ------ ------
Federal statutory tax rate at 34% $ 1,034 $1,263 $ 2,230 $1,738 $1,449
State taxes 12 25 43 53 103
Income not taxable corporately due
to election of S Corporation (1,034) (471) (1,444) - -
Write-off of deferred tax assets - 1,009 1,009 - -
Other - - - 13 12
------- ------ ------- ------ ------
$ 12 $1,826 $ 1,838 $1,804 $1,564
======= ====== ======= ====== ======
</TABLE>
F-19
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE H - INCOME TAXES - CONTINUED
The Company had net deferred tax assets and liabilities resulting from
cumulative temporary differences at December 31:
1997 1996
------- -------
Deferred tax assets
Allowance for credit losses $ 901 $ 935
Deferral of incentive bonuses 113 105
Deferral of loan pool income 46 128
Other 16 17
------ ------
1,076 1,185
Deferred tax liabilities
Depreciation (18) (25)
Unrealized gain on securities available for sale (49) -
------ ------
(67) (25)
------ ------
Net deferred tax asset $1,009 $1,160
====== ======
NOTE I - RELATED PARTY TRANSACTIONS
The Company enters into transactions with its directors, significant
shareholders and their affiliates (related parties). The aggregate amount of
loans to such related parties at June 30, 1999 and December 31, 1998 and 1997
was $863, $641 and $745, respectively. During 1999, new loans to such related
parties amounted to $546 and repayments amounted to $324.
In addition to the above term loans, there is a $750 line of credit with an
outstanding balance of $591, at June 30, 1999 and a $650 line of credit with an
outstanding balance of $545 and $434 at December 31, 1998 and 1997,
respectively.
In 1995, a shareholder participated in the purchase of nonperforming loans to
minimize risk to the Bank. The amount of the participation was approximately
$96, $144 and $201 at June 30, 1999 and December 31, 1998 and 1997,
respectively. The shareholder bears 50% of the collection and related expenses
pertaining to these loans.
The Bank also held approximately $3,220, $3,075 and $3,300 in deposits for
directors, officers, employees and their related entities at June 30, 1999 and
December 31, 1998 and 1997.
In 1997, the Bank entered into a lease for office space that is partially owned
by a major shareholder. The lease expires September 30, 1999 and provides for
monthly rent of approximately $4.
F-20
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE J - OFF-BALANCE SHEET FINANCIAL INSTRUMENTS
The Company's consolidated financial statements do not reflect various
outstanding commitments and contingent liabilities which arise in the normal
course of business and which involve elements of credit risk, interest rate
risk and liquidity risk. These commitments and contingent liabilities are
commitments to extend credit and standby letters of credit.
A summary of the Bank's commitments and contingent liabilities follows:
December 31,
---------------
June 30, 1999 1998 1997
------------- ------ ------
Commitments to extend credit $7,786 $6,143 $5,226
Standby letters of credit 251 251 247
Commitments to extend credit and standby letters of credit include exposure to
some credit loss in the event of nonperformance of the customer. The Bank's
credit policies and procedures for credit commitment and financial guarantees
are the same as those for extension of credit that are recorded in the
consolidated balance sheet. Because these instruments have fixed maturity
dates, and because many of them expire without being drawn upon, they do not
generally present any significant liquidity risk to the Bank. The Bank was not
required to perform on any financial guarantees nor did it incur any losses on
its commitments for the periods ended June 30, 1999 and December 31, 1998 and
1997.
NOTE K - CONCENTRATION OF CREDIT RISK
At December 31, 1998, approximately 41% of the Bank's loans are to customers in
the metropolitan New Orleans area, approximately 33% are to customers outside
of New Orleans but in the state of Louisiana, and the balance are to customers
in other states. The Bank, as a matter of policy, does not extend credit to
any single borrower or group of related borrowers in excess of 30% and 20% of
the Bank's regulatory capital for secured and unsecured lending, respectively.
F-21
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE L - FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments were as
follows:
<TABLE>
<CAPTION>
December 31,
-------------------------------------------
June 30, 1999 1998 1997
------------------------- -------------------- --------------------
Carrying Fair Carrying Fair Carrying Fair
value value value value value value
------------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Financial assets
Cash and due from banks $ 2,122 $ 2,122 $ 3,637 $ 3,637 $ 2,504 $ 2,504
Federal funds sold 29,030 29,030 23,280 23,280 17,345 17,345
Securities available for sale 18,661 18,661 15,890 15,890 25,838 25,838
FHLB stock 867 867 844 844 796 796
Mortgage loans held for sale 453 453 1,577 1,577 2,517 2,517
Loans, net 221,285 228,104 233,718 240,920 191,776 197,088
Financial liabilities
Deposits 245,776 249,490 252,728 257,543 216,697 218,018
Notes payable 11,324 11,324 11,624 12,292 12,224 12,297
Off-balance sheet assets (liabilities)
Commitments to extend credit - (55) - 45) - (49)
Commercial letters of credit - (22) - (17) - (4)
Standby letters of credit - (2) - (2) - (2)
</TABLE>
When quoted market prices are not available, fair values are estimated using
present value or other valuation techniques. The results of these techniques
are highly sensitive to the assumptions used, such as those concerning
appropriate discount rates and estimates of future cash flows, which require
considerable judgment. Accordingly, the estimates presented are not
necessarily indicative of the amounts the Company could realize in a current
settlement of the financial instruments and all nonfinancial instruments are
excluded from fair value disclosure requirements. The aggregate fair value
amounts presented do not represent the underlying value of the Company.
NOTE M - REGULATORY MATTERS
The Bank, as a state chartered bank, is subject to the dividend restrictions
set forth by the Federal Deposit Insurance Corporation (FDIC) and the Louisiana
Office of Financial Institutions (OFI). Under such restrictions, the Bank may
not, without the prior approval of the regulators, declare dividends in excess
of the sum of the current year's earnings (as defined) plus the retained
earnings (as defined) from the prior year. At June 30, 1999, approximately
$2,600 of retained earnings were available for dividend declaration without
prior regulatory approval.
F-22
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE M - REGULATORY MATTERS - CONTINUED
The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet the minimum capital requirements
can initiate certain mandatory, and possibly additional discretionary actions
by regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classifications are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.
Quantitative measures established by regulation to ensure capital adequacy
require the Bank to maintain minimum amounts and ratios (set forth in the table
below) of total and Tier I capital to risk-weighted assets, and of Tier I
capital to average assets (all terms as defined in the regulations).
Management believes, as of June 30, 1999, that the Bank met all capital
adequacy requirements to which it is subject.
As of June 30, 1999, the most recent notification from the Federal Deposit
Insurance Corporation categorized the Bank as well capitalized under the
regulatory framework for prompt corrective action. To be categorized as well
capitalized, the Bank must maintain minimum total risk-based, Tier I risk-
based, and Tier I leverage ratios as set forth in the table below. There are
no conditions or events since that notification that management believes have
changed the Bank's category.
The Bank's actual capital amounts and ratios are presented in the following
tables:
<TABLE>
<CAPTION>
To be well
For capital capitalized under
adequacy prompt corrective
Actual purposes action provisions
---------------- ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------ ------- ------- -------- ------
June 30, 1999
-------------
<S> <C> <C> <C> <C> <C> <C>
Total capital (to risk weighted assets)
Company $20,341 8.9% $18,266 * 8.0% N/A
Bank 23,628 10.4 18,233 * 8.0 $22,791 * 10.0%
Tier I capital (to risk weighted assets)
Company 17,455 7.6 9,133 * 4.0 N/A
Bank 20,747 9.1 9,117 * 4.0 13,675 * 6.0
Tier I capital (to average assets)
Company 17,455 6.2 11,198 * 4.0 N/A
Bank 20,747 7.4 11,197 * 4.0 13,996 * 5.0
</TABLE>
- ----------------------
* Greater than or Equal to
F-23
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE M - REGULATORY MATTERS - CONTINUED
<TABLE>
<CAPTION>
To be adequately
For capital capitalized under
adequacy prompt corrective
Actual purposes action provisions
------------------ ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
December 31, 1998
- -----------------
Total capital (to risk weighted assets)
Company $19,514 8.0% $19,417 * 8.0% N/A
Bank 23,012 9.5 19,410 * 8.0 $19,410 * 8.0%
Tier I capital (to risk weighted assets)
Company 16,462 6.8 9,708 * 4.0 N/A
Bank 19,961 8.2 9,705 * 4.0 9,705 * 4.0
Tier I capital (to average assets)
Company 16,462 6.0 11,043 * 4.0 N/A
Bank 19,961 7.2 11,043 * 4.0 11,043 * 4.0
To be well
For capital capitalized under
adequacy prompt corrective
Actual purposes action provisions
------------------ ----------------- ------------------
Amount Ratio Amount Ratio Amount Ratio
------- ------- ------- -------- ------- -------
December 31, 1997
-----------------
Total capital (to risk weighted assets)
Company $16,547 8.3% $16,116 * 8.0% N/A
Bank 20,707 10.4 15,937 * 8.0 $19,921 * 10.0%
Tier I capital (to risk weighted assets)
Company 14,029 7.0 8,058 * 4.0 N/A
Bank 18,189 9.1 7,969 * 4.0 11,953 * 6.0
Tier I capital (to average assets)
Company 14,029 6.3 8,894 * 4.0 N/A
Bank 18,189 8.2 8,894 * 4.0 11,116 * 5.0
- ------------------------
* Greater than or Equal to
</TABLE>
F-24
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE N - EMPLOYEE RETIREMENT PLAN
The Bank has a contributory 401(k) retirement plan. All employees who have
attained the age of 21 and have completed three months of service are eligible
to participate. The Bank matches 50% of the employee's contribution (limited
to 4% of their annual compensation) and has the discretion to contribute an
additional amount based upon the Bank's profitability. For the periods ended
June 30, 1999 and 1998 and in 1998 and 1997, this discretionary contribution
was 1% of each employee's annual compensation. The employees vest in the
employer's contributions 20% a year for five years. Employer contributions were
$72 and $65 for the six months ended June 30, 1999 and 1998 and $135, $100 and
$81 for 1998, 1997 and 1996, respectively.
NOTE O - COMPREHENSIVE INCOME
The Company adopted SFAS No. 130, "Reporting Comprehensive Income," as of
January 1, 1998. Accounting principles generally require that recognized
revenue, expenses, gains and losses be included in net earnings. Although
certain changes in assets and liabilities, such as unrealized gains and losses
on available for sale securities, are reported as a separate component of the
equity section of the balance sheet, such items, along with net earnings, are
components of comprehensive income. The adoption of SFAS No. 130 had no effect
on the Company's net earnings or shareholders' equity.
<TABLE>
<CAPTION>
Year ended December 31,
Six months ended -------------------------
June 30, 1999 1998 1997 1996
----------------- ------ ------ -------
<S> <C> <C> <C> <C>
Unrealized holding gains (losses) arising
during the period on available for sale
securities $(258) $ 105 $ 173 $(202)
Reclassification adjustments for gains
(losses) realized in net earnings - - (9) 29
----- ----- ----- -----
Net unrealized gains (258) 105 164 (173)
Tax effect - - (56) 59
----- ----- ----- -----
Net of tax $(258) $ 105 $ 108 $(114)
===== ===== ===== =====
</TABLE>
F-25
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE P - CB&T HOLDING CORPORATION
The following condensed balance sheets, statements of earnings and statements
of cash flows reflect the financial position, results of operations and cash
flows for the parent company only:
CONDENSED BALANCE SHEETS
December 31,
-----------------
June 30, 1999 1998 1997
------------- ------- -------
Assets
Cash and due from banks $ 14 $ 107 $ 61
Investment in bank subsidiary 20,689 20,161 18,285
Refundable income taxes - - 131
Other assets 28 28 10
------- ------- -------
$20,731 $20,296 $18,487
======= ======= =======
Liabilities and shareholders' equity
Accrued interest payable $ 10 $ 10 $ 1
Notes payable 3,324 3,624 4,224
Due to subsidiaries - - 137
------- ------- -------
Total liabilities 3,334 3,634 4,362
Shareholders' equity 17,397 16,662 14,125
------- ------- -------
$20,731 $20,296 $18,487
======= ======= =======
F-26
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE P - CB&T HOLDING CORPORATION - CONTINUED
CONDENSED STATEMENTS OF EARNINGS
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
--------------- --------------------------
1999 1998 1998 1997 1996
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Income
Equity in undistributed earnings
of subsidiaries, net $ 786 $ 785 $1,771 $3,043 $2,778
Dividends from Bank subsidiary 2,371 1,325 3,325 131 247
------ ------ ------ ------ ------
3,157 2,110 5,096 3,174 3,025
Expenses
Interest expense on notes payable 127 172 323 186 168
Other expenses 1 25 28 32 26
------ ------ ------ ------ ------
128 197 351 218 194
------ ------ ------ ------ ------
Earnings before income taxes 3,029 1,913 4,745 2,956 2,831
Income tax expense (benefit) - 23 23 (67) (66)
------ ------ ------ ------ ------
Net earnings $3,029 $1,890 $4,722 $3,023 $2,897
====== ====== ====== ====== ======
</TABLE>
F-27
<PAGE>
CB&T HOLDING CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
(dollars in thousands)
NOTE P - CB&T HOLDING CORPORATION - CONTINUED
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended
June 30, Year ended December 31,
------------------ ------------------------------
1999 1998 1998 1997 1996
-------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities
Net earnings $ 3,029 $1,890 $ 4,722 $ 3,023 $ 2,897
Adjustment for equity in
subsidiaries' undistributed
net earnings (786) (785) (1,771) (3,043) (2,778)
Other adjustments - 92 (15) 83 (71)
------- ------ ------- ------- -------
Net cash provided by
operating activities 2,243 1,197 2,936 63 48
Cash used in investing activities
Additional investment in
subsidiaries - - - (2,210) -
Cash flows from financing activities
Repayment of bank subsidiary
advances - - - (293) -
Advances from bank subsidiary - - - 229 -
Proceeds from note payable - - - 2,224 -
Dividends paid (2,036) (793) (2,290) - -
Payments on notes payable (300) (150) (600) - -
------- ------ ------- ------- -------
Net cash (used in) provided
by financing activities (2,336) (943) (2,890) 2,160 -
------- ------ ------- ------- -------
Net (decrease) increase in cash and
due from banks (93) 254 46 13 48
Cash and due from banks,
beginning of period 107 61 61 48 -
------- ------ ------- ------- -------
Cash and due from banks,
end of period $ 14 $ 315 $ 107 $ 61 $ 48
======= ====== ======= ======= =======
</TABLE>
F-28
<PAGE>
You should rely only on the information contained in this prospectus. We have
not authorized anyone to provide you with information that is different. Neither
the delivery of this prospectus nor any sale made under this prospectus shall
imply, under any circumstances, that there has been no change in the affairs of
CB&T or the trust since any of the dates as of which information is furnished
herein or since the date of this prospectus. We are not offering to sell or
soliciting an offer to buy any securities other than the registered securities
to which this prospectus relates. This prospectus is not an offer to sell these
securities and it is not soliciting an offer to buy these securities in any
circumstances in which such offer or solicitation is not permitted.
Table of contents
page
Summary 3
Risk Factors 10
Our Forward-Looking Statements Are Subject to Change 17
Market for the Preferred Securities 17
How Our Net Proceeds Will Be Used 18
Accounting and Regulatory Treatment 18
Our Capitalization 19
Our Dividend Policy 20
Selected Consolidated Financial and Other Data 21
Management's Discussion and Analysis of Financial Condition
and Results of Operations 24
Business of CB&T 44
Regulation 71
Taxation 78
Management of CB&T 80
CB&T Shareholders 84
Description of the Trust 85
Description of the Preferred Securities 86
Description of the Junior Subordinated Debentures 100
Description of the Guarantee 112
Relationship Among the Preferred Securities, the Junior
Subordinated Debentures, the Expense Agreement and the Guarantee 115
Federal Income Tax Consequences 117
ERISA Considerations 121
Underwriting 122
Validity of Securities 123
Experts 124
Reports of CB&T 124
Where You Can Find More Information 124
Index to Consolidated Financial Statements 126
$10,000,000
Crescent Capital Trust
_____% Trust Preferred Securities
Guaranteed by
CB&T Holding Corporation
PROSPECTUS
[Ryan, Beck Logo]
_____, 1999
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
SEC registration fee................... $ 3,197
NASD fee............................... 1,650
American Stock Exchange listing fees... 15,000
Trustees' fees and expenses............ 18,500*
Legal fees............................. 110,000*
Accounting fees and expenses........... 100,000*
Printing expenses...................... 35,000*
Underwriter's expenses(1):
Legal fees and expenses............. 75,000*
Other out-of-pocket expenses........ 20,000*
Miscellaneous expenses................. 21,653*
--------
Total............................... $400,000*
========
____________
* Estimated.
(1) Does not include the underwriting fee to be paid, which is currently
estimated to be approximately 4% of the offering, or $400,000 if the over-
allotment option is not exercised and $460,000 if the over-allotment option
is exercised in full. The exact amount will be determined by negotiation
when the underwriting agreement is executed.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
In accordance with the Business Corporation Law of Louisiana,
Article XII of the CB&T Holding Corporation (the "Corporation") Articles of
Incorporation provides as follows:
ARTICLE XII
INDEMNIFICATION
SECTION 1. The corporation shall indemnify its directors and
officers, whether serving the corporation or, at its request, any other entity,
in any capacity, to the full extent required or permitted by Louisiana law now
or hereafter in force, including the advance of expenses under the procedures
and to the full extent permitted by law.
II-1
<PAGE>
SECTION 2. The corporation may indemnify other employees and agents
to such extent as shall be authorized by the Board of Directors and be permitted
by law.
SECTION 3. The foregoing rights of indemnification shall not be
exclusive of any other rights to which those seeking indemnification may be
entitled and shall continue as to a person who has ceased to be an officer,
director, agent or employee, and shall inure to the benefit of the heirs,
executors and administrators of such person.
SECTION 4. The Board of Directors may take such action as is
necessary to carry out these indemnification provisions and is expressly
empowered to adopt, approve and amend from time to time such resolutions or
contracts implementing such provisions or such further indemnification
arrangements as may be permitted by law.
SECTION 5. No amendment or repeal of this Article of the
Corporation's Articles of Incorporation shall apply to or have any effect on any
right to indemnification provided hereunder with respect to acts or omissions
occurring prior to such amendment or repeal.
Section 40 of the Corporation's Bylaws provides as follows:
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 40. This corporation shall indemnify any person who was or is
a party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (including any action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another business, foreign or non-profit corporation, partnership, joint venture
or other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonable incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided that in case of
actions by or in the right of the corporation, the indemnity shall be limited to
expenses (including attorney's fees, and amounts paid in settlement not
exceeding, in the judgment of the Board of Directors, the estimated expense of
litigating the action to conclusion) actually and reasonably incurred in
connection with the defense or settlement of such action and no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the court shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, he is fairly and
reasonably entitled indemnify for such expenses which the court shall deem
proper. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests
II-2
<PAGE>
of the corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful. This corporation may
procure insurance, and may pay premium therefor, in order to insure against the
liabilities herein undertaken.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
II-3
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1* Form of Underwriting Agreement
3.1 Articles of Incorporation of the Corporation
3.2 By-Laws of the Corporation
4.1 Indenture of the Corporation relating to the Junior
Subordinated Debentures
4.2 Form of Certificate of Junior Subordinated Debenture
(included as Exhibit A to Exhibit 4.1)
4.3 Certificate of Trust of Crescent Capital Trust I
4.4 Form of Amended and Restated Trust Agreement of Crescent
Capital Trust I
4.5 Form of Trust Preferred Security Certificate for Crescent
Capital Trust I
4.6 Form of Guarantee of the Corporation relating to the Trust
Preferred Securities
5.1 Opinion and consent of Elias, Matz, Tiernan & Herrick
L.L.P. as to legality of the Junior Subordinated Debentures and the
Guarantee to be issued by the Corporation
5.2 Opinion and consent of Richards, Layton & Finger, P.A. as to
legality of the Trust Preferred Securities to be issued by Crescent
Capital Trust I
8.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to
certain federal income tax matters
10.1 1999 Supplemental Executive Compensation Plan
10.2 Consulting Agreement between Crescent Bank and Henry M.
Wallis dated December 28, 1997
10.3 Consulting Agreement between Crescent Bank and Daniel
Buckman dated December 16, 1998
12.1 Computation of ratio of earnings to fixed charges
21.1 Subsidiaries of the Corporation
23.1 Consent of Grant Thornton LLP
23.2 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included
in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger, P.A. (included in
Exhibit 5.2)
23.4 Consent of Roth Murphy Sanford L.L.P.
24.1 Power of Attorney of certain officers and directors of the
Corporation (located on the signature page to Form S-1)
25.1 Form T-1 Statement of Eligibility of Wilmington Trust
Company to act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of Wilmington Trust Company to
act as trustee under the Declaration of Trust of Crescent Capital
Trust I
25.3 Form T-1 Statement of Eligibility of Wilmington Trust
Company under the Guarantee for the benefit of the holders of the
Trust Preferred Securities
27.1 Financial Data Schedules
_____________
* To be filed by amendment.
II-4
<PAGE>
(b) Financial Statement Schedules
All schedules have been omitted as not applicable or not required under the
rules of Regulation S-X.
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, trustees, officers and
controlling persons of the Registrants pursuant to the foregoing provisions, or
otherwise, the Registrants have been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such
II-5
<PAGE>
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, trustee, officer or controlling person of the Registrants in
the successful defense of any action, suit or proceeding) is asserted by such
director, trustee, officer or controlling person in connection with the
securities being registered, the Registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
them is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act of 1933 shall be deemed to be part of this registration
statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of New
Orleans, State of Louisiana on the 26th day of August 1999.
CB&T HOLDING CORPORATION
By: /s/ Gary N. Solomon
-------------------------------
Gary N. Solomon
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature appears
below hereby makes, constitutes and appoints Gary N. Solomon his or her true and
lawful attorney, with full power to sign for such person and in such person's
name and capacity indicated below, and with full power of substitution any and
all amendments to this registration statement, hereby ratifying and confirming
such person's signature as it may be signed by said attorney to any and all
amendments.
Name Title Date
---- ----- ----
/s/ Gary N. Solomon Chairman of the Board and August 26, 1999
- ------------------------- Chief Executive Officer
Gary N. Solomon (principal executive officer)
/s/ Paul R. Trapani, Jr. Executive Vice President and August 26, 1999
- ------------------------- Chief Operating Officer
Paul R. Trapani, Jr.
/s/ F. William Haacke, Jr Vice President and Chief August 26, 1999
- ------------------------- Financial Officer
F. William Haacke, Jr. (principal financial and
accounting officer)
/s/ Ronald P. Briggs Director August 26, 1999
- -------------------------
Ronald P. Briggs
II-7
<PAGE>
/s/ Daniel B. Buckman Director August 26, 1999
- -------------------------
Daniel B. Buckman
/s/ John A. Meltzer Director August 26, 1999
- -------------------------
John A. Meltzer
/s/ Fred B. Morgan, III Director and President August 26, 1999
- -------------------------
Fred B. Morgan, III
/s/ Robert L. Redfearn Director August 26, 1999
- -------------------------
Robert L. Redfearn
/s/ Martha N. Solomon Director August 26, 1999
- -------------------------
Martha N. Solomon
II-8
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Crescent
Capital Trust I has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the city of New
Orleans, State of Louisiana on the 26th day of August 1999.
CRESCENT CAPITAL TRUST I
By: /s/ Gary N. Solomon
------------------------------------
Gary N. Solomon
Administrative Trustee
By: /s/ Paul R. Trapani, Jr.
------------------------------------
Paul R. Trapani, Jr.
Administrative Trustee
By: /s/ F. William Haacke, Jr.
------------------------------------
F. William Haacke, Jr.
Administrative Trustee
II-9
<PAGE>
Exhibit 3.1
STATE OF LOUISIANA
PARISH OF ORLEANS
ARTICLES OF INCORPORATION
OF
CB&T HOLDING CORPORATION
The undersigned incorporator, Gary N. Solomon, does by these presents form
and organize a corporation, pursuant to the provisions of the Business
Corporation Law of Louisiana, Chapter 1 of Title 12 of the Louisiana Revised
Statutes of 1950, as amended, and in accordance with the following Articles of
Incorporation, to-wit:
ARTICLE I
---------
NAME
The name of this corporation is:
CB&T HOLDING CORPORATION
ARTICLE II
----------
PURPOSE
The objects and purposes for which this corporation is organized and the
nature of the business to be carried on by it are stated and declared to be to
engage in any lawful activity, for which corporations organized under the laws
of the State of Louisiana, and the Business Corporation Law of Louisiana, may
engage, and to the extent not prohibited thereby, to enter into and engage in
any kind of business or lawful activity of any nature whatsoever in any other
state of the United States of America, any foreign nation, and any territory of
any country to the extent
1
<PAGE>
permitted by the law of such other state, nation, or territory.
ARTICLE III
-----------
DURATION
The duration of the corporation shall be perpetual.
ARTICLE IV
----------
CAPITAL
The aggregate number of shares which the corporation shall have authority
to issue shall be Five Million (5,000,000), all of the same class, and all with
Two Dollar and Fifty Cent ($2.50) par value.
ARTICLE V
---------
ISSUANCE OF STOCK
Without any necessity of action by the shareholders, previously authorized
but unissued shares of stock of the corporation may be issued from time to time
by the Board of Directors, and any and all shares so issued and paid for, shall
be deemed fully paid stock and not liable to any further assessment or call, and
the holder of such shares shall not be liable for any further payment thereon;
provided, that shareholders shall have preemptive rights for all issuances of
shares pursuant to the terms set forth in Section 72 of the Louisiana Business
Corporation Law (the "LBCL"), except that the provisions of Section 72.A(2) of
the LBCL shall not be applicable to this corporation.
2
<PAGE>
ARTICLE VI
----------
SPECIAL MEETINGS
Special meetings of shareholders may be called by the president, by the
Board of Directors or by any shareholder or shareholders holding in the
aggregate a majority of the total voting power.
ARTICLE VII
-----------
INCORPORATOR
The full name and post office address of the incorporator is as follows:
Gary N. Solomon
6300 Bertha Drive
New Orleans, Louisiana 70112
ARTICLE VIII
------------
CORPORATE ACTION OF SHAREHOLDER
SECTION 1. The affirmative vote of holders of at least three-fourths of the
total voting power shall be necessary for the following corporate action:
(a) Merger or consolidation of the corporation;
(b) Sale, lease, exchange or other disposition of all or substantially all
of the assets of the corporation;
(c) Dissolution of the corporation; and,
(d) Amendment to the articles of incorporation.
SECTION 2. At any meeting called for the purpose of voting on any one or
more of the actions set forth in Section 1 hereinabove, notice of such proposed
action shall be mailed to every stockholder of record at his last known address
at least thirty (30) days prior to such meeting.
3
<PAGE>
ARTICLE IX
----------
SHAREHOLDERS CONSENTS
Whenever the affirmative vote of shareholders is required to authorize or
constitute corporate action, the consent in writing to such action signed only
by shareholders holding that proportion of the total voting power on the
question which is required by law or by these Articles of Incorporation,
whichever requirement is higher, shall be sufficient for the purpose, without
necessity for a meeting of shareholders. If the consent is signed by fewer than
all of the shareholders having voting power on the question, prompt notice shall
be given to all of the shareholders of the action taken pursuant to the consent.
ARTICLE X
---------
DIRECTORS
SECTION 1. Number of Directors. The number of directors of the corporation
shall be such number, not less than five (5) nor more than thirty (30), as may
be designated in the by-laws and, if not designated, as may from time to time be
elected by the shareholders; except, that when all of the outstanding shares are
held of record by fewer than three (3) shareholders, then there need be only as
many directors as shareholders, but this shall not prevent a greater number of
directors as aforesaid.
SECTION 2. Director's Proxies. Any director absent from a meeting of the
Board of Directors or any committee thereof may be represented by any other
director or shareholder, who
4
<PAGE>
may cast the vote of the absent director according to the written instructions,
general or special, of the absent director.
SECTION 3. Quorum. Two-thirds of the members of the Board of Directors
shall constitute a quorum for the transaction of any and all business.
SECTION 4. Qualifications. Each Director shall own in his own right at
least four hundred (400) shares of the common stock of this Corporation. Any
Director who after his election as such shall cease to be the owner in his own
right and unpledged, of the amount of stock as herein aforesaid fixed, shall
resign as a Director of the Corporation at any time prior to the next scheduled
or specially called meeting of the Board of Directors. If the Director does not
so resign, the Board of Directors shall, if they know that a Director has ceased
to maintain such qualification, remove the Director from office at the next
scheduled or specially called meeting of the Board of Directors; provided, that
the Director shall remain in office until such time as the Director resigns or
is so removed.
ARTICLE XI
----------
STOCK RESTRICTIONS
SECTION 1. Securities Laws. In addition to the transfer restrictions set
forth in Section 2 of this Article XI, none of the shares of any of the
shareholders may be transferred unless such transfer shall be made pursuant to
an effective registration statement under the Securities Act of 1933, as
amended, and any applicable state securities laws, or an exemption from such
registration, and prior to any transfer exempt from registration, the
shareholder proposing to transfer shares shall give the Corporation notice
describing the manner and circumstances of the
5
<PAGE>
proposed transfer (copies of which the Corporation shall furnish to each other
shareholder following receipt thereof by the Corporation). The Board of
Directors may require that the shareholder proposing the transfer deliver
contemporaneously with such transfer an opinion of counsel addressed to the
Corporation and its shareholders, in form and substance satisfactory to the
Corporation, that the transfer complies with all applicable federal and state
securities laws.
SECTION 2. Right of First Refusal. In addition to the transfer
restrictions set forth in Section I of this Article XI, no shareholder may
transfer, directly or indirectly, any shares except in compliance with the
following subsections of this Section 2 of this Article XI.
2.01 Offer. Except as provided in Section 2.05, if at any time a shareholder
proposes to sell, assign, or otherwise dispose of all or any part of his
interest in the Corporation pursuant to a written offer, such shareholder (the
"Offeror") shall first make a written offer to sell such interest to the other
shareholders (the "Non-Selling Shareholders") on the same terms and conditions
on which the Offeror proposes to transfer the shares. Such offer shall state the
name of the proposed transferee and all the terms and conditions of the proposed
transfer, including the price to the proposed transferee, and shall be
accompanied by a copy of the offer from the proposed transferee and all related
information either provided by the transferee or accumulated by the Offeror.
2.02 Acceptance of Offer. The Non-Selling Shareholders shall each have the
right for a period of 30 days after receipt of the offer from the Offeror, or
such longer period as may be required under Section 2.04, to elect to purchase
the shares offered, in proportion to their relative share
6
<PAGE>
ownership; provided however, the right to purchase shall not be effective unless
the Non-Selling Shareholders, in the aggregate, elect to purchase at least sixty
(60%) percent of the shares offered. To exercise their rights to purchase, the
Non-Selling Shareholders shall give written notice to the Offeror, which notice
shall be deemed to be given on the date of mailing by certified or registered
mail or, if the notice is not mailed, upon personal delivery to the Offeror.
Upon exercise of the rights to purchase, the purchase shall be closed and
payment made within thirty (30) days after exercise, on the same terms as
applicable to the offer received by the Offeror from the proposed transferee.
2.03 Failure to Accept Offer. If the Non-Selling Shareholders do not elect to
purchase at least sixty (60%) percent of all of the shares offered in accordance
with the provisions of Section 2.02, the Offeror may transfer all of the offered
shares to the proposed transferee named in the offer. If the Non-Selling
Shareholders elect to purchase at least sixty (60%) percent, but not all of, the
shares offered, the Offeror may transfer to the previously identified proposed
transferee all, or any, of the shares which the Non-Selling Shareholders did not
elect to purchase. In all cases, the proposed transferee shall agree in writing
to deliver an opinion of counsel addressed to the Corporation and its
shareholders, in form and substance satisfactory to the Corporation, that the
transfer complies with all applicable federal and state securities laws, said
opinion to be delivered contemporaneously with the transfer. If that transfer
is not made within 90 days after the expiration of the 30-day period provided in
Section 2.02, a new offer shall be made to the Non-Selling Shareholders and the
provisions of this Section 2 of this Article XI shall again apply.
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2.04 Cash Equivalents. If the proposed offer under Section 2.01 is for
consideration other than cash or cash plus deferred payments of cash, the Non-
Selling Shareholders may pay the cash equivalent of such other consideration as
determined by agreement among the Offeror and the Non-Selling Shareholders. If
they cannot agree and such disagreement continues for a period of seven days,
any of the shareholders may, by five days written notice, initiate arbitration
proceedings for determination of the cash equivalent, such proceedings to be
conducted in New Orleans, Louisiana, in accordance with the Expedited Rules of
the American Arbitration Association. The arbitrator shall determine the cash
equivalent without regard to income tax consequences to the Offeror as a result
of receiving cash in lieu of other consideration. The Non-Selling Shareholders,
in their sole discretion, may elect to purchase the interest at the determined
cash equivalent by notice of such election to the Offeror within ten days after
the arbitrator's decision or to withdraw their acceptance of the offer.
2.05 Permitted Transfers. Notwithstanding any other provisions of Section 2 of
this Article XI, a transfer to any one or more lineal descendants (whether by
blood relation or by adoption), or irrevocable trusts established for the sole
benefit of such descendants (such descendants and trusts being hereinafter
collectively referred to as "Permitted Transferees"), shall be permitted without
first offering the interest to the other shareholders or otherwise complying
with this Section 2 of this Article XI. Shareholders holding in the aggregate a
majority of the total voting power may adopt any one or more resolutions for the
purpose of expanding or modifying the types of family members which qualify as a
Permitted Transferee; provided, that no such resolution shall retrospectively
impair any transfer which has been effected prior to the adoption of such
resolution.
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ARTICLE XII
-----------
INDEMNIFICATION
SECTION 1. The corporation shall indemnify its directors and officers,
whether serving the corporation or, at its request, any other entity, in any
capacity, to the full extent required or permitted by Louisiana law now or
hereafter in force, including the advance of expenses under the procedures and
to the full extent permitted by law.
SECTION 2. The corporation may indemnify other employees and agents to
such extent as shall be authorized by the Board of Directors and be permitted by
law.
SECTION 3. The foregoing rights of indemnification shall not be exclusive
of any other rights to which those seeking indemnification may be entitled and
shall continue as to a person who has ceased to be an officer, director, agent
or employee, and shall inure to the benefit of the heirs, executors and
administrators of such person.
SECTION 4. The Board of Directors may take such action as is necessary to
carry out these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such resolutions or contracts implementing
such provisions or such further indemnification arrangements as may be permitted
by law.
SECTION 5. No amendment or repeal of this Article of the Corporation's
Articles of Incorporation shall apply to or have any effect on any right to
indemnification provided hereunder with respect to acts or omissions occurring
prior to such amendment or repeal.
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ARTICLE XIII
------------
LIMITED LIABILITY
SECTION 1. The private property of the shareholders shall not be subject
to the payment of corporate debts or the satisfaction of other corporate
obligations to any extent whatsoever.
SECTION 2. The incorporators, officers, and directors of this corporation
claim the benefits of limitation of liability of the provisions of La. R.S.
12:24C(4) to the fullest extent allowed by law as fully and completely as though
said provisions were recited herein in full.
ARTICLE XIV
-----------
REVERSION
Cash, property or share dividends, shares issuable to shareholders in
connection with a reclassification of stock, and the redemption price of
redeemed shares, which are not claimed by the shareholders entitled thereto
within one year after the dividend or redemption price became payable or the
share became issuable, despite reasonable efforts by the corporation to pay the
dividend or redemption price or deliver the certificates for the shares to such
shareholders within such time, shall, at the expiration of such time, revert in
full ownership to the corporation, and the corporation's obligation to pay such
dividend or redemption price or issue such shares, as the case may be, shall
thereupon cease; provided that the Board of Directors may, at any time, for any
reason satisfactory to it, but need not, authorize (a) payment of the amount of
any cash or
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property dividend or redemption price or (b) issuance of any shares, ownership
of which has reverted to the corporation pursuant to this Article to the person
or entity who or which would be entitled thereto had such reversion not
occurred.
THUS DONE AND EXECUTED, in multiple originals, by the incorporators above
named on this 25 day of May, 1994.
/s/ Gary N. Solomon
------------------------------
Gary N. Solomon, Incorporator
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ACKNOWLEDGMENT
--------------
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned authority, personally came and appeared
GARY N. SOLOMON
a person of the full age of majority, and to me known to be the persons who
signed the foregoing instrument as Incorporator, and who being duly sworn did
acknowledge and declare, in my presence and in the presence of Paula Harless and
Fred Morgan, the undersigned competent witnesses, that he signed said instrument
as his free act and deed for the purposes mentioned therein.
IN WITNESS WHEREOF, the said appearer and witnesses and I have hereunto
affixed our hands on this 25 day of May, 1994, at New Orleans, Louisiana.
WITNESSES:
/s/ Paula J. Harless /s/ Gary N. Solomon
- -------------------------- -------------------------
Gary N. Solomon, Appearer
/s/ Fred Morgan
- --------------------------
/s/Raymond G. Areaux
-----------------------
NOTARY PUBLIC
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INITIAL REPORT OF
CB&T HOLDING CORPORATION
1.
The Corporation's registered office is located at:
Energy Centre
1100 Poydras Street
New Orleans, Louisiana 70163
2.
Its registered agent for service of process is:
Raymond G. Areaux, Esq.
Energy Centre
1100 Poydras Street, Suite 2700
New Orleans, Louisiana 70163
3.
The name and address of each of the initial directors are:
Gary N. Solomon
6300 Bertha Drive
New Orleans, Louisiana 70112
Martha N. Solomon
6300 Bertha Drive
New Orleans, Louisiana 70112
David A. Briggs
701 Metairie Road
Metairie, Louisiana 70005
Ronald P. Briggs
701 Metairie Road
Metairie, Louisiana 70005
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John A. Meltzer
316 S. Rampart Street
New Orleans, Louisiana 70112
Theodore George Solomon, Jr.
2400 Rue St. Martin
Hammond, Louisiana 70403
Daniel Beryl Buckman
No.3 Poydras Street, Apartment 4E
New Orleans, Louisiana 70130
Fred Morgan
2716 Gallinghouse Drive
New Orleans, Louisiana 70131
Robert Leland Redfearn
3713 Carondelet Street
New Orleans, Louisiana 70115
Dated and executed in multiple originals at New Orleans, Louisiana, this 25
day of May, 1994.
/s/ Gary N. Solomon
-------------------------------
GARY N. SOLOMON, INCORPORATOR
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AFFIDAVIT OF ACCEPTANCE OF APPOINTMENT
--------------------------------------
BY DESIGNATED REGISTERED AGENT
------------------------------
ACT 769 OF 1987
---------------
To the State Corporation Department
State of Louisiana
STATE OF LOUISIANA
PARISH OF ORLEANS
On this 25 day of May, 1994, Before me, a Notary Public in and for the
State and Parish aforesaid, personally came and appeared:
RAYMOND G. AREAUX
who is to me known to be the person and who, being duly sworn, acknowledged to
me that he does hereby accept appointment as the Registered Agent of CB&T
HOLDING CORPORATION, which is a corporation authorized to transact business in
the State of Louisiana, pursuant to the provisions of the Title 12, Chapter 1.
/s/ Raymond G. Areaux
----------------------------------
REGISTERED AGENT
Subscribed and sworn to before
me on the day, month and year
first above set forth
/s/ Leann Opotowsky
- ----------------------------
NOTARY PUBLIC
Leann Opotowsky
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Exhibit 3.2
CB&T HOLDING CORPORATION
************************************
BY-LAWS
************************************
OFFICES
Section 1. The corporation may establish offices at any place or places as
the Board of Directors may from time to time determine or the business of the
corporation may require in accordance with the laws of the State of Louisiana.
The principal office shall be located at the Energy Centre, 1100 Poydras Street,
New Orleans, LA 70163.
MEETINGS OF STOCKHOLDERS
Section 2. All meetings of stockholders shall be held at the principal
office of the corporation, or at any such other location as a majority of the
Board Members may direct, upon notice being given to the stockholders in the
manner required by the Articles of Incorporation and
the laws of Louisiana.
Section 3. An annual meeting of stockholders shall be held during the
fourth quarter of each calendar year on a date selected by the Board of
Directors, at which they shall elect by ballot, a Board of Directors, and
transact such other business as may properly be brought before the meeting
Section 4. Written notice of the annual meeting shall be served upon or
mailed to each stockholder entitled to vote thereat, by the Secretary, at such
address as appears on the books of the corporation, at least fifteen (15) days
prior to the meeting.
Section 5. At each stockholder meeting a complete list of the stockholders
entitled to vote at said election, arranged in alphabetical order, with the
residence of each and the number of shares held by each, shall be prepared and
furnished to the Chairman by the Secretary.
Section 6. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the Articles of
Incorporation, may be called by the President, Board of Directors, or the
President upon the request in writing of stockholders owning a three-fourths
majority in amount of the entire capital stock of the corporation issued and
outstanding and entitled to vote. Any call for a special meeting or request
therefor shall state in writing the purpose or purposes of the proposed special
meeting.
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Section 7. Written notice of a special meeting of stockholders stating the
time, place and object thereof shall be afforded to each stockholder entitled to
vote thereat in the manner set forth in Section 4 of this article, provided that
twenty (20) days notice be given for any special meeting of the stockholders.
Section 8. Business transacted at all special meetings shall be confined
to the objects stated in the call.
Section 9. The holders of three-fourths of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
stockholders for the transaction of business, except as otherwise provided by
statute by the Articles of Incorporation or by these by-laws. If, however, such
quorum shall not be present or represented at any meeting of the stockholders,
the stockholders entitled to vote thereat, present in person or represented by
proxy, shall have power to adjourn the meeting from time to time, without notice
other than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
Section 10. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power, present in person or
represented by proxy, shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the Articles of Incorporation or of these by-laws, a different vote is required,
in which case such express provision shall govern and control the decision of
such question.
Section 11. At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such stockholder and hearing a date not
more than six (6) months prior to said meeting, unless said instrument provides
for a longer period. Each holder of stock having voting power, registered in
his name on the books of the corporation shall have the right to vote the number
of shares of such stock so owned by him, for as many directors as are to be
elected by the stockholders, as the case may be. Except where the transfer books
of the corporation shall have been closed, or a date shall have been fixed as a
record date for the determination of its stockholders entitled to vote, no share
of stock shall be voted on at any election of Directors which shall have been
transferred on the books of the corporation within thirty (30) days next
preceding such election of Directors.
Section 12. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of the statutes or of the Articles of Incorporation or of these by-
laws, the meeting and vote of stockholders may be dispensed with, if all the
stockholders who would have been entitled to vote upon the action if such
meetings were held, shall consent in writing to such corporate action being
taken.
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Section 13. At any meeting of the stockholders, the Chairman of the Board
of Directors shall preside or, in his absence, the President, or in the event
both are absent, a Chairman appointed by the meeting will preside.
DIRECTORS
Section 14. The number of Directors which shall constitute the Board shall
be no more than thirty (30) and no less than (5). The number of Directors shall
be set each year at the annual meeting of the shareholders. The Directors shall
be elected at the annual meeting of the shareholders except as provided in
Section 15 of these by-laws, and each Director shall hold office until his
successor shall be elected and shall qualify.
Section 15. The Board of Directors may increase its membership, not to
exceed thirty (30) Directors, and may fill any vacancy that may exist or occur
among Directors, either death, resignation or otherwise, by a three fourths vote
of the entire Board, and any Director or Directors so elected to fill any
vacancy shall hold office until the next regular election or until their
successor or successors shall be elected and qualified.
Section 16. The property and business of the corporation shall be managed
by its Board of Directors which may exercise all such powers of the corporation
and do all such lawful acts and things as are not by statute or by the Articles
of Incorporation or by these by-laws directed or required to be exercised or
done by the stockholders.
MEETINGS OF THE BOARD
Section 17. The Directors of the corporation may hold their meetings, both
regular and special, either within or without the State of Louisiana.
Section 18. The first meeting of each newly elected Board shall be held at
such time and place as shall be fixed by the vote of the stockholders at the
annual meeting for the election of directors, and no notice of such meeting
shall be necessary to the newly elected directors in order to legally constitute
the meeting, provided a quorum shall be present, or they may meet at such place
and time as shall be fixed by the consent in writing of all directors.
Section 19. Regular meetings of the Board may be held without notice at
such time and place as shall from time to time be determined by the Board.
Section 20. Special meetings of the Board may be called by the Chairman or
President on three (3) days' notice to each director, either personally or by
mail or by telephone; special meetings shall be called by the Chairman, the
President or the Secretary of the Board in like manner and on like notice on the
written request of a majority of the Directors.
3
<PAGE>
Section 21. At all meetings of the Board the presence of two-thirds of the
entire Board shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the Directors present at
any meeting at which there is a quorum shall be the act of the Board of
Directors, except as may be otherwise specifically provided by statute or by the
Articles of Incorporation or by these by-laws.
Section 22. The Board of Directors may, by resolution passed by three-
fourths of the whole Board, designate one or more committees, each committee to
consist of two or more of the Directors of the corporation, which to the extent
provided in said resolution, shall have and may exercise any and all of the
powers of the Board of Directors, in the management of the business and affairs
of the corporation, except as may be otherwise provided by the Articles of
Incorporation, the statutes and these by-laws. Such committee or committees
shall have such name or names as may be determined from time to time by
resolution adopted by the Board of Directors.
Section 23. Any action which may be taken at a meeting of the Board or any
committee thereof, may be taken by a consent in writing signed by all of the
directors or by all members of the committee, as the case may be, and filed with
the records of proceedings of the Board or committee.
Section 24. The members of the Board of Directors may participate in and
hold a meeting of the Board by means of conference telephone or similar
communications equipment provided that all persons participating in the meeting
can hear and communicate with each other. Participation in a meeting pursuant
to this subsection shall constitute presence in person at such meeting, except
where a person participates in the meeting for the express purpose of objecting
to the transaction of any business on the ground that the meeting is not
lawfully called or convened.
COMPENSATION OF DIRECTORS
Section 25. Directors, as such, shall not receive any stated salary for
their service, but, by resolution of the Board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each regular or special
meeting of the Board; provided, that nothing herein contained shall be construed
to preclude any Director from serving the corporation in any other capacity and
receiving compensation therefor. Members of special or standing committees may
be allowed like compensation for attending committee meetings.
NOTICES
Section 26. Whenever under the provisions of the statutes or of the
Articles of Incorporation or of these by-laws, notice is required to be given to
any Director or stockholder, it shall not be construed to mean personal notice,
but such notice may be given in writing, by mail, addressed to such Director or
shareholder at such address as appears on the books of the corporation, and such
notice shall be deemed to be given at the time when the same shall be thus
mailed.
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Section 27. Whenever any notice is required to be given under the
provisions of the statutes or of the Articles of Incorporation or of these by-
laws, a waiver thereof in writing signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.
OFFICERS
Section 28. The Board of Directors shall establish and elect the officers
for the management of the business and affairs of the corporation, which
officers may be a Chairman of the Board, a Chief Executive Officer, a President
one or more Vice Presidents, a Treasurer, a Secretary to the Board of Directors,
and one or more Assistant Secretaries and Assistant Treasurers, and any two or
more of these officers may be combined in any one person. Any officer or agent
may be removed by the Board of Directors, the Executive Committee, or the
Chairman of the Board with or without cause at any time. The Board of Directors
may from time to time elect, appoint and establish such other officers and
agents as they deem necessary. The officers and agents shall have such
authority and perform such duties in the management of the property and affairs
of the corporation as herein below prescribed or as may be hereinafter
prescribed.
Section 29. The salaries of all officers, agents or any employees of the
corporation shall be set by the Chief Executive Officer.
Section 30. Such officers as the Board may require shall give bond in such
sums as may be fixed from time to time by the Board of Directors with such
surety or sureties as the Board may from time to time approve.
CHAIRMAN
Section 31. The Chairman shall preside at all board meetings when present
and be ex-officio chairman of all committees. He shall sign all minutes of
meetings at which he may have presided. He shall hold office of the current year
for which the Board of which he shall be a member, was elected unless he shall
resign, be disqualified or be removed. He shall nominate all members of any
committees to be appointed for election by the Board of Directors except the
Examining Committee.
THE CHIEF EXECUTIVE OFFICER
Section 32. The Chief Executive Officer shall have the authority and
responsibility over the active and general management of the corporation's
business, subject to the control of the Board of Directors. He shall have the
power to appoint and discharge all lesser officers, agent and employees, except
as otherwise herein specifically provided.
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PRESIDENT
Section 33. The President shall be the chief administrative officer of the
corporation. He shall have active and general management of the corporation's
business in the absence of the Chief Executive Officer. Between meetings of the
Board, he shall be empowered to authorized and direct the bringing or defending
of any civil suit, garnishment or other litigation which in his judgment ought
to be brought or defended. He shall perform any and all other duties which may
be assigned to him or which are commonly performed by the presidents of banks.
THE VICE PRESIDENT
Section 34. The Vice President shall do and perform such duties and
exercise such authority as set out in these by-laws or which may from time to
time be prescribed by the Board of Directors.
TREASURER
Section 35. The Treasurer shall be responsible for all monies, funds,
indemnity bonds and other valuables of the corporation and shall deliver same to
the order of the Board of Directors of the corporation or to the person or
persons authorized to receive them. The Treasurer shall pay all the current
expenses of the corporation and shall, every three (3) months, or more often if
required, make to the Board of Directors a detailed statement thereof.
SECRETARY TO THE BOARD OF DIRECTORS
Section 36. The Secretary of the Board of Directors shall attend all
sessions of the Board and all meetings of the stockholders and record all votes
and the minutes of all proceedings in a book to be kept for that purpose and
shall perform like duties for the standing committees when required.
ASSISTANT SECRETARY
Section 37. The Assistant Secretary shall, in case of disability of the
Secretary or his or her absence from the particular place where the act is to be
performed, perform the duties and exercise the powers of the Secretary.
ASSISTANT TREASURER
Section 38. The Assistant Treasurer, whether one or more, shall perform
such duties as may be prescribed from time to time by the Board of Directors or
by the President and shall, in the absence of the Treasurer, perform such duties
of the Treasurer as may be directed either by the Board of Directors or by the
President.
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POWERS AND DUTIES
Section 39. The Chief Executive Officer, the President, or any officer
designated by them shall have the power to bind the corporation in transactions
relating to the routine conduct of its business, not requiring specific approval
of the stockholders or the Board of Directors.
INDEMNIFICATION OF OFFICERS, DIRECTORS, EMPLOYEES AND AGENTS
Section 40. This corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any action, suit or proceeding,
whether civil, criminal, administrative or investigative (including any action
by or in the right of the corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving at
the request of the corporation as a director, officer, employee or agent of
another business, foreign or non-profit corporation, partnership, joint venture
or other enterprise, against expenses (including attorney's fees), judgments,
fines and amounts paid in settlement actually and reasonable incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful; provided that in case of
actions by or in the right of the corporation, the indemnity shall be limited to
expenses (including attorney's fees, and amounts paid in settlement not
exceeding, in the judgment of the Board of Directors, the estimated expense of
litigating the action to conclusion) actually and reasonably incurred in
connection with the defense or settlement of such action and no indemnification
shall be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the court shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, he is fairly and
reasonably entitled indemnify for such expenses which the court shall deem
proper. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.
This corporation may procure insurance, and may pay premium therefor, in order
to insure against the liabilities herein undertaken.
EXECUTIVE COMMITTEE
Section 41. There is hereby created and constituted a standing committee
composed of five (5) Directors, which shall include the Chairman of the Board
and President, to be appointed by the Board. The Executive Committee shall, in
accordance with Section 81(8) of Title 12 of the Louisiana Revised Statutes,
have and may exercise the full and complete powers of the Board of Directors in
the management of the business and affairs of the corporation.
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EXAMINING AND AUDIT COMMITTEE
Section 42. Every calendar year the Board of Directors shall examine fully
the books, papers, business and affairs of the corporation. They may make any
examination necessary to afford them complete knowledge of the affairs of the
corporation and may employ expert clerical help, including auditors, if deemed
expedient. A sworn written report of such examination shall be rendered to the
Chairman of the Board of Directors within ten (10) days of its completion and
the written report shall contain a statement of the assets and liabilities of
the corporation as shown by its books, together with any deductions from the
assets or additions to the liabilities which the directors of committee see fit
to recommend after completion of the examination. Said sworn written report
shall also include any other matter that may affect the solvency or best
interest of the corporation. After rendition, said written report will be
submitted to the President, who shall thereafter submit same to the Board of
Directors at its first meeting held subsequent to the receipt of the report by
the President and a record of it shall be made in the minutes of that meeting.
Neither the President nor any salaried Vice-President shall be a member of the
Examining Committee. Nothing herein contained shall prevent the Examining
Committee from making its examination on a surprise basis.
CERTIFICATES OF STOCK
Section 43. The certificates of stock of the corporation shall be numbered
and shall be entered in the books of the incorporation as they are issued. They
shall exhibit the holder's name and number of shares and shall by signed by the
President or a Vice President and by the Secretary or Treasurer, and sealed with
the seal of the corporation.
LOST CERTIFICATES
Section 44. The Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the Board of Directors may, in its discretion
and as a condition, precedent to the issue issuance thereof, require the owner
of such lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require and/or
give the corporation a bond in such sum as it may direct as indemnity against
any claim that may be made against the corporation with respect to the
certificate alleged to have been lost or destroyed, and may require compliance
with the provisions of the Uniform Stock Transfer Law of Louisiana.
TRANSFERS OF STOCK
Section 45. Upon surrender to the corporation of a certificate for shares
duly endorsed or accompanied by proper evidence of succession, assignment or
authority to transfer, it shall be the
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duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 46. Unless otherwise authorized by statute or the Articles of
Incorporation, the Board of Directors may close the stock transfer books of the
corporation for a period not exceeding fifty (50) days preceding the date of any
meeting of the stockholders, the date for payment of any dividend, the date for
the allotment of rights or the date when any change or conversion or exchange of
capital stock shall go into effect, or for a period of not exceeding fifty (50)
days in connection with obtaining the consent of stockholders for any purpose.
In lieu of closing the stock transfer books as aforesaid, the Board of Directors
may fix in advance of a date, not exceeding fifty (50) days preceding the date
of any meeting of stockholders, the date for the payment of any dividend, the
date for the allotment of rights, the date when any change or conversation or
exchange of capital stock shall go into effect or a date in connection with
obtaining such consent, as a record date for the determination of the
stockholders entitled to notice of, and to vote at any such meeting, and any
adjournment thereof, or entitled to receive payment of any such dividend, or to
exercise the rights in respect of any such change, conversation or exchange of
capital stock, or to give such consent, and in such case such stockholders and
only such stockholders as shall be stockholders of record on the date so fixed
shall be entitled to such notice of, and to vote at, such meeting and any
adjournment thereof, or to receive payment of such dividend, or to receive such
allotment, of rights, or to exercise such rights, or to give such consent, as
the case may be, notwithstanding any transfer of any stock on the books of the
corporation after any such record date fixed as aforesaid.
REGISTERED STOCKHOLDERS
Section 47. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share or shares on the part of any other person, whether or not
it shall have express or other notice thereof, except as otherwise provided by
the laws of Louisiana.
DIVIDENDS
Section 48. Dividends upon the capital stock of the corporation, subject
to the provisions of the Articles of Incorporation, if any, may be declared by
the Board of Directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares for the capital stock,
subject to the provisions of the Articles of Incorporation and the laws of
Louisiana.
Section 49. Before payment of an dividend, there may be set aside out of
any funds of the corporation available for dividends such sum or sums as the
Directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purposes as the
9
<PAGE>
directors shall think conducive to the interest of the corporation, and the
directors may modify or abolish any such reserve in the manner in which it was
created.
ANNUAL STATEMENT
Section 50. The Board of Directors shall present at each annual meeting,
and, when called for by vote of the stockholders, at any special meeting of the
stockholders a full and clear statement of the business and condition of the
corporation.
AMENDMENTS
Section 51. These By-Laws may be altered or repealed at any regular
meeting of the stockholders or at any special meeting of the stockholders at
which a quorum is present or represented, provided notice of the proposed
alteration or repeal be contained in the notice of such special meeting by the
affirmative vote of a three fourths majority of the stock entitled to vote at
such meeting and present or represented thereat, or by the affirmative vote of a
majority of the entire Board of Directors at any regular meeting of the Board or
at any special meeting of the Board, if notice of such proposed alteration or
repeal be contained in the notice of such special meeting; provided, however,
that no change of the time or place of the meeting for the election of directors
shall be made within thirty (30) days next before the date on which such meeting
is to be held and that, in case of any change of such time or place, notice
thereof shall be given to each stockholder in person or by letter mailed to his
last known post office address at least twenty (20) days before the meeting is
held.
10
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UNANIMOUS CONSENT OF DIRECTORS
OF CB&T HOLDING CORPORATION
The undersigned, being the initial directors of CB&T Holding Corporation
(the "Corporation"), and acting herein by unanimous consent as permitted by
section 81C(9) of the Louisiana Business Corporation Law, hereby adopt the
following corporate resolutions:
RESOLVED, that Section 3 of the Corporation's Bylaws is hereby amended in
its entirety to read as follows:
An annual meeting of stockholders shall be held during the fourth quarter
of each calendar year on a date selected by the Board of Directors, at
which they shall elect by ballot, a Board of Directors, and transact such
other business as may properly be brought before the meeting;
and,
RESOLVED, that Section 42 of the Corporation's Bylaws is hereby amended by
replacing the phrase "six (6) months" with the phrase "calendar year."
IN WITNESS WHEREOF, this action by the Board of Directors of CB&T Holding
Corporation is hereby taken on the 29th day of November, 1994.
/s/ Gary N. Solomon /s/ John A. Meltzer
------------------------- -----------------------------
Gary N. Solomon John A. Meltzer
/s/ Martha N. Solomon /s/ Fred B. Morgan, III
------------------------- -----------------------------
Martha N. Solomon Fred B. Morgan, III
/s/ David A. Briggs /s/ Daniel Buckman
------------------------- --------- -------------------
David A. Briggs Daniel Buckman
/s/ Ronald P. Briggs /s/ Robert Redfearn
------------------------- --------- -------------------
Ronald P. Briggs Robert Redfearn
CERTIFICATE
I, MARTHA N. SOLOMON, Secretary of CB&T Holding Corporation, do hereby
certify that the subscribers to the foregoing consent are all of the members of
the Board of Directors of CB&T Holding Corporation as of the 14th day of
November, 1994.
Martha N. Solomon
----------------------------
, Secretary
-------------------
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Exhibit 4.1
CB&T HOLDING CORPORATION
AND
WILMINGTON TRUST COMPANY,
AS TRUSTEE
____________________________
INDENTURE
____________________________
___% JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES
DUE ________ __, 2029
DATED AS OF _________ __, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Page
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ARTICLE DEFINITIONS........................................................... 2
Section 1.1 Definitions of Terms.................................................. 2
ARTICLE II ISSUE, DESCRIPTION, TERMS, CONDITIONS REGISTRATION AND
EXCHANGE OF THE DEBENTURES.......................................... 10
Section 2.1 Designation and Principal Amount...................................... 10
Section 2.2 Maturity.............................................................. 10
Section 2.3 Form and Payment...................................................... 10
Section 2.4 Interest.............................................................. 11
Section 2.4A Defaulted Interest.................................................... 11
Section 2.5 Execution And Authentications......................................... 12
Section 2.6 Registration of Transfer And Exchange................................. 13
Section 2.7 Temporary Debentures.................................................. 14
Section 2.7A Global Securities..................................................... 15
Section 2.8 Mutilated, Destroyed, Lost or Stolen Debentures....................... 16
Section 2.9 Cancellation.......................................................... 17
Section 2.10 Benefit of Indenture.................................................. 17
Section 2.11 Authenticating Agent.................................................. 17
Section 2.12 Right of Set-off...................................................... 18
Section 2.13 CUSIP Numbers......................................................... 18
ARTICLE III REDEMPTION OF DEBENTURES.............................................. 18
Section 3.1 Redemption............................................................ 18
Section 3.2 Special Event Redemption.............................................. 19
Section 3.3 Optional Redemption by Corporation.................................... 19
Section 3.4 Notice of Redemption.................................................. 19
Section 3.5 Payment Upon Redemption............................................... 21
Section 3.6 No Sinking Fund....................................................... 21
ARTICLE IV EXTENSION OF INTEREST PAYMENT PERIOD.................................. 21
Section 4.1 Extension of Interest Payment Period.................................. 21
Section 4.2 Notice of Extension................................................... 22
Section 4.3 Limitation on Transactions............................................ 22
ARTICLE V PARTICULAR COVENANTS OF THE CORPORATION............................... 23
Section 5.1 Payment of Principal and Interest..................................... 23
Section 5.2 Maintenance of Agency................................................. 23
Section 5.3 Paying Agents......................................................... 24
Section 5.4 Appointment to Fill Vacancy in Office of Trustee...................... 25
Section 5.5 Compliance with Consolidation Provisions.............................. 25
Section 5.6 Limitations on Transactions........................................... 25
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Section 5.7 Covenants as to The Trust............................................. 26
Section 5.8 Covenants as to Purchases............................................. 26
Section 5.9 Reserve for Interest Payments......................................... 26
ARTICLE VI DEBENTUREHOLDERS' LISTS AND REPORTS BY THE CORPORATION AND
THE TRUSTEE......................................................... 26
Section 6.1 Corporation to Furnish Trustee Names and Addresses of Debentureholders 26
Section 6.2 Preservation of Information Communications With Debentureholders...... 26
Section 6.3 Reports by the Corporation............................................ 27
Section 6.4 Reports by the Trustee................................................ 28
Section 6.5 Statements as to Default.............................................. 28
ARTICLE VII REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON
EVENT OF DEFAULT................................................... 28
Section 7.1 Events of Default..................................................... 28
Section 7.2 Collection of Indebtedness and Suits for Enforcement
by Trustee......................................................... 30
Section 7.3 Application of Monies Collected....................................... 31
Section 7.4 Limitation on Suits................................................... 32
Section 7.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver.......... 33
Section 7.6 Control by Debentureholders........................................... 33
Section 7.7 Undertaking to Pay Costs.............................................. 34
Section 7.8 Direct Action by Holders of Preferred Securities...................... 34
ARTICLE VIII FORM OF DEBENTURE AND ORIGINAL ISSUE.................................. 34
Section 8.1 Form of Debenture..................................................... 34
Section 8.2 Original Issue of Debentures.......................................... 35
ARTICLE IX CONCERNING THE TRUSTEE................................................ 35
Section 9.1 Certain Duties and Responsibilities................................... 35
Section 9.2 Notice of Defaults.................................................... 36
Section 9.3 Certain Rights of Trustee............................................. 36
Section 9.4 Trustee Not Responsible for Recitals, Etc............................. 38
Section 9.5 May Hold Debentures................................................... 38
Section 9.6 Monies Held in Trust.................................................. 38
Section 9.7 Compensation and Reimbursement........................................ 38
Section 9.8 Reliance on Officers' Certificate..................................... 39
Section 9.9 Disqualification: Conflicting Interests............................... 39
Section 9.10 Corporate Trustee Required Eligibility................................ 39
Section 9.11 Resignation and Removal; Appointment of Successor..................... 40
Section 9.12 Acceptance of Appointment by Successor................................ 41
Section 9.13 Merger, Conversion, Consolidation or Succession to Business........... 42
Section 9.14 Preferential Collection of Claims Against the Corporation............. 42
ARTICLE X CONCERNING THE DEBENTUREHOLDERS....................................... 42
Section 10.1 Evidence of Action by Holders......................................... 42
Section 10.2 Proof of Execution by Debentureholders................................ 43
Section 10.3 Who May Be Deemed Owners.............................................. 43
</TABLE>
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Section 10.4 Certain Debentures Owned by Corporation Disregarded................... 44
Section 10.5 Actions Binding on Future Debentureholders............................ 44
ARTICLE XI SUPPLEMENTAL INDENTURES............................................... 44
Section 11.1 Supplemental Indentures Without the Consent of Debentureholders....... 44
Section 11.2 Supplemental Indentures With Consent of Debentureholders.............. 46
Section 11.3 Effect of Supplemental Indentures..................................... 46
Section 11.4 Debentures Affected by Supplemental Indentures........................ 46
Section 11.5 Execution of Supplemental Indentures.................................. 47
ARTICLE XII SUCCESSOR CORPORATION................................................. 47
Section 12.1 Corporation May Consolidate, Etc...................................... 47
Section 12.2 Successor Corporation Substituted..................................... 48
Section 12.3 Evidence of Consolidation, Etc. to Trustee............................ 48
ARTICLE XIII SATISFACTION AND DISCHARGE............................................ 48
Section 13.1 Satisfaction and Discharge of Indenture............................... 48
Section 13.2 Discharge of Obligations.............................................. 49
Section 13.3 Deposited Monies to be Held in Trust.................................. 49
Section 13.4 Payment of Monies Held by Paying Agents............................... 50
Section 13.5 Repayment to Corporation.............................................. 50
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS
AND DIRECTORS...................................................... 50
Section 14.1 No Recourse........................................................... 50
ARTICLE XV MISCELLANEOUS PROVISIONS.............................................. 51
Section 15.1 Effect on Successors And Assigns...................................... 51
Section 15.2 Actions by Successor.................................................. 51
Section 15.3 Surrender of Corporation Powers....................................... 52
Section 15.4 Notices............................................................... 52
Section 15.5 Governing Law......................................................... 52
Section 15.6 Treatment of Debentures as Debt....................................... 52
Section 15.7 Compliance Certificates and Opinions.................................. 52
Section 15.8 Payments on Business Days............................................. 53
Section 15.9 Conflict With Trust Indenture Act..................................... 53
Section 15.10 Counterparts.......................................................... 53
Section 15.11 Separability.......................................................... 53
Section 15.12 Assignment............................................................ 53
Section 15.13 Acknowledgment of Rights.............................................. 54
Section 15.14 Additional Provisions for the Payment of Expenses..................... 54
ARTICLE XVI SUBORDINATION OF DEBENTURES........................................... 55
Section 16.1 Agreement to Subordinate.............................................. 55
Section 16.2 Default on Senior Debt or Subordinated Debt........................... 55
Section 16.3 Liquidation; Dissolution; Bankruptcy.................................. 55
Section 16.4 Subrogation........................................................... 57
Section 16.5 Trustee to Effectuate Subordination................................... 58
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Section 16.6 Notice by the Corporation............................................. 58
Section 16.7 Rights of The Trustee; Holders of Senior Indebtedness................. 59
Section 16.8 Subordination May Not be Impaired..................................... 59
</TABLE>
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CROSS-REFERENCE TABLE
SECTION OF TRUST INDENTURE ACT OF 1939, AS AMENDED SECTION OF INDENTURE
310(a) 9.10
310(b) 9.9
9.11
310(c) N/A
311(a) 9.14
311(b) 9.14
311(c) N/A
312(a) 6.1
6.2(a)
312(b) 6.2(c)
312(c) 6.2(c)
313(a) 6.4(a)
313(b) 6.4(a)
313(c) 6.4(a)
6.4(b)
313(d) 6.4(b)
314(a) 6.3(a)
6.3(b)
6.3(c)
6.5(a)
314(b) N/A
314(c) 15.7
314(d) N/A
314(e) 15.7
314(f) N/A
315(a) 9.1(a)
9.1(b)
9.3
315(b) 9.2
315(c) 9.1(a)
315(d) 9.1(b)
315(e) 7.7
316(a) 1.1
7.6
316(b) 7.4(b)
316(c) 10.1(b)
317(a) 7.2(b)
317(b) 7.2(c)
318(a) 5.3
Note: This Cross-Reference Table does not constitute part of this Indenture and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
INDENTURE
INDENTURE, dated as of _________ __, 1999, between CB&T HOLDING
CORPORATION, a Louisiana corporation (the "Corporation"), and WILMINGTON TRUST
COMPANY, a Delaware banking corporation (the "Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Corporation has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of unsecured securities to be known as its ____% Junior Subordinated
Deferrable Interest Debentures due ______ __, 2029 (hereinafter referred to as
the "Debentures"), the form and substance of such Debentures and the terms,
provisions and conditions thereof to be set forth as provided in this Indenture;
and
WHEREAS, Crescent Capital Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public up to $____________ aggregate liquidation
amount of its Preferred Securities (as defined herein) and proposes to invest
the proceeds from such offering, together with the proceeds of the issuance and
sale by the Trust to the Corporation of up to $_________ aggregate liquidation
amount of its Common Securities (as defined herein), in up to $_________
aggregate principal amount of the Debentures; and
WHEREAS, the Corporation has requested that the Trustee execute and deliver
this Indenture; and
WHEREAS, all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Corporation and authenticated and delivered by the Trustee, the
valid obligations of the Corporation, have been performed, and the execution and
delivery of this Indenture have been duly authorized in all respects; and
WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Corporation has duly authorized
the execution of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Corporation, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of the
Debentures by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of the Debentures and
intending to be legally bound hereby:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS OF TERMS.
The terms defined in this Section 1.1 (except as in this Indenture
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.1 and shall include the
plural as well as the singular. All other terms used in this Indenture that are
defined in the Trust Indenture Act, or that are by reference in the Trust
Indenture Act defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in the Trust Indenture Act and in the Securities
Act as in force at the date of the execution of this instrument. All accounting
terms used herein and not expressly defined shall have the meanings assigned to
such terms in accordance with Generally Accepted Accounting Principles as in
effect at the time of computation.
"Additional Interest" shall have the meaning set forth in Section 2.4.
"Administrative Trustees" shall have the meaning set forth in the Trust
Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified Person is a
general partner; (e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the specified Person
is an executive officer, director or general partner.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Global Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means an authenticating agent with respect to the
Debentures appointed by the Trustee pursuant to Section 2.11.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or state
law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Corporation or any
duly authorized committee of such Board.
2
<PAGE>
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Corporation to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means, with respect to the Debentures, any day other than a
Saturday or a Sunday or a day on which banking institutions in the Cities of New
York or New Orleans are authorized or required by law, executive order or
regulation to close, or a day on which the principal Corporate Trust Office of
the Trustee or the Property Trustee is closed for business.
"Capital Treatment Event" means the receipt by the Trust of an Opinion of
Counsel rendered by a law firm having a recognized national banking practice, to
the effect that, as a result of any amendment to, or change (including any
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or such proposed change pronouncement, action or decision is announced
on or after the date of original issuance of the Preferred Securities under the
Trust Agreement, there is more than an insubstantial risk that the Preferred
Securities would not constitute "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve
(or any successor regulatory authority with jurisdiction over bank holding
companies), or any capital adequacy guidelines as then in effect and applicable
to the Corporation.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer, the principal accounting officer, the
treasurer or any vice president of the Corporation. The Certificate need not
comply with the provisions of Section 15.7.
"Change in 1940 Act Law" shall have the meaning set forth in the definition
of "Investment Company Event."
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets of
the Trust which rank pari passu with the Preferred Securities; provided,
however, that upon the occurrence of an Event of Default, the rights of holders
of Common Securities to payment in respect of (i) distributions and (ii)
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Compounded Interest" shall have the meaning set forth in Section 4.1.
3
<PAGE>
"Corporate Trust Office" means (i) when used with respect to the Trustee,
the office of the Trustee at which, at any particular time, its corporate trust
business shall be principally administered, which office at the date hereof is
located at Rodney Square North, 1100 North Market Street, Wilmington, Delaware
19890, Attention: Corporate Trust Administration, or (ii) when used with respect
to the Property Trustee, the office of the Property Trustee, at which, at any
particular time, its corporate trust business shall be principally administered,
which office at the date hereof is located at Rodney Square North, 1100 North
Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.
"Corporation" means CB&T Holding Corporation, a corporation duly organized
and existing under the laws of the State of Louisiana, and, subject to the
provisions of Article XII, shall also include its successors and assigns.
"Coupon Rate" shall have the meaning set forth in Section 2.4.
"Custodian" means any receiver, trustee, assignee, liquidator, or similar
official under any Bankruptcy Law.
"Debentures" shall have the meaning set forth in the Recitals hereto.
"Debentureholder," "holder of Debentures," "registered holder," or other
similar term, means the Person or Persons in whose name or names a particular
Debenture shall be registered on the books of the Corporation or the Trustee
kept for that purpose in accordance with the terms of this Indenture.
"Debenture Register" shall have the meaning set forth in Section 2.6(b).
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent, (i) every
obligation of such Person for money borrowed; (ii) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; (vi) all
indebtedness of such Person, whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of financial derivative
products, including interest rate, foreign exchange rate and commodity forward
contracts, options, swaps and similar arrangements; (vii) every obligation of
the type referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable, directly or indirectly, as obligor
or otherwise.
4
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"Default" means any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning provided in Section 2.4A hereof.
"Deferred Interest" shall have the meaning set forth in Section 4.1.
"Depositary" means, with respect to the Debentures issuable or issued in
whole or in part in the form of one or more Global Securities, the Person
designated as Depositary by the Corporation pursuant to Section 2.3. The initial
Depositary shall be DTC.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance with
the Trust Agreement and the Debentures held by the Property Trustee are to be
distributed to the holders of the Trust Securities issued by the Trust pro rata
in accordance with the Trust Agreement.
"DTC" shall mean The Depository Trust Company.
"Event of Default" means, with respect to the Debentures, any event
specified in Section 7.1, which has continued for the period of time, if any,
and after the giving of the notice, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
statute, in each case as amended from time to time.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.1.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Generally Accepted Accounting Principles" means such accounting principles
as are generally accepted at the time of any computation required hereunder.
"Global Security" means a Debenture evidencing all or part of the
Debentures, issued to the Depositary or its nominee, and registered in the name
of such Depositary or its nominee.
"Governmental Obligations" means securities that are (i) direct obligations
of the United States of America for the payment of which its full faith and
credit is pledged; or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such Governmental
Obligation or a specific payment of principal of or interest on any such
Governmental Obligation held by such
5
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custodian for the account of the holder of such depositary receipt; provided,
however, that (except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such depositary
receipt from any amount received by the custodian in respect of the Governmental
Obligation or the specific payment of principal of or interest on the
Governmental Obligation evidenced by such depositary receipt.
"Herein," "hereof," and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into in accordance with the terms hereof.
"Interest Payment Date," when used with respect to any installment of
interest on the Debentures, shall have the meaning set forth in Section 2.4.
"Investment Company Act" means the Investment Company Act of 1940, and any
statute successor thereto, in each case as amended from time to time.
"Investment Company Event" means the receipt by the Trust of an Opinion of
Counsel rendered by a law firm having a recognized national tax and securities
law practice, to the effect that, as a result of the occurrence of a change in
law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority (a "Change in 1940 Act Law"), the Trust is or shall be considered an
"investment company" that is required to be registered under the Investment
Company Act, which Change in 1940 Act Law becomes effective on or after the date
of original issuance of the Preferred Securities under the Trust Agreement.
"Maturity Date" means the date on which the Debentures mature and on which
the principal shall be due and payable together with all accrued and unpaid
interest thereon including Compounded Interest and Additional Interest, if any,
as set forth in Section 2.2.
"Ministerial Action" shall have the meaning set forth in Section 3.2.
"Officers' Certificate" means a certificate signed by the Chairman,
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Corporation, and delivered to the Trustee. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
6
<PAGE>
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of independent legal
counsel experienced in such matters as being opined upon, that is delivered to
the Trustee in accordance with the terms hereof.
"Other Debentures" means all junior subordinated debentures ranking pari
passu or junior to the Debentures (other than the Debentures) issued by the
Corporation from time to time and sold to trusts established or to be
established by the Corporation, in each case similar to the Trust to issue
securities intended to qualify for Tier I capital treatment.
"Outstanding" when used with reference to the Debentures, means, subject to
the provisions of Section 10.4, as of any particular time, all Debentures
theretofore authenticated and delivered by the Trustee under this Indenture,
except (a) Debentures theretofore canceled by the Trustee or any paying agent,
or delivered to the Trustee or any paying agent for cancellation or that have
previously been canceled; (b) Debentures or portions thereof for the payment or
redemption of which monies or Governmental Obligations in the necessary amount
shall have been deposited in trust with the Trustee or with any paying agent
(other than the Corporation) or shall have been set aside and segregated in
trust by the Corporation (if the Corporation shall act as its own paying agent);
provided, however, that if such Debentures or portions of such Debentures are to
be redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article III or provision satisfactory to the Trustee
shall have been made for giving such notice; (c) Debentures in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered pursuant to the terms of Section 2.6 and (d) Debentures paid pursuant
to Section 2.8.
"Person" means any individual, corporation, partnership, joint-venture,
trust, limited liability company, joint-stock company, unincorporated
organization or government or any agency or political subdivision thereof.
"Place of Payment" means the place or places where the principal of and
interest on the Debentures are payable in accordance with the terms of this
Indenture.
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"Predecessor Debenture" means every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.8 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture.
"Preferred Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Common Securities issued by the Trust;
provided, however, that upon the occurrence of an Event of Default, the rights
of holders of Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Preferred Securities Guarantee" means the Preferred Securities Guarantee
Agreement dated ________ __, 1999, as amended from time to time, by and between
the Corporation, as guarantor, and the Trustee, executed and delivered for the
benefit of the Holders of the Preferred Securities.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Regular Record Date" means the Business Day next preceding any Interest
Payment Date.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee in its corporate trust administration who is responsible
for the administration of the Trust and whose name appears on the list of
Responsible Officers of the Trustee which shall be furnished by the Trustee to
the Corporation, as such list may be revised from time to time.
"Scheduled Maturity Date" means ________ __, 2029.
"Securities Act" means the Securities Act of 1933, or any successor
statute, in each case as amended from time to time.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Corporation whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include (i) any Debt of the Corporation which when
incurred and without respect to any election under Section 1111 (b) of the
United States Bankruptcy Code of 1978, as amended, was without recourse to the
Corporation; (ii) any Debt of the Corporation to any of its subsidiaries; and
(iii) any Debt to any employee of the Corporation.
"Senior Indebtedness" shall have the meaning set forth in Section 16.1.
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"Special Event" means a Tax Event, an Investment Company Event or a Capital
Treatment Event.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Corporation whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Corporation (other than the Debentures), except that
Subordinated Debt shall not include: (i) any Debt of the Corporation which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the
Corporation; (ii) any Debt of the Corporation to any of its Subsidiaries; (iii)
any Debt to any employee of the Corporation and (iv) Debentures or Other
Debentures, including Debentures sold by the Corporation to the Trust.
"Subsidiary" means, with respect to any Person, (i) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person or by one or more of its Subsidiaries or
by such Person and one or more of its Subsidiaries; (ii) any general
partnership, joint venture, trust or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries; and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
rendered by a law firm having a recognized national tax and securities practice,
to the effect that, as a result of any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which amendment or
change is effective or which pronouncement or decision is announced on or after
the date of issuance of the Preferred Securities under the Trust Agreement,
there is more than an insubstantial risk that (i) the Trust is, or shall be
within 90 days after the date of such Opinion of Counsel, subject to United
States federal income tax with respect to income received or accrued on the
Debentures; (ii) interest payable by the Corporation on the Debentures is not,
or within 90 days after the date of such Opinion of Counsel, shall not be,
deductible by the Corporation, in whole or in part, for United States federal
income tax purposes; or (iii) the Trust is, or shall be within 90 days after the
date of such Opinion of Counsel, subject to more than a de minimis amount of
other taxes, duties, assessments or other governmental charges. The Trust or the
Corporation shall request and receive such Opinion of Counsel with regard to
such matters within a reasonable period of time after the Trust or the
Corporation shall have become aware of the possible occurrence of any of the
events described in clauses (i) through (iii) above.
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"Trust" means Crescent Capital Trust I, a Delaware statutory business trust
created by the Trust Agreement.
"Trust Agreement" means the Amended and Restated Trust Agreement, dated
_______ __, 1999, of the Trust, as amended, modified or supplemented in
accordance with the applicable provisions thereof, among the trustees of the
trust named therein, the Corporation, as depositor, and the holders from time to
time of undivided beneficial ownership interests in the assets of the Trust,
including all exhibits thereto, including, for all purposes of the Trust
Agreement, and any such modification, amendment or supplement, the provisions of
the Trust Indenture Act that are deemed to be a part of and govern the Trust
Agreement and any such modification, amendment or supplement, respectively.
"Trustee" means Wilmington Trust Company and, subject to the provisions of
Article IX, shall also include its successors and assigns, and, if at any time
there is more than one Person acting in such capacity hereunder, "Trustee" shall
mean each such Person.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended,
subject to the provisions of Sections 11.1, 11.2, and 12.1 and any successor
statute thereto, in each case as amended from time to time.
"Trust Securities" means the Common Securities and Preferred Securities,
collectively.
"Voting Stock" as applied to stock of any Person, means shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person having ordinary voting power for the election of a majority of
the directors (or the equivalent) of such Person, other than shares, interests,
participations or other equivalents having such power only by reason of the
occurrence of a contingency.
ARTICLE II
ISSUE, DESCRIPTION, TERMS, CONDITIONS REGISTRATION
AND EXCHANGE OF THE DEBENTURES
SECTION 2.1 DESIGNATION AND PRINCIPAL AMOUNT.
There are hereby authorized Debentures designated the "___% Junior
Subordinated Deferrable Interest Debentures due _______ __, 2029," limited in
aggregate principal amount to not more than $__________ which amount shall be as
set forth in any written order of the Corporation for the authentication and
delivery of Debentures pursuant to Section 2.5.
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SECTION 2.2 MATURITY.
The Maturity Date shall be the Scheduled Maturity Date.
SECTION 2.3 FORM AND PAYMENT.
The Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Debentures issued in
certificated form shall be payable, the transfer of such Debentures shall be
registrable and such Debentures shall be exchangeable for Debentures bearing
identical terms and provisions at the office or agency of the Trustee; provided,
however, that payment of interest may be made at the option of the Corporation
by check mailed to the holder at such address as shall appear in the Debenture
Register or by wire transfer to an account maintained by the holder as specified
in the Debenture Register, provided that the holder provides proper wire
transfer instructions by the Regular Record Date. Notwithstanding the foregoing,
so long as the holder of any Debentures is the Property Trustee, the payment of
the principal of and interest (including Compounded Interest and Additional
Interest, if any) on such Debentures held by the Property Trustee shall be made
at such place and to such account as may be designated by the Property Trustee.
Debentures shall be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the Depositary for such Global Securities
shall be DTC.
SECTION 2.4 INTEREST.
(a) Each Debenture shall bear interest at the rate of ___% per annum (the
"Coupon Rate") from the original date of issuance until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article IV) quarterly in arrears on March 31, June
30, September 30 and December 31 of each year (each, an "Interest Payment Date,"
commencing on _______ __, 1999), to the Person in whose name such Debenture or
any Predecessor Debenture is registered at the close of business on the Regular
Record Date next preceding such Interest Payment Date.
(b) The amount of interest payable for any period shall be computed on the
basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, shall be computed on the
basis of the actual number of days elapsed in such period. In the event that any
date on which interest is payable on the Debentures is not a Business Day, then
payment of interest payable on such date shall be made on the next succeeding
day which is a Business Day (and without any interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day (and without any reduction of interest or any other
payment in respect of any such
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acceleration), in each case with the same force and effect as if made on the
date such payment was originally payable.
(c) If, at any time while the Property Trustee is the holder of any
Debentures, the Trust or the Property Trustee is required to pay any taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Corporation shall pay as additional interest ("Additional
Interest") on the Debentures held by the Property Trustee, such additional
amounts as shall be required so that the net amounts received and retained by
the Trust and the Property Trustee after paying such taxes, duties, assessments
or other governmental charges shall be equal to the amounts the Trust and the
Property Trustee would have received had no such taxes, duties, assessments or
other governmental charges been imposed.
SECTION 2.4A DEFAULTED INTEREST.
Any interest on any Debenture that is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and (to the extent that
payment of such interest is enforceable) interest or any overdue installment of
interest at the Coupon Rate, compounded quarterly (herein called "Defaulted
Interest") shall, notwithstanding the provisions of Section 2.4(a), forthwith
cease to be payable to the holder on the relevant Regular Record Date by virtue
of having been such holder; and such Defaulted Interest shall be paid by the
Corporation, at its election, as provided in clause (a) or clause (b) below:
(a) The Corporation may make payment of any Defaulted Interest on
Debentures to the Persons in whose names such Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner: the Corporation shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such Debenture and the
date of the proposed payment, and at the same time the Corporation shall deposit
with the Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the benefit of the
Persons entitled to such Defaulted Interest as herein provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 nor less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Corporation of such special record date and, in the name and at the expense
of the Corporation, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first class postage
prepaid, to each Debentureholder at his or her address as it appears in the
Debenture Register, not less than 10 days prior to such special record date.
Notice of the proposed payment of such Defaulted Interest and the special record
date therefor having been mailed as aforesaid, such Defaulted Interest shall be
paid to the Persons in whose names such Debentures (or
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their respective Predecessor Debentures) are registered on such special record
date and shall be no longer payable pursuant to the following clause (b).
(b) The Corporation may make payment of any Defaulted Interest on any
Debentures in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Debentures may be listed, and upon such
notice as may be required by such exchange if, after notice given by the
Corporation to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
SECTION 2.5 EXECUTION AND AUTHENTICATIONS.
(a) The Debentures shall be signed on behalf of the Corporation by its
Chairman, President or one of its Vice Presidents, under its corporate seal
attested by its Secretary or one of its Assistant Secretaries. Signatures may be
in the form of a manual or facsimile signature. The Corporation may use the
facsimile signature of any Person who shall have been a Chairman, President or
Vice President thereof, or of any Person who shall have been a Secretary or
Assistant Secretary thereof, notwithstanding the fact that at the time the
Debentures shall be authenticated and delivered or disposed of such Person shall
have ceased to be the Chairman, President or a Vice President, or the Secretary
or an Assistant Secretary, of the Corporation (and any such signature shall be
binding on the Corporation). The seal of the Corporation may be in the form of a
facsimile of such seal and may be impressed, affixed, imprinted or otherwise
reproduced on the Debentures. The Debentures may contain such notations, legends
or endorsements required by law, stock exchange rule or usage. Each Debenture
shall be dated the date of its authentication by the Trustee.
(b) A Debenture shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Debenture so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
(c) At any time and from time to time after the execution and delivery of
this Indenture, the Corporation may deliver Debentures executed by the
Corporation to the Trustee for authentication, together with a written order of
the Corporation for the authentication and delivery of such Debentures signed by
its Chairman, President or any Vice President and its Secretary or any Assistant
Secretary, and the Trustee in accordance with such written order shall
authenticate and make available for delivery such Debentures.
(d) In authenticating such Debentures and accepting the additional
responsibilities under this Indenture in relation to such Debentures, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
(e) The Trustee shall not be required to authenticate such Debentures if
the issue of such Debentures pursuant to this Indenture shall affect the
Trustee's own rights, duties or immunities
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under the Debentures and this Indenture or otherwise in a manner that is not
reasonably acceptable to the Trustee.
SECTION 2.6 REGISTRATION OF TRANSFER AND EXCHANGE.
(a) Debentures may be exchanged upon presentation thereof at the office or
agency of the Corporation designated for such purpose, for other Debentures and
for a like aggregate principal amount, upon payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, all as provided in
this Section 2.6. In respect of any Debentures so surrendered for exchange, the
Corporation shall execute, the Trustee shall authenticate and such office or
agency shall deliver in exchange therefor the Debenture or Debentures that the
Debenture holder making the exchange shall be entitled to receive, bearing
numbers not contemporaneously outstanding.
(b) The Corporation shall keep, or cause to be kept, at its office or
agency designated for such purpose or such other location designated by the
Corporation a register or registers (herein referred to as the "Debenture
Register") in which, subject to such reasonable regulations as it may prescribe,
the Corporation shall register the Debentures and the transfers of Debentures as
in this Article II provided and which at all reasonable times shall be open for
inspection by the Trustee. The registrar for the purpose of registering
Debentures and transfer of Debentures as herein provided shall be appointed as
authorized by Board Resolution (the "Debenture Registrar"). Upon surrender for
transfer of any Debenture at the office or agency of the Corporation designated
for such purpose, the Corporation shall execute, the Trustee shall authenticate
and such office or agency shall make available for delivery in the name of the
transferee or transferees a new Debenture or Debentures for a like aggregate
principal amount. All Debentures presented or surrendered for exchange or
registration of transfer, as provided in this Section 2.6, shall be accompanied
(if so required by the Corporation or the Debenture Registrar) by a written
instrument or instruments of transfer, in form satisfactory to the Corporation
or the Debenture Registrar, duly executed by the registered holder or by such
holder's duly authorized attorney in writing.
(c) No service charge shall be made for any exchange or registration of
transfer of Debentures, or issue of new Debentures in case of partial
redemption, but the Corporation may require payment of a sum sufficient to cover
any tax or other governmental charge in relation thereto, other than exchanges
pursuant to Section 2.7, Section 3.5(b) and Section 11.4 not involving any
transfer.
(d) The Corporation shall not be required (i) to issue, exchange or
register the transfer of any Debentures during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Debentures and ending at the close of business on
the day of such mailing; nor (ii) to register the transfer of or exchange any
Debentures or portions thereof called for redemption.
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(e) Notwithstanding any other provision of this Indenture, transfers and
exchanges of Debentures and beneficial interests in a Global Security, whether
pursuant to this Article II, Section 3.5, Article IX or otherwise, shall be made
only in accordance with this Section 2.6(e).
(i) A Debenture that is not a Global Security may be transferred, in
whole or in part, to a Person who takes delivery in the form of another
Debenture that is not a Global Security or may be exchanged, in whole or in
part, for another Debenture that is not a Global Security, as provided in
this Section 2.6.
(ii) A beneficial interest in a Global Security may be transferred or
exchanged for a Debenture that is not a Global Security only as provided in
Section 2.7A.
SECTION 2.7 TEMPORARY DEBENTURES.
Pending the preparation of definitive Debentures, the Corporation may
execute, and the Trustee shall authenticate and deliver, temporary Debentures
(printed, lithographed, or typewritten). Such temporary Debentures shall be
substantially in the form of the definitive Debentures in lieu of which they are
issued, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Corporation. Every
temporary Debenture shall be executed by the Corporation and be authenticated by
the Trustee upon the same conditions and in substantially the same manner, and
with like effect, as the definitive Debentures. Without unnecessary delay the
Corporation shall execute and shall furnish definitive Debentures and thereupon
any or all temporary Debentures may be surrendered in exchange therefor (without
charge to the holders), at the office or agency of the Corporation designated
for such purpose, and the Trustee shall authenticate and such office or agency
shall deliver in exchange for such temporary Debentures an equal aggregate
principal amount of definitive Debentures, unless the Corporation advises the
Trustee to the effect that definitive Debentures need not be executed and
furnished until further notice from the Corporation. Until so exchanged, the
temporary Debentures shall be entitled to the same benefits under this Indenture
as definitive Debentures authenticated and delivered hereunder.
SECTION 2.7A GLOBAL SECURITIES.
(a) Each Global Security issued under this Indenture shall be registered in
the name of the Depositary designated by the Corporation for such Global
Security or a nominee thereof and delivered to such Depositary or a nominee
thereof or custodian therefor, and each such Global Security shall constitute a
single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Debentures registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary
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with respect to such Global Security, and the Corporation is unable to locate a
qualified successor, (ii) the Corporation executes and delivers to the Trustee a
Corporation order stating that the Corporation elects to terminate the book-
entry system through the Depositary, or (iii) there shall have occurred and be
continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Debentures or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article II. If any Global Security is to be exchanged for other
Debentures or cancelled in part, or if another Debenture is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article II or (ii) the principal amount thereof shall be
reduced or increased by an amount equal to the portion thereof to be so
exchanged or cancelled, or equal to the principal amount of such Debenture to be
so exchanged for a beneficial interest therein, as the case may be, by means of
an appropriate adjustment made on the records of the Securities Registrar,
whereupon the Trustee, in accordance with Applicable Procedures, shall instruct
the Depositary or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of a Global
Security by the Depositary, accompanied by registration instructions, the
Trustee shall, subject to Section 2.6 and as otherwise provided in this Article
II, authenticate and make available for delivery any Debentures issuable in
exchange for such Global Security (or any portion thereof) in accordance with
the instructions of the Depositary. The Trustee shall not be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be fully protected in relying on, such instructions.
(d) Except as otherwise provided in the preceding provisions of this
Section 2.7A, every Debenture authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article II, Section 3.5 or Article IX or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security, unless such Debenture is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Debenture, and owners of beneficial interests in a Global
Security shall hold such interests pursuant to Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or agent. Neither the
Trustee nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Depositary.
(f) The rights of owners of beneficial interests in a Global Security shall
be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
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SECTION 2.8 MUTILATED, DESTROYED, LOST OR STOLEN DEBENTURES.
(a) In case any temporary or definitive Debenture shall become mutilated or
be destroyed, lost or stolen, the Corporation (subject to the next succeeding
sentence) shall execute, and upon the Corporation's request the Trustee (subject
as aforesaid) shall authenticate and make available for delivery, a new
Debenture bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Debenture, or in lieu of and in substitution for
the Debenture so destroyed, lost or stolen. In every case the applicant for a
substituted Debenture shall furnish to the Corporation and the Trustee such
security or indemnity as may be required by them to save each of them harmless,
and, in every case of destruction, loss or theft, the applicant shall also
furnish to the Corporation and the Trustee evidence to their satisfaction of the
destruction, loss or theft of the applicant's Debenture and of the ownership
thereof. The Trustee may authenticate any such substituted Debenture and make
available for delivery the same upon the written request or authorization of any
officer of the Corporation. Upon the issuance of any substituted Debenture, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
In case any Debenture that has matured or is about to mature shall become
mutilated or be destroyed, lost or stolen, the Corporation may, instead of
issuing a substitute Debenture, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated Debenture) if the
applicant for such payment shall furnish to the Corporation and the Trustee such
security or indemnity as they may require to save them harmless, and, in case of
destruction, loss or theft, evidence to the satisfaction of the Corporation and
the Trustee of the destruction, loss or theft of such Debenture and of the
ownership thereof.
(b) Every replacement Debenture issued pursuant to the provisions of this
Section 2.8 shall constitute an additional contractual obligation of the
Corporation whether or not the mutilated, destroyed, lost or stolen Debenture
shall be found at any time, or be enforceable by anyone, and shall be entitled
to all the benefits of this Indenture equally and proportionately with any and
all other Debentures duly issued hereunder. All Debentures shall be held and
owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Debentures, and shall preclude (to the extent lawful) any and all other
rights or remedies, notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.9 CANCELLATION.
All Debentures surrendered for the purpose of payment, redemption, exchange
or registration of transfer shall, if surrendered to the Corporation or any
paying agent, be delivered to the Trustee for cancellation, or, if surrendered
to the Trustee, shall be canceled by it, and no Debentures shall be issued in
lieu thereof except as expressly required or permitted by any of the provisions
of this Indenture. On request of the Corporation at the time of such surrender,
the Trustee shall deliver to the Corporation canceled Debentures held by the
Trustee. In the absence of such request the Trustee
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may dispose of canceled Debentures in accordance with its standard procedures.
If the Corporation shall otherwise acquire any of the Debentures, however, such
acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.10 BENEFIT OF INDENTURE.
Nothing in this Indenture or in the Debentures, express or implied, shall
give or be construed to give to any Person, other than the parties hereto and
the holders of the Debentures (and, with respect to the provisions of Article
XVI, the holders of Senior Indebtedness) any legal or equitable right, remedy or
claim under or in respect of this Indenture, or under any covenant, condition or
provision herein contained; all such covenants, conditions, and provisions being
for the sole benefit of the parties hereto and of the holders of the Debentures
(and, with respect to the provisions of Article XVI, the holders of Senior
Indebtedness).
SECTION 2.11 AUTHENTICATING AGENT.
(a) So long as any of the Debentures remain Outstanding there may be an
Authenticating Agent for any or all such Debentures, which the Trustee shall
have the right to appoint. Said Authenticating Agent shall be authorized to act
on behalf of the Trustee to authenticate Debentures issued upon exchange,
transfer or partial redemption thereof, and Debentures so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All references in
this Indenture to the authentication of Debentures by the Trustee shall be
deemed to include authentication by an Authenticating Agent. Each Authenticating
Agent shall be acceptable to the Corporation and shall be a corporation that has
a combined capital and surplus, as most recently reported or determined by it,
sufficient under the laws of any jurisdiction under which it is organized or in
which it is doing business to conduct a trust business, and that is otherwise
authorized under such laws to conduct such business and is subject to
supervision or examination by federal or state authorities. If at any time any
Authenticating Agent shall cease to be eligible in accordance with these
provisions, it shall resign immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Corporation. The Trustee may at
any time (and upon request by the Corporation shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Corporation. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Corporation. Any
successor Authenticating Agent, upon acceptance of its appointment hereunder,
shall become vested with all the rights, powers and duties of its predecessor
hereunder as if originally named as an Authenticating Agent pursuant hereto.
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SECTION 2.12 RIGHT OF SET-OFF.
With respect to the Debentures initially issued to the Trust,
notwithstanding anything to the contrary herein, the Corporation shall have the
right to set-off any payment it is otherwise required to make in respect of any
such Debenture to the extent the Corporation has theretofore made, or is
concurrently on the date of such payment making, a payment under the Preferred
Securities Guarantee relating to such Debenture or to a holder of Preferred
Securities pursuant to an action undertaken under Section 7.8 of this Indenture.
SECTION 2.13 CUSIP NUMBERS.
The Corporation in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Debentureholders; provided that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission or such numbers. The Corporation will promptly
notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF DEBENTURES
SECTION 3.1 REDEMPTION.
Subject to the Corporation having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, the
Corporation may redeem the Debentures issued hereunder on and after the dates
set forth in and in accordance with the terms of this Article III.
SECTION 3.2 SPECIAL EVENT REDEMPTION.
Subject to the Corporation having received prior regulatory approval, if
then required under applicable capital guidelines or regulatory policies, if a
Special Event has occurred and is continuing, then, notwithstanding Section 3.3,
the Corporation shall have the right upon not less than 30 days nor more than 60
days notice to the holders of the Debentures to redeem the Debentures, in whole
but not in part, for cash within 90 days following the occurrence of such
Special Event (the "90-Day Period") at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued and unpaid interest thereon to
the date of such redemption (the "Redemption Price"), provided that if such
Special Event is a Tax Event and at the time there is available to the
Corporation the opportunity to eliminate, within the 90-Day Period, such Tax
Event by taking some ministerial action (a "Ministerial Action"), such as filing
a form or making an election, or pursuing some other similar reasonable measure
which has no adverse effect on the Corporation, the Trust or
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the holders of the Trust Securities, the Corporation shall pursue such
Ministerial Action in lieu of redemption, and, provided further, that the
Corporation shall have no right to redeem the Debentures while the Trust is
pursuing any Ministerial Action pursuant to its obligations under the Trust
Agreement. The Redemption Price shall be paid prior to 12:00 noon, New York
time, on the date of such redemption or such earlier time as the Corporation
determines, provided that the Corporation shall deposit with the Trustee an
amount sufficient to pay the Redemption Price by 10:00 a.m., New York time, on
the date such Redemption Price is to be paid.
SECTION 3.3 OPTIONAL REDEMPTION BY CORPORATION.
(a) Subject to the provisions of Section 3.3(b), except as otherwise may be
specified in this Indenture but not in limitation of Section 3.2, the
Corporation shall have the right to redeem the Debentures, in whole or in part,
from time to time, on or after ______ __, 2004, at a Redemption Price equal to
100% of the principal amount to be redeemed plus any accrued and unpaid interest
thereon to the date of such redemption. Any redemption pursuant to this Section
3.3 shall be made upon not less than 30 days nor more than 60 days notice to the
holder of the Debentures, at the Redemption Price. If the Debentures are only
partially redeemed pursuant to this Section 3.3, the Debentures shall be
redeemed pro rata or by lot or in such other manner as the Trustee shall deem
appropriate and fair in its discretion. The Redemption Price shall be paid prior
to 12:00 noon, New York time, on the date of such redemption or at such earlier
time as the Corporation determines provided that the Corporation shall deposit
with the Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m.,
New York time, on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Debentures would result in the delisting
of the Preferred Securities issued by the Trust from the American Stock Exchange
or any national securities exchange or other organization on which the Preferred
Securities are then listed, the Corporation shall not be permitted to effect
such partial redemption and may only redeem the Debentures in whole.
SECTION 3.4 NOTICE OF REDEMPTION.
(a) In case the Corporation shall desire to exercise such right to redeem
all or a portion of the Debentures in accordance with the right reserved so to
do, the Corporation shall, or shall cause the Trustee to, upon receipt of 45
days written notice from the Corporation (which notice shall, in the event of a
partial redemption, include a representation to the effect that such partial
redemption will not result in the delisting of the Preferred Securities as
described in Section 3.3(b) hereof), give notice of such redemption to holders
of the Debentures to be redeemed by mailing, first class postage prepaid, a
notice of such redemption not less than 30 days and not more than 60 days before
the date fixed for redemption to such holders at their last addresses as they
shall appear upon the Debenture Register unless a shorter period is specified in
the Debentures to be redeemed. Any notice that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the registered holder receives the notice. In any case, failure duly to give
such notice to the holder of any Debenture designated for redemption in whole or
in part, or any defect in the
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notice, shall not affect the validity of the proceedings for the redemption of
any other Debentures. In the case of any redemption of Debentures prior to the
expiration of any restriction on such redemption provided in the terms of such
Debentures or elsewhere in this Indenture, the Corporation shall furnish the
Trustee with an Officers' Certificate evidencing compliance with any such
restriction. Each such notice of redemption shall identify the Debenture to be
redeemed (including CUSIP numbers, if any) and shall specify the date fixed for
redemption and the Redemption Price and shall state that payment of the
Redemption Price shall be made at the office or agency of the Corporation or at
the Corporate Trust Office, upon presentation and surrender of such Debentures,
that interest accrued to the date fixed for redemption shall be paid as
specified in said notice and that from and after said date interest shall cease
to accrue. If less than all the Debentures are to be redeemed, the notice to the
holders of the Debentures shall specify the particular Debentures to be
redeemed. If the Debentures are to be redeemed in part only, the notice shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the redemption date, upon surrender of such Debenture, a new
Debenture or Debentures in principal amount equal to the unredeemed portion
thereof shall be issued.
(b) If less than all the Debentures are to be redeemed, the Corporation
shall give the Trustee at least 45 days notice in advance of the date fixed for
redemption as to the aggregate principal amount of Debentures to be redeemed,
and thereupon the Trustee shall select, by lot or in such other manner as it
shall deem appropriate and fair in its discretion, the portion or portions
(equal to $10 or any integral multiple thereof) of the Debentures to be redeemed
and shall thereafter promptly notify the Corporation in writing of the numbers
of the Debentures to be redeemed, in whole or in part. The Corporation may, if
and whenever it shall so elect pursuant to the terms hereof, by delivery of
instructions signed on its behalf by its Chairman, President or any Vice
President, instruct the Trustee or any paying agent to call all or any part of
the Debentures for redemption and to give notice of redemption in the manner set
forth in this Section 3.4, such notice to be in the name of the Corporation or
its own name as the Trustee or such paying agent may deem advisable. In any case
in which notice of redemption is to be given by the Trustee or any such paying
agent, the Corporation shall deliver or cause to be delivered to, or permit to
remain with, the Trustee or such paying agent, as the case may be, such
Debenture Register, transfer books or other records, or suitable copies or
extracts therefrom, sufficient to enable the Trustee or such paying agent to
give any notice by mail that may be required under the provisions of this
Section 3.4.
SECTION 3.5 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been completed as
above provided, subject to the provisions of Section 3.2 the Debentures or
portions of Debentures to be redeemed specified in such notice shall become due
and payable on the date and at the place stated in such notice at the applicable
Redemption Price, and interest on such Debentures or portions of Debentures
shall cease to accrue on and after the date fixed for redemption, unless the
Corporation shall default in the payment of such Redemption Price with respect
to any such Debenture or portion thereof. On presentation and surrender of such
Debentures on or after the date fixed for redemption at the place of payment
specified in the notice, said Debentures shall be paid and redeemed at the
Redemption
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Price (but if the date fixed for redemption is an Interest Payment Date, the
interest installment payable on such date shall not be part of the Redemption
Price and shall be payable instead to the registered holder at the close of
business on the Regular Record Date next preceding the next succeeding Interest
Payment Date).
(b) Subject to the provisions of Article II, upon presentation of any
Debenture that is to be redeemed in part only, the Corporation shall execute and
the Trustee shall authenticate and the office or agency where the Debenture is
presented shall make available for delivery to the holder thereof, at the
expense of the Corporation, a new Debenture of authorized denomination in
principal amount equal to the unredeemed portion of the Debenture so presented.
SECTION 3.6 NO SINKING FUND.
The Debentures are not entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 4.1 EXTENSION OF INTEREST PAYMENT PERIOD.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time and from time to time during the
term of the Debentures, to defer payments of interest by extending the interest
payment period of such Debentures for a period not exceeding 20 consecutive
quarters (the "Extended Interest Payment Period"), during which Extended
Interest Payment Period no interest shall be due and payable; provided that no
Extended Interest Payment Period may extend beyond the Maturity Date. Interest,
which has been deferred because of the extension of the interest payment period
pursuant to this Section 4.1, shall bear interest thereon at the rate of __% per
annum, compounded quarterly during the Extended Interest Payment Period (the
"Compounded Interest"). At the end of the Extended Interest Payment Period, the
Corporation shall calculate (and deliver such calculation to the Trustee) and
pay all interest accrued and unpaid on the Debentures, including any Additional
Interest and Compounded Interest in respect of such period (together, "Deferred
Interest") that shall be payable to the holders of the Debentures in whose names
the Debentures are registered in the Debenture Register as of the close of
business on the Regular Record Date immediately preceding the end of the
Extended Interest Payment Period. Before the termination of any Extended
Interest Payment Period, the Corporation may further extend such period,
provided that such period together with all such further extensions thereof
shall not exceed 20 consecutive quarters, or extend beyond the Maturity Date of
the Debentures. Upon the termination of any Extended Interest Payment Period and
upon the payment of all Deferred Interest then due, the Corporation may commence
a new Extended Interest Payment Period, subject to the foregoing requirements.
No interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Corporation may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period,
which prepayments shall be
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payable to the holders of the Debentures in whose names the Debentures are
registered in the Debenture Register as of the close of business on the Regular
Record Date immediately preceding the date of prepayment.
SECTION 4.2 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only registered holder of the Debentures
at the time the Corporation selects an Extended Interest Payment Period, the
Corporation shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period at least one Business Day before the earlier of (i) the next
succeeding date on which Distributions (as such term is defined in the Trust
Agreement) on the Trust Securities issued by the Trust are payable; or (ii) the
date the Trust is required to give notice of the record date or the date such
Distributions are payable to the American Stock Exchange or other applicable
self-regulatory organization or to holders of the Preferred Securities issued by
the Trust, but in any event at least one Business Day before such record date.
(b) If the Property Trustee is not the only holder of the Debentures at the
time the Corporation selects an Extended Interest Payment Period, the
Corporation shall give the holders of the Debentures and the Trustee written
notice of its selection of such Extended Interest Payment Period at least one
Business Day before the earlier of (i) the next succeeding Interest Payment
Date; or (ii) the date the Corporation is required to give notice of the record
or payment date of such interest payment to the American Stock Exchange or
other applicable self-regulatory organization or to holders of the Debentures,
but in any event at least one Business Day before such record date.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 4.2 shall be counted as one of the 20 quarters permitted in
the Minimum Extended Interest Payment Period permitted under Section 4.1.
SECTION 4.3 LIMITATION ON TRANSACTIONS.
If (i) the Corporation shall exercise its right to defer payment of
interest as provided in Section 4.1; (ii) there shall have occurred any Event of
Default that is continuing; or (iii) the Corporation is in default with respect
to its obligations under the Preferred Securities Guarantee, then (a) the
Corporation will not and will not permit any Subsidiary to declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock
(other than (1) the reclassification of any class of the Corporation's capital
stock into another class of its capital stock; (2) dividends or distributions
payable in any class of the Corporation's common stock, (3) any declaration of a
dividend in connection with the implementation of a shareholder rights plan, or
the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (4) payments under the Preferred
Securities Guarantee and (5) purchases of the Corporation's common stock related
to the rights under any of the Corporation's stock benefit plans for its or its
Subsidiaries' directors, officers or employees); (b) the Corporation will not
and will not permit any Subsidiary to make any payment
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of interest, principal or premium, if any, or repay, repurchase or redeem any
debt securities issued by the Corporation (including Other Debentures) which
rank pari passu with or junior to the Debentures; or make any guarantee payments
with respect to any guarantee by the Corporation of the debt securities of any
Subsidiary of the Corporation if such guarantee ranks pari passu with or is
junior to the Debentures provided, however, that notwithstanding the foregoing
the Corporation may make payments pursuant to its obligations under the
Preferred Securities Guarantee; and (c) the Corporation shall not redeem,
purchase or acquire less than all of the outstanding Debentures or any of the
Preferred Securities.
ARTICLE V
PARTICULAR COVENANTS OF THE CORPORATION
SECTION 5.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Corporation shall duly and punctually pay or cause to be paid the
principal of and interest on the Debentures at the time and place and in the
manner provided herein.
SECTION 5.2 MAINTENANCE OF AGENCY.
So long as any of the Debentures remain Outstanding, the Corporation shall
maintain a designated office or agency in the Place of Payment where (i)
Debentures may be presented for payment; (ii) Debentures may be presented as
hereinabove authorized for registration of transfer and exchange; and (iii)
notice and demands to or upon the Corporation in respect of the Debentures and
this Indenture may be given or served, such designation to continue with respect
to such office or agency until the Corporation shall, by written notice signed
by its Chairman, President or a Vice President and delivered to the Trustee,
designate some other office or agency for such purposes or any of them. If at
any time the Corporation shall fail to maintain any such required office or
agency or shall fail to furnish the Trustee with the address thereof, such
presentations, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Corporation hereby appoints the Trustee as its
agent to receive all such presentations, notices and demands. In addition to any
such office or agency, the Corporation may from time to time designate one or
more offices or agencies where the Debentures may be presented for registration
or transfer and for exchange in the manner provided herein, and the Corporation
may from time to time rescind such designation as the Corporation may deem
desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Corporation of its obligation to
maintain any such office or agency in the Place of Payment for such purposes.
The Corporation shall give the Trustee prompt written notice of any such
designation or rescission thereof.
SECTION 5.3 PAYING AGENTS.
(a) If the Corporation shall appoint one or more paying agents for the
Debentures, other than the Trustee, the Corporation shall cause each such paying
agent to execute and deliver to the
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Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provisions of this Section 5.3:
(i) that it shall hold all sums held by it as such agent for the
payment of the principal of or interest on the Debentures (whether such
sums have been paid to it by the Corporation or by any other obligor of
such Debentures) in trust for the benefit of the Persons entitled thereto;
(ii) that it shall give the Trustee prompt written notice of any
failure by the Corporation (or by any other obligor of such Debentures) to
make any payment of the principal of or interest on the Debentures when the
same shall be due and payable;
(iii) that it shall, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(ii) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such paying agent; and
(iv) that it shall perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Corporation shall act as its own paying agent with respect to
the Debentures, it shall on or before each due date of the principal of or
interest on such Debentures, set aside, segregate and hold in trust for the
benefit of the Persons entitled thereto a sum sufficient to pay such principal
or interest so becoming due on Debentures until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and shall promptly notify
the Trustee of such action, or any failure (by it or any other obligor on such
Debentures) to take such action. Whenever the Corporation shall have one or more
paying agents for the Debentures, it shall, prior to each due date of the
principal of or interest on any Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such sum to be held
in trust for the benefit of the Persons entitled to such principal or interest,
and (unless such paying agent is the Trustee) the Corporation shall promptly
notify the Trustee of this action or failure so to act.
(c) Notwithstanding anything in this Section 5.3 to the contrary, (i) the
agreement to hold sums in trust as provided in this Section 5.3 is subject to
the provisions of Section 13.3 and 13.4; and (ii) the Corporation may at any
time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or direct any paying agent to pay, to
the Trustee all sums held in trust by the Corporation or such paying agent, such
sums to be held by the Trustee upon the same terms and conditions as those upon
which such sums were held by the Corporation or such paying agent; and, upon
such payment by any paying agent to the Trustee, such paying agent shall be
released from all further liability with respect to such money.
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SECTION 5.4 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE.
The Corporation, whenever necessary to avoid or fill a vacancy in the
office of Trustee, shall appoint, in the manner provided in Section 9.11, a
Trustee that meets the requirements of Section 9.10, so that there shall at all
times be a Trustee hereunder.
SECTION 5.5 COMPLIANCE WITH CONSOLIDATION PROVISIONS.
The Corporation shall not, while any of the Debentures remain outstanding,
consolidate with, or merge into, or merge into itself, or convey, transfer or
lease all or substantially all of its property and assets to any other entity
and no entity shall consolidate with or merge into the Corporation or convey,
transfer or lease substantially all of its properties and assets to the
Corporation, unless the provisions of Article XII hereof are complied with.
SECTION 5.6 LIMITATION ON TRANSACTIONS.
If Debentures are issued to the Trust or a trustee of the Trust in
connection with the issuance of Trust Securities by the Trust and (i) there
shall have occurred any event that would constitute an Event of Default; (ii)
the Corporation shall be in default with respect to its payment of any
obligations under the Preferred Securities Guarantee relating to the Trust; or
(iii) the Corporation shall have given notice of its election to defer payments
of interest on such Debentures by extending the interest payment period as
provided in this Indenture and such period, or any extension thereof, shall be
continuing, then (a) the Corporation will not and will not permit any Subsidiary
to declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
Corporation's capital stock (other than (1) the reclassification of any class of
the Corporation's capital stock into another class of capital stock, (2)
dividends or distributions payable in any class of the Corporation's common
stock, (3) any declaration of a dividend in connection with the implementation
of a shareholder rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(4) payments under the Preferred Securities Guarantee and (5) purchases of the
Corporation's common stock related to the rights under any of the Corporation's
stock benefit plans for its or its subsidiaries' directors, officers or
employees); (b) the Corporation will not and will not permit any Subsidiary to
make any payment of interest, principal or premium, if any, or repay, repurchase
or redeem any debt securities issued by the Corporation (including Other
Debentures) which rank pari passu with or junior to the Debentures; or make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation if such guarantee ranks pari
passu with or junior to the Debentures; provided, however, that the Corporation
may make payments pursuant to its obligations under the Preferred Securities
Guarantee; and (c) the Corporation shall not redeem, purchase or acquire less
than all of the outstanding Debentures or any of the Preferred Securities.
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SECTION 5.7 COVENANTS AS TO THE TRUST.
For so long as such Trust Securities of the Trust remain outstanding, the
Corporation shall (i) maintain 100% direct or indirect ownership of the Common
Securities of the Trust; provided, however, that any permitted successor of the
Corporation under this Indenture may succeed to the Corporation's ownership of
the Common Securities; (ii) not voluntarily dissolve, wind up or liquidate the
Trust, except upon prior regulatory approval if then so required under
applicable capital guidelines or regulatory policies, and use its reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with a distribution of Debentures, the redemption of all of the Trust Securities
of the Trust or certain mergers, consolidations or amalgamations, each as
permitted by the Trust Agreement; and (b) to otherwise continue not to be
treated as an association taxable as a corporation or partnership for United
States federal income tax purposes; and (iii) use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an individual
beneficial interest in the Debentures. In connection with the distribution of
the Debentures to the holders of the Preferred Securities issued by the Trust
upon a Dissolution Event, the Corporation shall use its best efforts to list
such Debentures on the American Stock Exchange or on such other exchange as the
Preferred Securities are then listed.
SECTION 5.8 COVENANTS AS TO PURCHASES.
Prior to _______ __, 2004, the Corporation shall not purchase any
Debentures, in whole or in part, from the Trust, except as otherwise permitted
by Section 3.2.
SECTION 5.9 RESERVE FOR INTEREST PAYMENTS.
For so long as the Debentures remain outstanding, the Corporation will not:
(i) declare or pay cash dividends on, or purchase, redeem or acquire for value
any shares of the capital stock of the Corporation, (ii) return any capital to
holders of the capital stock of the Corporation, or (iii) make any distribution
of assets to holders of the capital stock of the Corporation, unless the
Corporation retains cash, cash equivalents or marketable securities (as
determined in accordance with Generally Accepted Accounting Principles) in an
amount sufficient to pay the next succeeding eight consecutive quarterly
interest payments on the Debentures.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE CORPORATION AND THE TRUSTEE
SECTION 6.1 CORPORATION TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
DEBENTUREHOLDERS.
The Corporation shall furnish or cause to be furnished to the Trustee a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the holders of the Debentures as of each January 1 and June 30 of
each year and at such other times as the Trustee may request in writing within
30 days after receipt by the Corporation; provided that the Corporation shall
not be
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obligated to furnish or cause to furnish such list at any time that the list
shall not differ in any respect from the most recent list furnished to the
Trustee by the Corporation; provided, however, that, in either case, no such
list need be furnished if the Trustee shall be the Debenture Registrar.
SECTION 6.2 PRESERVATION OF INFORMATION COMMUNICATIONS WITH DEBENTUREHOLDERS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Debentures received
by the Trustee in its capacity as registrar for the Debentures (if acting in
such capacity) or in any other capacity in respect of the Debentures.
(b) The Trustee may destroy any list furnished to it as provided in Section
6.1 upon receipt of a new list so furnished.
(c) Debentureholders may communicate as provided in Section 312(b) of the
Trust Indenture Act with other Debentureholders with respect to their rights
under this Indenture or under the Debentures. The Trustee shall comply with the
provisions of said Section and shall be entitled to the protections provided by
Section 312(c) of the Trust Indenture Act.
SECTION 6.3 REPORTS BY THE CORPORATION.
(a) The Corporation covenants and agrees to file with the Trustee, within
15 days after the Corporation is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Corporation may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Corporation is not required to file information,
documents or reports pursuant to either of such Sections, then to file with the
Trustee and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such of the supplementary and
periodic information, documents and reports that may be required pursuant to
Section 13 of the Exchange Act in respect of a security listed and registered on
a national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Corporation covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from to time
by the Commission, such additional information, documents and reports with
respect to compliance by the Corporation with the conditions and covenants
provided for in this Indenture as may be required from time to time by such
rules and regulations.
(c) The Corporation covenants and agrees to transmit to the
Debentureholders, in the manner and to the extent provided in Section 313(c) of
the Trust Indenture Act, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports
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required to be filed by the Corporation pursuant to subsections (a) and (b) of
this Section 6.3 as may be required by rules and regulations prescribed from
time to time by the Commission.
(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Corporation's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 6.4 REPORTS BY THE TRUSTEE.
(a) The Trustee shall transmit to Debentureholders such reports concerning
the Trustee and its actions under this Indenture as may be required pursuant to
Section 313 of the Trust Indenture Act at the times and in the manner provided
pursuant thereto. If required by Section 313(a) of the Trust Indenture Act, the
Trustee shall, within sixty days after each May 15 following the date of this
Indenture deliver to Debentureholders a brief report, dated as of such May 15,
which complies with the provisions of such Section 313(a).
(b) A copy of each such report shall, at the time of such transmission to
Debentureholders, be filed by the Trustee with each stock exchange, if any, upon
which the Debentures are listed, with the Commission and with the Corporation.
The Corporation will promptly notify the Trustee when any Debentures become
listed on any stock exchange.
SECTION 6.5 STATEMENTS AS TO DEFAULT.
(a) The Corporation will deliver to the Trustee annually, within 120 days
after the end of each of its fiscal years, a certificate, from its principal
executive officer, principal financial officer or principal accounting officer,
stating whether or not to the best knowledge of the signer thereof the
Corporation is in compliance (without regard to periods of grace or notice
requirements) with all conditions and covenants under this Indenture, and if the
Corporation shall not be in compliance, specifying such non-compliance and the
nature and status thereof of which such signer may have knowledge.
(b) The Corporation shall deliver to the Trustee, as soon as possible and
in any event within five days after the Corporation becomes aware of the
occurrence of any Event of Default or an event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Corporation proposes to take with respect thereto.
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ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
ON EVENT OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT.
(a) Whenever used herein with respect to the Debentures, "Event of Default"
means any one or more of the following events that has occurred and is
continuing:
(i) the Corporation defaults in the payment of any installment of
interest (including Additional Interest or Compounded Interest, if any)
upon any of the Debentures, as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided,
however, that a valid extension of an interest payment period by the
Corporation in accordance with the terms of Article IV of this Indenture
shall not constitute a default in the payment of interest for this purpose;
(ii) the Corporation defaults in the payment of the principal on the
Debentures as and when the same shall become due and payable whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise;
(iii) the Corporation fails to observe or perform any other of its
covenants or agreements with respect to the Debentures for a period of 90
days after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Corporation by the Trustee, by
registered or certified mail, or to the Corporation and the Trustee by the
holders of at least 25% in aggregate principal amount of the Debentures at
the time Outstanding;
(iv) the Corporation pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case; (ii) consents to the entry
of an order for relief against it in an involuntary case; (iii) consents to
the appointment of a Custodian of it or for all or substantially all of its
property; or (iv) makes a general assignment for the benefit of its
creditors;
(v) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Corporation in an
involuntary case; (ii) appoints a Custodian of the Corporation for all or
substantially all of its property; or (iii) orders the liquidation of the
Corporation, and the order or decree remains unstayed and in effect for 60
days; or
(vi) the Trust shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of Debentures to holders of Trust
Securities in liquidation of their interests in the Trust; (ii) the
redemption of all of the outstanding Trust Securities of the Trust; or
(iii) certain mergers, consolidations or amalgamations, each as permitted
by the Trust Agreement.
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(b) In each and every such case, unless the principal of all the Debentures
shall have already become due and payable, either the Trustee or the holders of
not less than 25% in aggregate principal amount of the Debentures then
Outstanding hereunder, by notice in writing to the Corporation (and to the
Trustee if given by such Debentureholders) may declare the principal of all the
Debentures to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, notwithstanding
anything contained in this Indenture or in the Debentures.
(c) At any time after the principal of the Debentures shall have been so
declared due and payable, and before any judgment or decree for the payment of
the monies due shall have been obtained or entered as hereinafter provided, the
holders of a majority in aggregate principal amount of the Debentures then
Outstanding hereunder, by written notice to the Corporation and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Corporation
has paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest (including Additional Interest and Compounded Interest,
if any) upon all the Debentures and the principal of any and all Debentures that
shall have become due otherwise than by acceleration (and, without duplication
of any of the foregoing, interest upon such principal, and upon overdue
installments of interest, at the rate per annum expressed in the Debentures to
the date of such payment or deposit) and the amount payable to the Trustee under
Section 9.7; and (ii) any and all Events of Default under this Indenture, other
than the nonpayment of principal on Debentures that shall not have become due by
their terms, shall have been remedied or waived as provided in Section 7.6. No
such rescission and annulment shall extend to or shall affect any subsequent
default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any right with
respect to Debentures under this Indenture and such proceedings shall have been
discontinued or abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the Trustee, then and in
every such case the Corporation and the Trustee shall be restored respectively
to their former positions and rights hereunder, and all rights, remedies and
powers of the Corporation and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 7.2 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
(a) The Corporation covenants that (1) in case it shall default in the
payment of any installment of interest (including Additional Interest and
Compounded Interest) on any of the Debentures, and such default shall have
continued for a period of 90 Business Days; or (2) in case it shall default in
the payment of the principal of any of the Debentures when the same shall have
become due and payable, whether upon maturity of the Debentures or upon
redemption or upon declaration or otherwise, then, upon demand of the Trustee,
the Corporation shall pay to the Trustee, for the benefit of the holders of the
Debentures, the whole amount that then shall have been become due and payable on
all such Debentures for principal or interest, or both, as the case may be, with
interest upon the overdue principal and (if the Debentures are held by the Trust
or a trustee of the
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Trust, without duplication of any other amounts paid by the Trust or trustee in
respect thereof) upon overdue installments of interest at the rate per annum
expressed in the Debentures; and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, and the
amount payable to the Trustee and its counsel under Section 9.7.
(b) If the Corporation shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Corporation or other obligor upon the
Debentures and collect the monies adjudged or decreed to be payable in the
manner provided by law out of the property of the Corporation or other obligor
upon the Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Corporation or the creditors or property of either, the Trustee
shall have power to intervene in such proceedings and take any action therein
that may be permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and other papers and
documents as may be necessary or advisable in order to have the claims of the
Trustee and of the holders of the Debentures allowed for the entire amount due
and payable by the Corporation under this Indenture at the date of institution
of such proceedings and for any additional amount that may become due and
payable by the Corporation after such date, and to collect and receive any
monies or other property payable or deliverable on any such claim, and to
distribute the same after the deduction of the amount payable to the Trustee and
its counsel under Section 9.7; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the holders of the
Debentures to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to such
Debentureholders, to pay to the Trustee any amount due it under Section 9.7.
(d) All rights of action and of asserting claims under this Indenture, or
under any of the terms established with respect to Debentures, may be enforced
by the Trustee without the possession of any of such Debentures, or the
production thereof at any trial or other proceeding relating thereto, and any
such suit or proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for payment to the Trustee of any amounts due under Section 9.7, be
for the ratable benefit of the holders of the Debentures. In case of an Event of
Default hereunder, the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate judicial
proceedings as the Trustee shall deem most effectual to protect and enforce any
of such rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law. Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Debentureholder any plan of reorganization, arrangement, adjustment or
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composition affecting the Debentures or the rights of any holder thereof or to
authorize the Trustee to vote in respect of the claim of any Debentureholder in
any such proceeding.
SECTION 7.3 APPLICATION OF MONIES COLLECTED.
Any monies or other assets collected by the Trustee pursuant to this
Article VII with respect to the Debentures shall be applied in the following
order, at the date or dates fixed by the Trustee and, in case of the
distribution of such monies or other assets on account of principal or interest,
upon presentation of the Debentures, and notation thereon of the payment, if
only partially paid, and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of all
amounts payable to the Trustee under Section 9.7;
SECOND: To the payment of all Senior Indebtedness of the Corporation if
and to the extent required by Article XVI; and
THIRD: To the payment of the amounts then due and unpaid upon the
Debentures for principal and interest, in respect of which or for the
benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Debentures for principal and interest, respectively.
FOURTH: Any remaining balance to the Corporation.
SECTION 7.4 LIMITATION ON SUITS.
(a) No holder of any Debenture shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Debentures specifying such Event of Default, as hereinbefore
provided; (ii) the holders of not less than 25% in aggregate principal amount of
the Debentures then Outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as trustee
hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; (iv) the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
failed to institute any such action, suit or proceeding; and (v) during such 60
day period, the holders of a majority in principal amount of the Debentures do
not give the Trustee a direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary or any other
provisions of this Indenture, the right of any holder of the Debentures to
receive payment of the principal of and
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interest on the Debentures, as therein provided, on or after the respective due
dates expressed in such Debenture (or in the case of redemption, on the
redemption date), or to institute suit for the enforcement of any such payment
on or after such respective dates (or redemption date), shall not be impaired or
affected without the consent of such holder and by accepting a Debenture
hereunder it is expressly understood, intended and covenanted by the taker and
holder of every Debenture with every other such taker and holder and the
Trustee, that no one or more holders of Debentures shall have any right in any
manner whatsoever by virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any other of such
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures. For the protection and enforcement of the provisions of
this Section 7.4, each and every Debentureholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
SECTION 7.5 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT WAIVER.
(a) Except as otherwise provided in Section 2.8, all powers and remedies
given by this Article VII to the Trustee or to the Debentureholders shall, to
the extent permitted by law, be deemed cumulative and not exclusive of any other
powers and remedies available to the Trustee or the holders of the Debentures,
by judicial proceedings or otherwise, to enforce the performance or observance
of the covenants and agreements contained in this Indenture or otherwise
established with respect to such Debentures.
(b) No delay or omission of the Trustee or of any holder of any of the
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or an acquiescence
therein; and, subject to the provisions of Section 7.4, every power and remedy
given by this Article VII or by law to the Trustee or the Debentureholders may
be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Debentureholders.
SECTION 7.6 CONTROL BY DEBENTUREHOLDERS.
The holders of a majority in aggregate principal amount of the Debentures
at the time Outstanding, determined in accordance with Section 10.4, shall have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
on the Trustee; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture. Subject to the provisions of
Section 9.1, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would involve
the Trustee in personal liability. The holders of a majority in aggregate
principal amount of the Debentures at the time Outstanding affected thereby,
determined in accordance with Section 10.4, may on behalf of the holders of all
of the Debentures waive any past default in the
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performance of any of the covenants contained herein and its consequences,
except (i) a default in the payment of the principal of or interest on, any of
the Debentures as and when the same shall become due by the terms of such
Debentures otherwise than by acceleration (unless such default has been cured
and a sum sufficient to pay all matured installments of interest and principal,
other than principal maturing because of the acceleration, has been deposited
with the Trustee (in accordance with Section 7.1(c)); (ii) a default in the
covenants contained in Section 4.3; or (iii) in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
holder of each Outstanding Debenture affected; provided, however, that if the
Debentures are held by the Trust or a trustee of the Trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Preferred Securities of the Trust shall
have consented to such waiver or modification to such waiver; provided further,
that if the consent of the holder of each Outstanding Debenture is required,
such waiver shall not be effective until each holder of the Preferred Securities
of the Trust shall have consented to such waiver. Upon any such waiver, the
default covered thereby shall be deemed to be cured for all purposes of this
Indenture and the Corporation, the Trustee and the holders of the Debentures
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 7.7 UNDERTAKING TO PAY COSTS.
All parties to this Indenture agree, and each holder of any Debentures by
such holder's acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the Trustee for any action
taken or omitted by it as Trustee, the filing by any party litigant in such suit
of an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 7.7 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Debentureholder, or group of
Debentureholders, holding more than 10% in aggregate principal amount of the
Outstanding Debentures, or to any suit instituted by any Debentureholder for the
enforcement of the payment of the principal of or interest on the Debentures, on
or after the respective due dates expressed in such Debenture or established
pursuant to this Indenture.
SECTION 7.8 DIRECT ACTION BY HOLDERS OF PREFERRED SECURITIES.
Any registered holder of the Preferred Securities issued by the Trust shall
have the right, upon the occurrence of an Event of Default described in Section
7.1(a)(i) or 7.1(a)(ii), to institute a suit directly against the Corporation
for enforcement of payment to such holder of principal of and (subject to
Sections 2.4 and 4.1) interest (including any Additional Interest) on the
Debentures having a principal amount equal to the aggregate Liquidation Amount
(as defined in the Trust Agreement) of such Preferred Securities held by such
holder. The Corporation may not amend this
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Indenture to remove this right to institute a suit directly against the
Corporation without the prior consent of the holders of all the Preferred
Securities.
ARTICLE VIII
FORM OF DEBENTURE AND ORIGINAL ISSUE
SECTION 8.1 FORM OF DEBENTURE.
The Debenture and the Trustee's Certificate of Authentication to be
endorsed thereon are to be substantially in the forms contained as Exhibit A
attached hereto and incorporated herein by reference.
SECTION 8.2 ORIGINAL ISSUE OF DEBENTURES.
Debentures in the aggregate principal amount of up to $_________ may, upon
execution of this Indenture, be executed by the Corporation and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
make available for delivery said Debentures to or upon the written order of the
Corporation, signed by its Chairman, its President, or any Vice President and
its Treasurer or an Assistant Treasurer, without any further action by the
Corporation.
ARTICLE IX
CONCERNING THE TRUSTEE
SECTION 9.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default that may have occurred, shall undertake to
perform with respect to the Debentures such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants shall be read
into this Indenture against the Trustee. In case an Event of Default has
occurred that has not been cured or waived, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred:
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(i) the duties and obligations of the Trustee shall, with respect
to the Debentures, be determined solely by the express provisions of
this Indenture, and the Trustee shall not be liable with respect to
the Debentures except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to the Indenture conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee
and conforming to the requirements of this Indenture; but in the case
of any such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining
the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the holders of not less than a majority in principal amount of the
Debentures at the time outstanding (within the meaning of Section 316(a) of
the Trust Indenture Act) relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under this
Indenture with respect to the Debentures; and
(4) none of the provisions contained in this Indenture shall require
the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is not reasonably
assured to it under the terms of this Indenture or adequate indemnity
against such risk is not reasonably assured to it.
SECTION 9.2 NOTICE OF DEFAULTS.
The Trustee shall transmit by mail to all holders of the Debentures, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of any default hereunder, within 90 days after the occurrence thereof;
provided, however, that, except in the case of any default in the payment of the
principal or interest (including Additional Interest and Compounded Interest, if
any) on any Debenture, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive committee or a trust
committee of the directors and/or Responsible
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Officers of the Trustee determines in good faith that the withholding of such
notice is in the interests of the holders of such Debentures. For the purposes
of this Section 9.2, the term "default" means any event which is, or after
notice or lapse of time or both, would become, an Event of Default with respect
to the Debentures.
SECTION 9.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 9.1 or elsewhere in this Indenture:
(a) The Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Corporation mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Corporation by the Chairman, President or any Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer thereof (unless other evidence in respect thereof is
specifically prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a default or an
Event of Default, other than an Event of Default specified in Section 7.1(a)(i)
or (ii), unless and until it receives notification of such Event of Default from
the Corporation or by holders of at least 25% of the aggregate principal amount
of the Debentures at the time Outstanding;
(d) The Trustee may consult with counsel of its selection and the advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted hereunder
in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request, order or direction of
any of the Debentureholders, pursuant to the provisions of this Indenture,
unless such Debentureholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities that may be
incurred therein or thereby; nothing contained herein shall, however, relieve
the Trustee of the obligation, upon the occurrence of an Event of Default (that
has not been cured or waived) to exercise with respect to the Debentures such of
the rights and powers vested in it by this Indenture, and to use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(f) The Trustee shall not be liable for any action taken or omitted to be
taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
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(g) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents, but the Trustee in its discretion may make such
inquiry or investigation into such facts or matters as it may see fit, and, if
the Trustee shall determine to make such inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Corporation,
personally or by agent or attorney; and
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 9.4 TRUSTEE NOT RESPONSIBLE FOR RECITALS, ETC.
(a) The Recitals contained herein and in the Debentures, except the
certificates of authentication, shall be taken as the statements of the
Corporation, and the Trustee assumes no responsibility for the correctness of
the same.
(b) The Trustee makes no representations as to the validity or sufficiency
of this Indenture or of the Debentures.
(c) The Trustee shall not be accountable for the use or application by the
Corporation of any of the Debentures or of the proceeds of such Debentures, or
for the use or application of any monies paid over by the Trustee in accordance
with any provision of this Indenture, or for the use or application of any
monies received by any paying agent other than the Trustee.
SECTION 9.5 MAY HOLD DEBENTURES.
The Trustee or any paying agent or registrar for the Debentures, in its
individual or any other capacity, may become the owner or pledgee of Debentures
and, subject to Sections 9.9 and 9.14, may otherwise deal with the Corporation
with the same rights it would have if it were not Trustee, paying agent or
Debenture Registrar.
SECTION 9.6 MONIES HELD IN TRUST.
Subject to the provisions of Section 13.5, all monies received by the
Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other
funds except to the extent required by law. The Trustee shall be under no
liability for interest on any monies received by it hereunder except such as it
may agree in writing with the Corporation to pay thereon.
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SECTION 9.7 COMPENSATION AND REIMBURSEMENT.
The Corporation agrees:
(1) to pay to the Trustee from time to time such compensation as the
Corporation and the Trustee shall from time to time agree in writing for
all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to the fullest extent permitted by law, to indemnify each of the
Trustee or any predecessor Trustee and their agents for, and to hold them
harmless against, any and all loss, damage, claims, liability or expense,
including taxes (other than taxes based upon, measured by or determined by
the income of the Trustee), arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including
the costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder, except to the extent that such loss, damage, claim,
liability or expense is due to its own negligence or bad faith.
The Trustee shall have a lien prior to the Debentures as to all property
and funds held by it hereunder for any amount owing it or any predecessor
Trustee pursuant to this Section 9.7, except with respect to funds held in trust
for the benefit of the holders of particular Debentures. When the Trustee incurs
expenses or renders services in connection with an Event of Default specified in
Section 7.1(a)(iv), Section 7.1(a)(v) or 7.1(a)(vi), the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Bankruptcy Law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 9.8 RELIANCE ON OFFICERS' CERTIFICATE.
Except as otherwise provided in Section 9.1, whenever in the administration
of the provisions of this Indenture the Trustee shall deem it necessary or
desirable that a matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other evidence in
respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officers' Certificate delivered to the Trustee and
such certificate, in the absence of negligence or bad
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faith on the part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted to be taken by it under the provisions of this
Indenture upon the faith thereof.
SECTION 9.9 DISQUALIFICATION: CONFLICTING INTERESTS.
If the Trustee has or shall acquire any "conflicting interest" within the
meaning of Section 310(b) of the Trust Indenture Act, the Trustee and the
Corporation shall in all respects comply with the provisions of Section 310(b)
of the Trust Indenture Act; provided, however, that for purposes of the first
proviso contained in Section 310 (b) of the Trust Indenture Act, the Trust
Agreement and Preferred Securities Guarantee shall be deemed to be specifically
described in this Indenture.
SECTION 9.10 CORPORATE TRUSTEE REQUIRED ELIGIBILITY.
There shall at all times be a Trustee with respect to the Debentures issued
hereunder which shall at all times be a corporation organized and doing business
under the laws of the United States of America or any State or Territory thereof
or of the District of Columbia or a corporation or other Person permitted to act
as trustee by the Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000, and
subject to supervision or examination by federal, state, territorial, or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section 9.10, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The Corporation may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Corporation, serve as Trustee. In case at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section 9.10, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.11.
SECTION 9.11 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee or any successor hereafter appointed, may at any time
resign by giving written notice thereof to the Corporation and by transmitting
notice of resignation by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. Upon receiving such notice of resignation, the Corporation shall
promptly appoint a successor trustee with respect to Debentures by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition at the expense of the
Corporation any court of competent jurisdiction for the appointment of a
successor trustee with respect to Debentures, or any Debentureholder who has
been a bona fide holder of a Debenture or Debentures for at least six months
may, subject to the provisions of Section 9.9, on behalf of himself and all
others similarly situated, petition any such
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court for the appointment of a successor trustee. Such court may thereupon after
such notice, if any, as it may deem proper, appoint a successor trustee.
(b) In case at any time any one of the following shall occur,
(i) the Trustee shall fail to comply with the provisions of Section
9.9 after written request therefor by the Corporation or by any
Debentureholder who has been a bona fide holder of a Debenture or
Debentures for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.10 and shall fail to resign after written request
therefor by the Corporation or by any such Debentureholder; or
(iii) the Trustee shall become incapable of acting, or shall be
adjudged bankrupt or insolvent, or commence a voluntary bankruptcy
proceeding, or a receiver of the Trustee or of its property shall be
appointed or consented to, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Corporation may remove the Trustee with respect to
all Debentures and appoint a successor trustee by written instrument, in
duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 9.9, unless the
Trustee's duty to resign is stayed as provided herein, any Debentureholder who
has been a bona fide holder of a Debenture or Debentures for at least six months
may, on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Corporation and may appoint a successor Trustee
with the consent of the Corporation. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after such notification,
the Trustee may petition at the expense of the Corporation any court of
competent jurisdiction for the appointment of a successor trustee with respect
to Debentures, or any Debentureholder who has been a bona fide holder of a
Debenture or Debentures for at least six months may, subject to the provisions
of Section 9.9, on behalf of himself and all others similarly situated, petition
any such court for the appointment of a successor trustee. Such court may
appoint a successor trustee.
(d) No resignation or removal of the Trustee and no appointment of a
successor trustee with respect to the Debentures pursuant to any of the
provisions of this Section 9.11 shall become effective until acceptance of
appointment by the successor trustee as provided in Section 9.12.
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SECTION 9.12 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor trustee with
respect to the Debentures, every successor trustee so appointed shall execute,
acknowledge and deliver to the Corporation and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Corporation or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) Upon request of any successor trustee, the Corporation shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor trustee all such rights, powers and trusts referred to in
paragraph (a) of this Section 9.12.
(c) No successor trustee shall accept its appointment unless at the time of
such acceptance such successor trustee shall be qualified and eligible under
this Article IX.
(d) Upon acceptance of appointment by a successor trustee as provided in
this Section 9.12, the Corporation shall transmit notice of the succession of
such trustee hereunder by mail, first class postage prepaid, to the
Debentureholders, as their names and addresses appear upon the Debenture
Register. If the Corporation fails to transmit such notice within ten days after
acceptance of appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the Corporation.
SECTION 9.13 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided that
such corporation shall be qualified under the provisions of Section 9.9 and
eligible under the provisions of Section 9.10, without the execution or filing
of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding. In case any Debentures shall
have been authenticated, but not delivered, by the Trustee then in office, any
successor by merger, conversion or consolidation to such authenticating Trustee
may adopt such authentication and deliver the Debentures so authenticated with
the same effect as if such successor Trustee had itself authenticated such
Debentures.
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SECTION 9.14 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE CORPORATION.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein.
ARTICLE X
CONCERNING THE DEBENTUREHOLDERS
SECTION 10.1 EVIDENCE OF ACTION BY HOLDERS.
(a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Debentures
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the holders of such majority or
specified percentage have joined therein may be evidenced by any instrument or
any number of instruments of similar tenor executed by such holders of
Debentures in Person or by agent or proxy appointed in writing.
(b) If the Corporation shall solicit from the Debentureholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Corporation may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Debentureholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action, but the Corporation shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Debentureholders of record at the close of business on the record date shall
be computed to be Debentureholders for the purposes of determining whether
Debentureholders of the requisite proportion of Outstanding Debentures have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Debentures shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Debentureholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 10.2 PROOF OF EXECUTION BY DEBENTUREHOLDERS.
Subject to the provisions of Section 9.1, proof of the execution of any
instrument by a Debentureholder (such proof shall not require notarization) or
his agent or proxy and proof of the holding by any Person of any of the
Debentures shall be sufficient if made in the following manner:
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(a) The fact and date of the execution by any such Person of any instrument
may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Debentures shall be proved by the Debenture Register
of such Debentures or by a certificate of the Debenture Registrar thereof.
(c) The Trustee may require such additional proof of any matter referred to
in this Section 10.2 as it shall deem necessary.
SECTION 10.3 WHO MAY BE DEEMED OWNERS.
Prior to the due presentment for registration of transfer of any Debenture,
the Corporation, the Trustee, any paying agent, any Authenticating Agent and any
Debenture Registrar may deem and treat the Person in whose name such Debenture
shall be registered upon the books of the Corporation as the absolute owner of
such Debenture (whether or not such Debenture shall be overdue and
notwithstanding any notice of ownership or writing thereon made by anyone other
than the Debenture Registrar) for the purpose of receiving payment of or on
account of the principal of and interest on such Debenture (subject to Section
2.3) and for all other purposes; and neither the Corporation nor the Trustee nor
any paying agent nor any Authenticating Agent nor any Debenture Registrar shall
be affected by any notice to the contrary.
SECTION 10.4 CERTAIN DEBENTURES OWNED BY CORPORATION DISREGARDED.
In determining whether the holders of the requisite aggregate principal
amount of Debentures have concurred in any direction, consent or waiver under
this Indenture, the Debentures that are owned by the Corporation or any other
obligor on the Debentures or by any Person directly or indirectly controlling or
controlled by, or under common control with, the Corporation or any other
obligor on the Debentures shall be disregarded and deemed not to be Outstanding
for the purpose of any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on any such
direction, consent or waiver, only Debentures that a Responsible Officer of the
Trustee actually knows are so owned shall be so disregarded. The Debentures so
owned that have been pledged in good faith may be regarded as Outstanding for
the purposes of this Section 10.4, if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Debentures and that the pledgee is not a Person directly or indirectly,
controlling or controlled by, or under direct or indirect common control with,
the Corporation or any such other obligor. In case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee.
SECTION 10.5 ACTIONS BINDING ON FUTURE DEBENTUREHOLDERS.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 10.1, of the taking of any action by the holders of the
majority or percentage in aggregate principal amount of the Debentures specified
in this Indenture in connection with such action, any holder of a
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Debenture that is shown by the evidence to be included in the Debentures the
holders of which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in Section 10.2, revoke
such action so far as concerns such Debenture. Except as aforesaid any such
action taken by the holder of any Debenture shall be conclusive and binding upon
such holder and upon all future holders and owners of such Debenture, and of any
Debenture issued in exchange therefor, on registration of transfer thereof or in
place thereof, irrespective of whether or not any notation in regard thereto is
made upon such Debenture. Any action taken by the holders of the majority or
percentage in aggregate principal amount of the Debentures specified in this
Indenture in connection with such action shall be conclusively binding upon the
Corporation, the Trustee and the holders of all the Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF DEBENTUREHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Corporation and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Debentureholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein or in the
Debentures;
(b) to comply with Article X;
(c) to provide for uncertificated Debentures in addition to or in place of
certificated Debentures;
(d) to add to the covenants of the Corporation for the benefit of the
holders of all or any of the Debentures or to surrender any right or power
herein conferred upon the Corporation;
(e) to evidence the succession of another corporation to the Corporation,
and the assumption by any such successor of the covenants of the Corporation
herein and in the Debentures contained;
(f) to convey, transfer, assign, mortgage or pledge to or with the Trustee
any property or assets which the Corporation may desire to convey, transfer,
assign, mortgage or pledge;
(g) to add to, delete from, or revise the conditions, limitations, and
restrictions on the authorized amount, terms, or purposes of issue,
authentication, and delivery of Debentures, as herein set forth;
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(h) to make any change that does not adversely affect the rights of any
Debentureholder in any material respect;
(i) to provide for the issuance of and establish the form and terms and
conditions of the Debentures, to establish the form of any certifications
required to be furnished pursuant to the terms of this Indenture or of the
Debentures, or to add to the rights of the holders of the Debentures; or
(j) to qualify or maintain the qualification of this Indenture under the
Trust Indenture Act.
The Trustee is hereby authorized to join with the Corporation in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise. Any supplemental indenture authorized by the provisions
of this Section 11.1 may be executed by the Corporation and the Trustee without
the consent of the holders of any of the Debentures at the time Outstanding,
notwithstanding any of the provisions of Section 11.2.
SECTION 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF DEBENTUREHOLDERS.
With the consent (evidenced as provided in Section 10.1) of the holders of
not less than a majority in aggregate principal amount of the Debentures at the
time Outstanding, the Corporation, when authorized by Board Resolutions, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 11.1 the rights of the holders of the Debentures under this
Indenture; provided, however, that no such supplemental indenture shall without
the consent of the holders of each Debenture then Outstanding and affected
thereby, (i) extend the fixed maturity of any Debentures, reduce the principal
amount thereof, or reduce the rate or extend the time of payment of interest
thereon (other than the Corporation's right to defer interest pursuant to this
Indenture), without the consent of the holder of each Debenture so affected; or
(ii) reduce the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture; provided further, that
if the Debentures are held by the Trust or a trustee of the Trust, such
supplemental indenture shall not be effective until the holders of a majority in
liquidation preference of Trust Securities of the Trust shall have consented to
such supplemental indenture; provided further, that if the consent of the holder
of each Outstanding Debenture is required, such supplemental indenture shall not
be effective until each holder of the Trust Securities of the Trust shall have
consented to such supplemental indenture. It shall not be necessary for the
consent of the Debentureholders affected thereby under this Section 11.2 to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such consent shall approve the substance thereof.
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SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture pursuant to the provisions
of this Article XI, this Indenture shall be and be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties and immunities under this Indenture of the Trustee,
the Corporation and the holders of Debentures shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes.
SECTION 11.4 DEBENTURES AFFECTED BY SUPPLEMENTAL INDENTURES.
Debentures affected by a supplemental indenture that are authenticated and
delivered after the execution of such supplemental indenture pursuant to the
provisions of this Article XI may bear a notation in form approved by the
Corporation, provided such form meets the requirements of any exchange upon
which the Debentures may be listed, as to any matter provided for in such
supplemental indenture. If the Corporation shall so determine, new Debentures so
modified as to conform, in the opinion of the Board of Directors of the
Corporation, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Corporation, authenticated by the
Trustee and delivered in exchange for the Debentures then Outstanding.
SECTION 11.5 EXECUTION OF SUPPLEMENTAL INDENTURES.
(a) Upon the request of the Corporation, accompanied by Board Resolutions
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders required
to consent thereto as aforesaid, the Trustee shall join with the Corporation in
the execution of such supplemental indenture unless such supplemental indenture
adversely affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion but
shall not be obligated to enter into such supplemental indenture. The Trustee,
subject to the provisions of Section 9.1, may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article XI is authorized or permitted by, and conforms to, the terms of this
Article XI and that it is proper for the Trustee under the provisions of this
Article XI to join in the execution thereof.
(b) Promptly after the execution by the Corporation and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 11.5, the
Trustee shall transmit by mail, first class postage prepaid, a notice, setting
forth in general terms the substance of such supplemental indenture, to the
Debentureholders as their names and addresses appear upon the Debenture
Register. Any failure of the Trustee to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
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ARTICLE XII
SUCCESSOR CORPORATION
SECTION 12.1 CORPORATION MAY CONSOLIDATE, ETC.
Nothing contained in this Indenture or in any of the Debentures shall
prevent any consolidation or merger of the Corporation with or into any other
corporation or corporations (whether or not affiliated with the Corporation, as
the case may be), or successive consolidations or mergers in which the
Corporation, as the case may be, or its successor or successors shall be a party
or parties, or shall prevent any sale, conveyance, transfer or other disposition
of the property of the Corporation, as the case may be, or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Corporation, as the case may be,
or its successor or successors) authorized to acquire and operate the same;
provided, however, the Corporation hereby covenants and agrees that, (i) upon
any such consolidation, merger, sale, conveyance, transfer or other disposition,
the due and punctual payment, in the case of the Corporation, of the principal
of and interest on all of the Debentures, according to their tenor and the due
and punctual performance and observance of all the covenants and conditions of
this Indenture to be kept or performed by the Corporation as the case may be,
shall be expressly assumed, by supplemental indenture (which shall conform to
the provisions of the Trust Indenture Act, as then in effect) satisfactory in
form to the Trustee executed and delivered to the Trustee by the entity formed
by such consolidation, or into which the Corporation, as the case may be, shall
have been merged, or by the entity which shall have acquired such property; (ii)
in case the Corporation consolidates with or merges into another Person or
conveys or transfers its properties and assets substantially then as an entirety
to any Person, the successor Person is organized under the laws of the United
States or any state or the District of Columbia; and (iii) immediately after
giving effect thereto, no Event of Default, and no event which, after notice or
lapse of time or both, would become an Event of Default, shall have occurred and
be continuing.
SECTION 12.2 SUCCESSOR CORPORATION SUBSTITUTED.
(a) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition and upon the assumption by the successor corporation, by
supplemental indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of, in the case of the Corporation, the due and punctual
payment of the principal of and interest on all of the Debentures Outstanding
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Corporation, as the case may be, such
successor corporation shall succeed to and be substituted for the Corporation,
with the same effect as if it had been named as the Corporation herein, and
thereupon the predecessor corporation shall be relieved of all obligations and
covenants under this Indenture and the Debentures.
(b) In case of any such consolidation, merger, sale, conveyance, transfer
or other disposition such changes in phraseology and form (but not in substance)
may be made in the Debentures thereafter to be issued as may be appropriate.
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(c) Nothing contained in this Indenture or in any of the Debentures shall
prevent the Corporation from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Corporation).
SECTION 12.3 EVIDENCE OF CONSOLIDATION, ETC. TO TRUSTEE.
The Trustee, subject to the provisions of Section 9.1, may receive an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance, transfer or other disposition, and any such assumption, comply
with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE
SECTION 13.1 SATISFACTION AND DISCHARGE OF INDENTURE.
If at any time: (a) the Corporation shall have delivered to the Trustee for
cancellation all Debentures theretofore authenticated (other than any Debentures
that shall have been destroyed, lost or stolen and that shall have been replaced
or paid as provided in Section 2.8 and Debentures for whose payment money or
Governmental Obligations have theretofore been deposited in trust or segregated
and held in trust by the Corporation (and thereupon repaid to the Corporation or
retained by Corporation and discharged from such trust, as provided in Section
13.5)); or (b) all such Debentures not theretofore delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Corporation shall deposit or cause to be deposited with the
Trustee as trust funds the entire amount in monies or Governmental Obligations
sufficient or a combination thereof, sufficient in the opinion of a nationally
recognized firm of independent public accountants expressed in written
certification thereof delivered to the Trustee, to pay at maturity or upon
redemption all Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if the
Corporation shall also pay or cause to be paid all other sums payable hereunder
by the Corporation; then this Indenture shall thereupon cease to be of further
effect except for the provisions of Sections 2.3, 2.6, 2.8, 5.1, 5.2, 5.3 and
9.10, that shall survive until the date of maturity or redemption date, as the
case may be, and Sections 9.7 and 13.5, that shall survive to such date and
thereafter, and the Trustee, on demand of the Corporation and at the cost and
expense of the Corporation, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
SECTION 13.2 DISCHARGE OF OBLIGATIONS.
If at any time all Debentures not heretofore delivered to the Trustee for
cancellation or that have not become due and payable as described in Section
13.1 shall have been paid by the
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Corporation by depositing irrevocably with the Trustee as trust funds monies or
an amount of Governmental Obligations sufficient to pay at maturity or upon
redemption all Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if the
Corporation shall also pay or cause to be paid all other sums payable hereunder
by the Corporation, then after the date such monies or Governmental Obligations,
as the case may be, are deposited with the Trustee, the obligations of the
Corporation under this Indenture shall cease to be of further effect except for
the provisions of Sections 2.3, 2.6, 2.8, 5.1, 5.2, 5.3, 9.7, 9.10 and 13.5
hereof that shall survive until such Debentures shall mature and be paid.
Thereafter, Sections 9.7 and 13.5 shall survive.
SECTION 13.3 DEPOSITED MONIES TO BE HELD IN TRUST.
All monies or Governmental Obligations deposited with the Trustee pursuant
to Sections 13.1 or 13.2 shall be held in trust and shall be available for
payment as due, either directly or through any paying agent (including the
Corporation acting as its own paying agent), to the holders of the Debentures
for the payment or redemption of which such Monies or Governmental Obligations
have been deposited with the Trustee.
The Corporation shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the Government Obligations deposited
pursuant to Section 13.1 or the principal and interest received in respect
thereof, other than any such tax, fee or other charge which by law is for the
account of the holders of Outstanding Debentures.
SECTION 13.4 PAYMENT OF MONIES HELD BY PAYING AGENTS.
In connection with the satisfaction and discharge of this Indenture, all
monies or Governmental Obligations then held by any paying agent under the
provisions of this Indenture shall, upon demand of the Corporation, be paid to
the Trustee and thereupon such paying agent shall be released from all further
liability with respect to such monies or Governmental Obligations.
SECTION 13.5 REPAYMENT TO CORPORATION.
Any monies or Governmental Obligations deposited with any paying agent or
the Trustee, or then held by the Corporation in trust, for payment of principal
of or interest on the Debentures that are not applied but remain unclaimed by
the holders of such Debentures for at least two years after the date upon which
the principal of or interest on such Debentures shall have respectively become
due and payable, shall be repaid to the Corporation or retained by Corporation,
as the case may be, on May 31 of each year and shall be discharged from such
trust; and thereupon the paying agent and the Trustee shall be released from all
further liability with respect to such monies or Governmental Obligations and
the holder of any of the Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Corporation for
the payment thereof.
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ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 14.1 NO RECOURSE.
(a) No recourse under or upon any obligation, covenant or agreement of
this Indenture, or of the Debentures, or for any claim based thereon or
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Corporation or of any predecessor or successor corporation, either directly or
through the Corporation or any such predecessor or successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Corporation or of any predecessor or successor
corporation, or any of them, because of the creation of the indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Debentures or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Debentures or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Debentures.
(b) No recourse under or upon any obligation, covenant or agreement of this
Indenture, or of the Debentures, or for any claim based thereon or otherwise in
respect thereof, shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Trustee or of any predecessor
or successor corporation, either directly or through the Trustee or any such
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise; it being expressly understood that the Indenture obligations of the
Trustee are solely corporate obligations of the Trustee, and that no such
personal liability whatever shall attach to, or is or shall be incurred by, the
incorporators, stockholders, officers or directors as such, of the Trustee or of
any predecessor or successor corporation, or any of them, because of the
creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom; and that any and all such personal
liability of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and claims against,
every such incorporator, stockholder, officer or director as such, because of
the creation of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Debentures or implied therefrom, are hereby expressly waived and released as
a condition of, and as a consideration for, the execution of this Indenture by
the Trustee.
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ARTICLE XV
MISCELLANEOUS PROVISIONS
SECTION 15.1 EFFECT ON SUCCESSORS AND ASSIGNS.
All the covenants, stipulations, promises and agreements in this Indenture
contained by or on behalf of the Corporation shall bind its respective
successors and assigns, whether so expressed or not.
SECTION 15.2 ACTIONS BY SUCCESSOR.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Corporation shall and may be done and performed with like force and effect by
the corresponding board, committee or officer of any corporation that shall at
the time be the lawful sole successor of the Corporation.
SECTION 15.3 SURRENDER OF CORPORATION POWERS.
The Corporation by instrument in writing executed by appropriate authority
of its Board of Directors and delivered to the Trustee may surrender any of the
powers reserved to the Corporation, and thereupon such power so surrendered
shall terminate both as to the Corporation, as the case may be, and as to any
successor corporation.
SECTION 15.4 NOTICES.
Except as otherwise expressly provided herein any notice or demand that by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Debentures to or on the Corporation may be
given or served by being deposited first class postage prepaid in a post-office
letter box addressed (until another address is filed in writing by the
Corporation with the Trustee), as follows: CB&T Holding Corporation,1100 Poydras
Street, Suite 100, New Orleans, Louisiana 70112, Attention: Chief Executive
Officer. Any notice, election, request or demand by the Corporation or any
Debentureholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if given or made in writing at the Corporate
Trust Office of the Trustee.
SECTION 15.5 GOVERNING LAW.
This Indenture and each Debenture shall be deemed to be a contract made
under the internal laws of the State of Delaware and for all purposes shall be
construed in accordance with the laws of said State without regard to conflicts
of law principles.
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SECTION 15.6 TREATMENT OF DEBENTURES AS DEBT.
It is intended that the Debentures shall be treated as indebtedness and not
as equity for federal income tax purposes. The provisions of this Indenture
shall be interpreted to further this intention.
SECTION 15.7 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application, request or demand by the Corporation to the
Trustee to take any action under any of the provisions of this Indenture,
including but not limited to actions which relate to the authentication and
delivery of the Debentures and to the satisfaction and discharge of the
Indenture, the Corporation shall furnish to the Trustee an Officers' Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action (including any covenants compliance with which constitutes a
condition precedent) have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with.
(b) Each certificate or opinion of the Corporation provided for in this
Indenture with respect to compliance with a condition or covenant in this
Indenture (other than the certificates provided for in Section 6.3(d)) shall
include (1) a statement that the Person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he has made such examination or investigation as, in the
opinion of such Person, is necessary to enable him to express an informed
opinion as to whether or not such covenant or condition has been complied with;
and (4) a statement as to whether or not, in the opinion of such Person, such
condition or covenant has been complied with.
SECTION 15.8 PAYMENTS ON BUSINESS DAYS.
In any case where the date of maturity of interest or principal of any
Debenture or the date of redemption of any Debenture shall not be a Business
Day, then payment of interest or principal may (subject to Section 2.4) be made
on the next succeeding Business Day with the same force and effect as if made on
the nominal date of maturity or redemption, and no interest shall accrue for the
period after such nominal date.
SECTION 15.9 CONFLICT WITH TRUST INDENTURE ACT.
If and to the extent that any provision of this Indenture limits, qualifies
or conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
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SECTION 15.10 COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
SECTION 15.11 SEPARABILITY.
In case any one or more of the provisions contained in this Indenture or in
the Debentures shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Debentures,
but this Indenture and the Debentures shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
SECTION 15.12 ASSIGNMENT.
The Corporation shall have the right at all times to assign any of its
respective rights or obligations under this Indenture to a direct or indirect
wholly owned Subsidiary of the Corporation, provided that, in the event of any
such assignment, the Corporation shall remain liable for all such obligations.
Subject to the foregoing, this Indenture is binding upon and inures to the
benefit of the parties hereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties hereto.
SECTION 15.13 ACKNOWLEDGMENT OF RIGHTS.
The Corporation acknowledges that, with respect to any Debentures held by
the Trust or a trustee of the Trust, if the Property Trustee fails to enforce
its rights under this Indenture as the holder of the Debentures held as the
assets of the Trust, any holder of Preferred Securities may institute legal
proceedings directly against the Corporation to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Corporation to pay interest or principal
on the Debentures on the date such interest or principal is otherwise payable
(or in the case of redemption, on the redemption date), the Corporation
acknowledges that a holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such holder on or after the
respective due date specified in the Debentures.
SECTION 15.14 ADDITIONAL PROVISIONS FOR THE PAYMENT OF EXPENSES.
In connection with the offering, sale and issuance of the Debentures to the
Trust and in connection with the sale of the Trust Securities by the Trust, the
Corporation, in its capacity as borrower with respect to the Debentures, and not
in limitation of the provisions contained in the
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"Expense Agreement" (as such term is defined in the Trust Agreement) or the
other provisions contained herein, agrees to pay the following:
(a) All debts and other obligations (other than with respect to the
Preferred Securities) of the Trust and all costs and expenses of the Trust
(including costs and expenses relating to the organization of the Trust,
the fees and expenses of the Property Trustee and the other costs and
expenses relating to the operation of the Trust); and
(b) Any and all taxes and all costs and expenses with respect thereto
(other than United States withholding taxes) to which the Trust might
become subject.
The foregoing obligations of the Corporation are for the benefit of, and shall
be enforceable by, any person to whom such debts, obligations, costs, expenses
and liabilities are owed (a "Creditor") whether or not such Creditor has
received notice thereof. Not in limitation of the provisions of the Expense
Agreement, any such Creditor may enforce such obligations of the Corporation
directly against the Corporation, and the Corporation irrevocably waives any
right or remedy to require that any such Creditor take any action against the
Trust or any other person before proceeding against the Corporation. The
Corporation also agrees to execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
ARTICLE XVI
SUBORDINATION OF DEBENTURES
SECTION 16.1 AGREEMENT TO SUBORDINATE.
The Corporation covenants and agrees, and each holder of Debentures issued
hereunder by such holder's acceptance thereof likewise covenants and agrees,
that all Debentures shall be issued subject to the provisions of this Article
XVI; and each holder of a Debenture, whether upon original issue or upon
transfer or assignment thereof, accepts and agrees to be bound by such
provisions. The payment by the Corporation of the principal of and interest on
all Debentures issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and junior in right of payment to the
prior payment in full of all Senior Debt and Subordinated Debt (collectively,
"Senior Indebtedness") to the extent provided herein, whether outstanding at the
date of this Indenture or thereafter incurred. No provision of this Article XVI
shall prevent the occurrence of any default or Event of Default hereunder.
SECTION 16.2 DEFAULT ON SENIOR DEBT OR SUBORDINATED DEBT.
In the event and during the continuation of any default by the Corporation
in the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness of the
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Corporation, or in the event that the maturity of any Senior Indebtedness of the
Corporation has been accelerated because of a default, then, in either case, no
payment shall be made by the Corporation with respect to the principal
(including redemption payments) of or interest on the Debentures. In the event
that, notwithstanding the foregoing, any payment shall be received by the
Trustee when such payment is prohibited by the preceding sentence of this
Section 16.2, such payment shall be held in trust for the benefit of, and shall
be paid over or delivered to, the holders of Senior Indebtedness or their
respective representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, but only to the extent that the holders of the
Senior Indebtedness (or their representative or representatives or a trustee)
notify the Corporation or the Trustee in writing within 90 days of such payment
of the amounts then due and owing on the Senior Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
Senior Indebtedness.
SECTION 16.3 LIQUIDATION; DISSOLUTION; BANKRUPTCY.
(a) Upon any payment by the Corporation or distribution of assets of the
Corporation of any kind or character, whether in cash, property or securities,
to creditors upon any liquidation, dissolution or winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any bankruptcy,
insolvency, debt restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Corporation, all amounts due upon all
Senior Indebtedness of the Corporation shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Corporation on account of the principal or interest on the
Debentures; and upon any such liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors, marshaling of assets,
any payment by the Corporation, or distribution of assets of the Corporation of
any kind or character, whether in cash, property or securities, to which the
holders of the Debentures or the Trustee would be entitled to receive from the
Corporation, except for the provisions of this Article XVI, shall be paid by the
Corporation or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the holders of
the Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Corporation (pro rata to
such holders on the basis of the respective amounts of Senior Indebtedness held
by such holders, as calculated by the Corporation) or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, to the extent necessary to pay such
Senior Indebtedness in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the holders of
Debentures or to the Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Corporation of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Corporation is paid in full,
or provision is made for such payment in money in accordance with its terms,
such payment or distribution shall be held in trust for the benefit of and shall
be paid over or delivered to the
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holders of such Senior Indebtedness or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing such Senior Indebtedness may have been issued, as their
respective interests may appear, as calculated by the Corporation, for
application to the payment of all Senior Indebtedness of the Corporation, as the
case may be, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness.
(c) For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Corporation as
reorganized or readjusted, or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this Article
XVI with respect to the Debentures to the payment of all Senior Indebtedness of
the Corporation, as the case may be, that may at the time be outstanding,
provided that (i) such Senior Indebtedness is assumed by the new corporation, if
any, resulting from any such reorganization or readjustment; and (ii) the rights
of the holders of such Senior Indebtedness are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Corporation with, or the merger of the Corporation into, another corporation
or the liquidation or dissolution of the Corporation following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article XII
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 16.3 if such other corporation shall, as a part of
such consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article XII. Nothing in Section 16.2 or in this Section 16.3 shall
apply to claims of, or payments to, the Trustee under or pursuant to Section
9.7.
SECTION 16.4 SUBROGATION.
(a) Subject to the payment in full of all Senior Indebtedness of the
Corporation, the rights of the holders of the Debentures shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Corporation, as the case
may be, applicable to such Senior Indebtedness until the principal of and
interest on the Debentures shall be paid in full; and for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the holders of the
Debentures or the Trustee would be entitled except for the provisions of this
Article XVI, and no payment over pursuant to the provisions of this Article XVI
to or for the benefit of the holders of such Senior Indebtedness by holders of
the Debentures or the Trustee, shall, as between the Corporation, its creditors
other than holders of Senior Indebtedness of the Corporation, and the holders of
the Debentures, be deemed to be a payment by the Corporation to or on account of
such Senior Indebtedness. It is understood that the provisions of this Article
XVI are and are intended solely for the purposes of defining the relative rights
of the holders of the Debentures, on the one hand, and the holders of such
Senior Indebtedness on the other hand.
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(b) Nothing contained in this Article XVI or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Corporation,
its creditors (other than the holders of Senior Indebtedness of the
Corporation), and the holders of the Debentures, the obligation of the
Corporation, which is absolute and unconditional, to pay to the holders of the
Debentures the principal of and interest on the Debentures as and when the same
shall become due and payable in accordance with their terms, or is intended to
or shall affect the relative rights of the holders of the Debentures and
creditors of the Corporation, as the case may be, other than the holders of
Senior Indebtedness of the Corporation, nor shall anything herein or therein
prevent the Trustee or the holder of any Debenture from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article XVI of the holders of such Senior
Indebtedness in respect of cash, property or securities of the Corporation, as
the case may be, received upon the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Corporation referred
to in this Article XVI, the Trustee, subject to the provisions of Article IX,
and the holders of the Debentures shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the holders of the Debentures, for the purposes of ascertaining
the Persons entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Corporation, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article XVI.
SECTION 16.5 TRUSTEE TO EFFECTUATE SUBORDINATION.
Each holder of Debentures by such holder's acceptance thereof authorizes
and directs the Trustee on such holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XVI and appoints the Trustee such holder's attorney-in-fact for any and
all such purposes.
SECTION 16.6 NOTICE BY THE CORPORATION.
(a) The Corporation shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Corporation that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article XVI. Notwithstanding the
provisions of this Article XVI or any other provisions of this Indenture, the
Trustee shall not be charged with knowledge of the existence of any facts that
would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Article XVI, unless
and until a Responsible Officer of the Trustee shall have received written
notice thereof from the Corporation or a holder or holders of Senior
Indebtedness or from any trustee therefor, and before the receipt of any such
written notice, the Trustee, subject to the provisions of Section 9.1, shall be
entitled in all respects to assume that no such facts exist;
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provided, however, that if the Trustee shall not have received the notice
provided for in this Section 16.6 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of or interest on
any Debenture), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness of the
Corporation (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of such Senior Indebtedness or a trustee on
behalf of any such holder or holders. In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of such Senior Indebtedness to participate in any payment or
distribution pursuant to this Article XVI, the Trustee may request such Person
to furnish evidence to the reasonable satisfaction of the Trustee as to the
amount of such Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article XVI, and, if
such evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
SECTION 16.7 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR INDEBTEDNESS.
(a) The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article XVI in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and reimbursement
of expenses as set forth in Section 9.7 shall not be subject to the
subordination provisions of this Article XVI.
(b) With respect to the holders of Senior Indebtedness of the Corporation,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XVI, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to have any fiduciary duty to the holders of such Senior Indebtedness
and, subject to the provisions of Section 9.1, the Trustee shall not be liable
to any holder of such Senior Indebtedness if it shall in good faith mistakenly
pay over or deliver to holders of Debentures, the Corporation or any other
Person money or assets to which any holder of such Senior Indebtedness shall be
entitled by virtue of this Article XVI or otherwise.
SECTION 16.8 SUBORDINATION MAY NOT BE IMPAIRED.
(a) No right of any present or future holder of any Senior Indebtedness of
the Corporation to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired
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by any act or failure to act on the part of the Corporation or by any act or
failure to act, in good faith, by any such holder, or by any noncompliance by
the Corporation with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
(b) Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness of the Corporation may, at any time and from
time to time, without the consent of or notice to the Trustee or the holders of
the Debentures, without incurring responsibility to the holders of the
Debentures and without impairing or releasing the subordination provided in this
Article XVI or the obligations hereunder of the holders of the Debentures to the
holders of such Senior Indebtedness, do any one or more of the following: (i)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior Indebtedness, or otherwise amend or supplement in
any manner such Senior Indebtedness or any instrument evidencing the same or any
agreement under which such Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing such Senior Indebtedness; (iii) release any Person liable in
any manner for the collection of such Senior Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Corporation and any other Person.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed all as of the day and year first above written.
CB&T HOLDING CORPORATION
By:
------------------------------------
Name: Gary N. Solomon
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY, AS TRUSTEE
By:
------------------------------------
Name:
----------------------------------
Title:
----------------------------------
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EXHIBIT A
FACE OF DEBENTURE
NO. 1 $__________
CUSIP NO.
CB&T HOLDING CORPORATION
___% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE ________ __, 2029
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY
OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
CB&T Holding Corporation, a Louisiana corporation (the "Corporation," which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to Wilmington Trust Company, as
Property Trustee for Crescent Capital Trust I, or registered assigns, the
principal sum of _____________________ dollars ($_________) on _________ __,
2029 (the "Stated Maturity"), and to pay interest on said principal sum from
_________ __, 1999, or from the most recent interest payment date (each such
date, an "Interest Payment Date") to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 31, June 30, September 30 and December 31 of each year commencing ______
__, ____, at the rate of ____% per annum until the principal hereof shall have
become due and payable, and on any overdue principal and (without duplication)
on any overdue installment of interest at the rate of ___% per annum compounded
quarterly. The amount of interest payable on any Interest Payment Date shall be
computed on the basis of a 360-day year of twelve 30-day months and for any
period of less than a full month, the actual number of days lapsed in such
period, based on a thirty day month. In the event that any date on which
interest is payable on this Debenture is not a business day, then payment of
interest payable on such date shall be made on the next succeeding day that is a
business day (and without any interest or other payment in respect of any such
delay), except that, if such business day is in the next succeeding calendar
year, such payment shall be made on the preceding business day, in each case
with the same force and effect as if made on such date. The interest installment
so payable, and punctually, paid or duly provided for, on any Interest Payment
Date shall, as provided in the Indenture, be paid to the person in whose name
this Debenture (or one or more Predecessor Debentures, as defined in said
Indenture) is registered at the close of business on the regular record date for
such interest installment, which shall be the 15th day of the month preceding
the Interest Payment Date unless otherwise provided
<PAGE>
in the Indenture. Any such interest installment not punctually paid or duly
provided for shall forthwith cease to be payable to the registered holders on
such regular record date and may be paid to the Person in whose name this
Debenture (or one or more Predecessor Debentures) is registered at the close of
business on a special record date to be fixed by the Trustee for the payment of
such defaulted interest, notice whereof shall be given to the registered holders
of the Debentures not less than 10 days prior to such special record date, or
may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Debentures may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in the Indenture. The principal of and the interest on this Debenture
shall be payable at the office or agency of the Trustee maintained for that
purpose in any coin or currency of the United States of America that at the time
of payment is legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of the Corporation
by check mailed to the registered holder at such address as shall appear in the
Debenture Register. Notwithstanding the foregoing, so long as the holder of this
Debenture is the Property Trustee, the payment of the principal of and interest
on this Debenture shall be made at such place and to such account as may be
designated by the Trustee.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Debenture,
by accepting the same, (a) agrees to and shall be bound by such provisions; (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided; and (c) appoints the Trustee his or her attorney-in-fact for any
and all such purposes. Each holder hereof, by his or her acceptance hereof,
hereby waives all notice of the acceptance of the subordination provisions
contained herein and in the Indenture by each holder of Senior Indebtedness,
whether now outstanding or hereafter incurred, and waives reliance by each such
holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
This Debenture shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be construed in accordance with the
laws of Delaware without regard to conflicts of laws principles.
The provisions of this Debenture are continued on the reverse side hereof
and such continued provisions shall for all purposes have the same effect as
though fully set forth at this place.
2
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
executed.
CB&T HOLDING CORPORATION
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Attest:
------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned Indenture.
Dated:
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Trustee or Authentication Agent
By: By:
-------------------------------------------- -----------------------
Authorized Signatory
3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
certificate to:
_______________________________________________________________________________
_______________________________________________________________________________
(Insert assignees social security or tax identification number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
_______________________________________________________________________________
_______________________________________________________________________________
_____________________ agent to transfer this Security certificate on the books
of the Corporation. The agent may substitute another to act for him or her.
Date:___________________
Signature:______________________________________________(Sign exactly as your
name appears on the other side of this Security)
Signature Guarantee:____________________________________
_____________
Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities and Exchange Act of 1934, as amended.
4
<PAGE>
REVERSE OF DEBENTURE
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
(CONTINUED )
This Debenture is one of the subordinated debentures of the Corporation
(herein sometimes referred to as the "Debentures"), specified in the Indenture,
all issued or to be issued under and pursuant to an Indenture dated as of
________ __, 1999 (the "Indenture") duly executed and delivered between the
Corporation and Wilmington Trust Company, as Trustee (the "Trustee"), to which
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Corporation and the holders of the Debentures. The Debentures are limited in
aggregate principal amount as specified in the Indenture.
The Corporation has the right to redeem this Debenture at the option of the
Corporation, without premium or penalty (i) at any time on or after _______ __,
2004 in whole or in part, or (ii) at any time in certain circumstances in whole
(but not in part) upon the occurrence of a Special Event, in each case at a
Redemption Price equal to 100% of the principal amount plus any accrued but
unpaid interest, to the date of such redemption (the "Redemption Price"). The
Redemption Price shall be paid prior to 12:00 noon, Eastern Standard Time, on
the date of such redemption or at such earlier time as the Corporation
determines, provided that the Corporation shall deposit the Redemption Price
with the Trustee prior to 10:00 a.m. on the redemption date. Any redemption
pursuant to this paragraph shall be made upon not less than 30 days nor more
than 60 days notice, at the Redemption Price. If the Debentures are only
partially redeemed by the Corporation, the Debentures shall be redeemed pro rata
or by lot or by any other fair and appropriate method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof shall be issued in the name of
the holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Corporation and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding, as defined
in the Indenture, to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of the Debentures
except as provided in the Indenture, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon (except for
<PAGE>
deferrals of interest as described below), without the consent of the holder of
each Debenture so affected; or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of each Debenture
then outstanding and affected thereby. The Indenture also contains provisions
permitting the holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding, on behalf of all of the holders of the
Debentures, to waive any past default in the performance of any of the covenants
contained in the Indenture, or established pursuant to the Indenture, and its
consequences, except a default in the payment of the principal of or interest on
any of the Debentures. Any such consent or waiver by the registered holder of
this Debenture (unless revoked as provided in the Indenture) shall be conclusive
and binding upon such holder and upon all future holders and owners of this
Debenture and of any Debenture issued in exchange therefor or in place thereof
(whether by registration of transfer or otherwise or whether any notation of
such consent or waiver is made upon this Debenture).
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Corporation, which
is absolute and unconditional, to pay the principal and interest on this
Debenture at the time and place and at the rate and in the money herein
prescribed.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right at any time during the term of the Debentures
and from time to time to extend the interest payment period of such Debentures
for up to 20 consecutive quarters (each, an "Extended Interest Payment Period"),
at the end of which period the Corporation shall pay all interest then accrued
and unpaid (together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Corporation may further extend such Extended Interest Payment
Period, provided that such Extended Interest Payment Period together with all
such further extensions thereof shall not exceed 20 consecutive quarters and no
Extended Interest Payment Period shall extend beyond the Stated Maturity. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the
Corporation may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered holder hereof on the
Debenture Register of the Corporation, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Corporation or the Trustee duly executed by the registered holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Debentures of
authorized denominations and for the same aggregate principal amount shall be
issued to the designated transferee or transferees. No service charge shall be
made for any such transfer, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
2
<PAGE>
Prior to due presentment for registration of transfer of this Debenture,
the Corporation, the Trustee, any paying agent and the Debenture Registrar may
deem and treat the registered holder hereof as the absolute owner hereof
(whether or not this Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Debenture
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and neither
the Corporation nor the Trustee nor any paying agent nor any Debenture Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect of the Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Corporation or any
predecessor or successor corporation, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and released.
The Debentures are issuable only in registered form without coupons in
denominations of $10 and any integral multiple thereof.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Note is unsecured by any collateral, including the assets of the
Corporation or any of its subsidiaries or other affiliates.
3
<PAGE>
Exhibit 4.3
CERTIFICATE OF TRUST
OF
CRESCENT CAPITAL TRUST I
THIS Certificate of Trust of Crescent Capital Trust I (the "Trust"), dated
as of August 30, 1999, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. (S)3801, et seq.).
1. Name. The name of the business trust formed hereby is Crescent
Capital Trust I.
2. Delaware Trustee. The name and business address of the trustee of the
Trust with a principal place of business in the State of Delaware are Wilmington
Trust Company, Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust, have
executed this Certificate of Trust as of the date first-above written.
WILMINGTON TRUST COMPANY, not in its individual
capacity but solely as trustee of the Trust
By: /s/ Norma P. Closs
-------------------------------------------
Name: Norma P. Closs
Title: Vice President
GARY N. SOLOMON, not in his individual capacity
but solely as trustee of the Trust
/s/ Gary N. Solomon
--------------------------------------------------
PAUL R. TRAPANI, JR., not in his individual
capacity but solely as trustee of the Trust
/s/ Paul R. Trapani, Jr.
--------------------------------------------------
WILLIAM F. HAACKE, JR., not in his individual
capacity but solely as trustee of the Trust
/s/ William F. Haacke, Jr.
--------------------------------------------------
1
<PAGE>
Exhibit 4.4
AMENDED AND RESTATED TRUST AGREEMENT
AMONG
CB&T HOLDING CORPORATION,
AS DEPOSITOR
WILMINGTON TRUST COMPANY,
AS PROPERTY TRUSTEE
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF ________ __, 1999
_____________________________________
CRESCENT CAPITAL TRUST I
_____________________________________
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I DEFINED TERMS.............................................................. 1
Section 101. Definitions................................................................ 1
ARTICLE II ESTABLISHMENT OF THE TRUST................................................. 11
Section 201. Name....................................................................... 11
Section 202. Office of the Delaware Trustee; Principal Place of Business................ 11
Section 203. Initial Contribution of Trust Property; Organizational Expenses........... 11
Section 204. Issuance of the Preferred Securities....................................... 11
Section 205. Issuance of The Common Securities; Subscription and Purchase
of Debentures.......................................................... 12
Section 206. Declaration of Trust....................................................... 12
Section 207. Authorization to Enter Into Certain Transactions........................... 12
Section 208. Assets of Trust............................................................ 16
Section 209. Title to Trust Property.................................................... 16
ARTICLE III PAYMENT ACCOUNT............................................................ 16
Section 301. Payment Account............................................................ 16
ARTICLE IV DISTRIBUTIONS; REDEMPTION.................................................. 17
Section 401. Distributions.............................................................. 17
Section 402. Redemption................................................................. 18
Section 403. Subordination of Common Securities......................................... 20
Section 404. Payment Procedures......................................................... 21
Section 405. Tax Returns and Reports.................................................... 21
Section 406. Payment of Taxes, Duties, Etc. of The Trust................................ 21
Section 407. Payments Under Indenture................................................... 21
ARTICLE V TRUST SECURITIES CERTIFICATES.............................................. 22
Section 501. Initial Ownership.......................................................... 22
Section 502. The Trust Securities Certificates.......................................... 22
Section 503. Execution And Delivery of Trust Securities Certificates.................... 22
Section 503A. Global Preferred Securities................................................ 23
Section 504. Registration of Transfer and Exchange of Preferred Securities Certificates. 25
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 505. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates......... 26
Section 506. Persons Deemed Securityholders............................................. 27
Section 507. Access to List of Securityholders' Names And Addresses..................... 27
Section 508. Maintenance of Office or Agency............................................ 27
Section 509. Appointment of Paying Agent
Section 510. Ownership of Common Securities by Depositor................................ 28
Section 511A. Definitive Preferred Securities Certificate and Temporary Preferred
Securities............................................................... 29
Section 512. Rights of Securityholders.................................................. 30
Section 513. CUSIP Numbers.............................................................. 30
ARTICLE VI ACTS OF SECURITYHOLDERS; MEETINGS; VOTING.................................. 31
Section 601. Limitations on Voting Rights............................................... 31
Section 602. Notice of Meetings......................................................... 32
Section 603. Meetings of Preferred Securityholders...................................... 32
Section 604. Voting Rights.............................................................. 32
Section 605. Proxies, Etc............................................................... 32
Section 606. Securityholder Action by Written Consent................................... 33
Section 607. Record Date For Voting and Other Purposes.................................. 33
Section 608. Acts of Securityholders.................................................... 33
Section 609. Inspection of Records...................................................... 34
ARTICLE VII REPRESENTATIONS AND WARRANTIES............................................. 34
Section 701. Representations and Warranties of the Property Trustee..................... 34
Section 702. Representations and Warranties of Depositor................................ 36
ARTICLE VIII TRUSTEES................................................................... 36
Section 801. Certain Duties and Responsibilities........................................ 36
Section 802. Certain Notices............................................................ 38
Section 803. Certain Rights of Property Trustee......................................... 38
Section 804. Not Responsible for Recitals or Issuance of Securities..................... 40
Section 805. May Hold Securities........................................................ 40
Section 806. Compensation; Indemnity; Fees.............................................. 40
Section 807. Corporate Property Trustee Required; Eligibility of Trustees............... 41
Section 808. Conflicting Interests...................................................... 42
Section 809. Co-Trustees and Separate Trustee........................................... 42
Section 810. Resignation and Removal; Appointment of Successor.......................... 43
Section 811. Acceptance of Appointment by Successor..................................... 45
Section 812. Merger, Conversion, Consolidation or Succession to Business................ 46
Section 813. Preferential Collection of Claims Against Depositor or Trust............... 46
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Section 814. Reports by Property Trustee................................................ 46
Section 815. Reports to The Property Trustee............................................ 46
Section 816. Evidence of Compliance With Conditions Precedent........................... 47
Section 817. Number of Trustees......................................................... 47
Section 818. Delegation of Power........................................................ 47
Section 819. Voting..................................................................... 48
ARTICLE IX DISSOLUTION, LIQUIDATION AND MERGER........................................ 48
Section 901. Dissolution Upon Expiration Date........................................... 48
Section 902. Early Dissolution.......................................................... 48
Section 903. Termination................................................................ 49
Section 904. Liquidation................................................................ 49
Section 905. Mergers, Consolidations, Amalgamations or Replacements of the Trust........ 50
ARTICLE X MISCELLANEOUS PROVISIONS................................................... 51
Section 1001. Limitation of Rights of Securityholders.................................... 51
Section 1002. Amendment.................................................................. 52
Section 1003. Separability............................................................... 53
Section 1004. Governing Law.............................................................. 53
Section 1005. Payments Due on Non-Business Day........................................... 53
Section 1006. Successors................................................................. 53
Section 1007. Headings................................................................... 53
Section 1008. Reports, Notices And Demands............................................... 54
Section 1009. Agreement Not to Petition.................................................. 54
Section 1010. Trust Indenture Act; Conflict With Trust Indenture Act..................... 55
Section 1011. Acceptance of Terms of Trust Agreement, Guarantee and Indenture............ 55
Exhibit A Certificate of Trust
Exhibit B Form of Certificate Depository Agreement
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Preferred Securities Certificate
</TABLE>
iii
<PAGE>
CROSS-REFERENCE TABLE
Section of Trust Indenture Act Section of Amended and Restated
of 1939, as amended Trust Agreement
310(a)(1) 807
310(a)(2) 807
310(a)(3) 807
310(a)(4) 207(a)(ii)
310(a)(5) Not Applicable
310(b) 808
311(a) 813
311(b) 813
312(a) 507
312(b) 507
312(c) 507
313(a) 814(a)
313(b) 814(a)
313(c) 814(a)
313(d) 814(b)
314(a)(1) 815
314(a)(2) 815
314(a)(3) 815
314(a)(4) 816
314(b) Not Applicable
314(c)(1) 816
314(c)(2) 816
314(c)(3) Not Applicable
314(d) Not Applicable
314(e) 101,816
314(f) Not Applicable
315(a) 801, 803
315(b) 802
315(c) 801
315(d) 801, 803
315(e) Not Applicable
316(a)(1) Not Applicable
316(a)(2) Not Applicable
316(b) 1002(c)
316(c) 607
317(a)(1) Not Applicable
317(a)(2) Not Applicable
317(b) 509
318(a) 1010
Note: This Cross-Reference Table does not constitute part of this Agreement
and shall not affect any interpretation of any of its terms or
provisions.
iv
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
AMENDED AND RESTATED TRUST AGREEMENT, dated as of _______ __, 1999, among
(i) CB&T Holding Corporation, a Louisiana corporation (including any successors
or assigns, the "Depositor"), (ii) Wilmington Trust Company, a Delaware banking
corporation, as property trustee (in such capacity, the "Property Trustee" and,
in its separate corporate capacity and not in its capacity as Property Trustee,
the "Bank"), (iii) Gary N. Solomon, an individual, Paul R. Trapani, Jr., an
individual, and William F. Haacke, Jr., an individual, each of whose address is
c/o CB&T Holding Corporation, 1100 Poydras Street, Suite 100, New Orleans,
Louisiana 70112 (each an "Administrative Trustee" and collectively the
"Administrative Trustees") (the Property Trustee and the Administrative Trustees
referred to collectively as the "Trustees"), and (iv) the several Holders (as
hereinafter defined).
RECITALS
WHEREAS, the Depositor and the Property Trustee have heretofore duly
declared and established a business trust, Crescent Capital Trust I, pursuant to
the Delaware Business Trust Act by the entering into of that certain Trust
Agreement, dated as of _________ __, 1999 (the "OriginalTrust Agreement"), and
by the execution and filing by the Property Trustee with the Secretary of State
of the State of Delaware of the Certificate of Trust, filed on _________ __,
1999, the form of which is attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities (as defined
herein) by the Trust (as defined herein) to the Depositor; (ii) the issuance and
sale of the Preferred Securities (as defined herein) by the Trust pursuant to
the Underwriting Agreement (as defined herein); and (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures (as defined herein).
NOW THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party for the benefit of the
other parties and for the benefit of the Securityholders (as defined herein)
hereby amends and restates the Original Trust Agreement in its entirety and
agrees as follows.
ARTICLE I
DEFINED TERMS
SECTION 101. DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
<PAGE>
(a) the terms defined in this Article I have the meanings assigned to them
in this Article I and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) unless the context otherwise requires, any reference to an "Article" or
a "Section" refers to an Article or a Section, as the case may be, of this Trust
Agreement; and
(d) the words "herein", "hereof and "hereunder" and other words of similar
import refer to this Trust Agreement as a whole and not to any particular
Article, Section or other subdivision.
"Act" has the meaning specified in Section 608.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of additional interest
accrued on interest in arrears and paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Interest" has the meaning specified in Section 1.1 of the
Indenture.
"Administrative Trustee" means each of the Persons identified as an
"Administrative Trustee" in the preamble to this Trust Agreement solely in such
Person's capacity as Administrative Trustee of the Trust formed and continued
hereunder and not in such Person's individual capacity, or such Administrative
Trustee's successor in interest in such capacity, or any successor
Administrative Trustee appointed as herein provided.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person; (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person; (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person; (d) a partnership in which the specified person is a
general partner; (e) any officer or director of the specified Person; and (f) if
the specified Person is an individual, any entity of which the specified Person
is an executive officer, director or general partner.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Preferred Security or beneficial interest therein, the rules
and procedures of the Depositary for such Preferred Security, in each case to
the extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the Preamble to this Trust Agreement.
2
<PAGE>
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in the
premises adjudging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking liquidation or reorganization of or in
respect of such Person under the United States Bankruptcy Code of 1978, as
amended, or any other similar applicable federal or state law, and the
continuance of any such decree or order unvacated and unstayed for a period of
90 days; or the commencement of an involuntary case under the United States
Bankruptcy Code of 1978, as amended, in respect of such Person, which shall
continue undismissed for a period of 90 days or entry of an order for relief
in such case and such order shall have remained in force unvacated and
unstayed for a period of 90 days; or the entry of a decree or order of a court
having jurisdiction in the premises for the appointment on the ground of
insolvency or bankruptcy of a receiver, custodian, liquidator, trustee or
assignee in bankruptcy or insolvency of such Person or of its property, or for
the winding up or liquidation of its affairs, and such decree or order shall
have remained in force unvacated and unstayed for a period of 60 days; or
(b) the institution by such Person of proceedings to be adjudicated a
voluntary bankrupt, or the consent by such Person to the filing of a
bankruptcy proceeding against it, or the filing by such Person of a petition
or answer or consent seeking liquidation or reorganization under the United
States Bankruptcy Code of 1978, as amended, or other similar applicable
Federal or State law, or the consent by such Person to the filing of any such
petition or to the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or the making by such person of
a general assignment for the benefit of creditors.
"Bankruptcy Laws" has the meaning specified in Section 1009.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Depositor to have been duly adopted by the
Depositor's Board of Directors, or such committee of the Board of Directors or
officers of the Depositor to which authority to act on behalf of the Board of
Directors has been delegated, and to be in full force and effect on the date of
such certification, and delivered to the appropriate Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Cities of New York or New Orleans are
authorized or required by law, executive order or regulation to close, or a day
on which the principal Corporate Trust Office of the Property Trustee or of the
Debenture Trustee is closed for business.
"Capital Treatment Event" has the meaning specified in Section 1.1 of the
Indenture.
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"Certificate Depositary Agreement" means the agreement among the Trust, the
Depositor and DTC, as the initial Clearing Agency, dated as of the Closing Date,
substantially in the form attached as Exhibit B, as the same may be amended and
supplemented from time to time.
"Certificate of Trust" means the certificate of trust filed with the
Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
"Change in 1940 Act Law" shall have the meaning set forth in the definition
of "Investment Company Event."
"Clearing Agency" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act. DTC shall be the initial Clearing
Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
"Closing Date" means the date of execution and delivery of this Trust
Agreement.
"Code" means the Internal Revenue Code of 1986, or any successor statute,
in each case as amended from time to time.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets of
the Trust, having a Liquidation Amount of $10 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein. Common Securities rank pari
passu with the Preferred Securities; provided, however, that upon the occurrence
of an Event of Default, the right of holders of Common Securities to payment in
respect of (i) distributions, and (ii) payments upon liquidation, redemption and
otherwise are subordinated to the right of holders of Preferred Securities.
"Common Securities Certificate" means a certificate evidencing ownership of
Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means (i) when used with respect to the Property
Trustee, the principal corporate trust office of the Property Trustee located in
Wilmington, Delaware, and (ii) when used with respect to the Debenture Trustee,
the principal corporate trust office of the Debenture Trustee located in
Wilmington, Delaware.
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"Debenture Event of Default" means an "Event of Default" as defined in
Section 7.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the Indenture.
"Debenture Tax Event" means a "Tax Event" as specified in Section 1.1 of
the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a banking corporation
organized under the laws of the State of Delaware, and any successor thereto,
not in its individual capacity but solely as trustee under the Indenture.
"Debentures" means the aggregate principal amount of the Depositor's ___%
Junior Subordinated Deferrable Interest Debentures due 2029, issued pursuant to
the Indenture.
"Definitive Preferred Securities Certificates" means the Preferred
Securities Certificates issued in certificated, fully registered form (non-
global) as provided in Section 503A.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Delaware Code Sections 3801 et seq. as it may be amended from time to
time.
"Depositor" has the meaning specified in the Preamble to this Trust
Agreement.
"Depositary" means with respect any Preferred Securities issuable or issued
in whole or in part in the form of one or more Global Preferred Securities, the
Person designated as Depositary by the Depositor.
"Distribution Date" has the meaning specified in Section 401(a).
"Distributions" means amounts payable in respect of the Trust Securities as
provided in Section 401(b).
"DTC" means The Depository Trust Company.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Trust in the payment of any Distribution when it becomes
due and payable, and continuation of such default for a period of 30 days; or
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(c) default by the Trust in the payment of any Redemption Price of any
Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of any
covenant or warranty of the Trustees in this Trust Agreement (other than a
covenant or warranty a default in the performance of which or the breach of
which is dealt with in clause (b) or (c), above) and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate Liquidation Amount of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor property
Trustee within 60 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
statute, in each case as amended from time to time.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 901.
"Extended Interest Payment Period" has the meaning specified in Section 4.1
of the Indenture.
"Global Preferred Securities Certificate" means a Preferred Securities
Certificate evidencing ownership of Global Preferred Securities.
"Global Preferred Security" means a Preferred Security, the ownership and
transfers of which shall be made through book entries by a Clearing Agency as
described in Section 503A.
"Guarantee" means the Preferred Securities Guarantee Agreement executed and
delivered by the Depositor, as guarantor, and Wilmington Trust Company, as
Preferred Guarantee Trustee, contemporaneously with the execution and delivery
of this Trust Agreement, for the benefit of the Holders of the Preferred
Securities, as amended from time to time.
"Indenture" means the Indenture, dated as of ______ __, 1999 between the
Depositor and the Debenture Trustee, as trustee, as amended or supplemented from
time to time.
"Investment Company Act," means the Investment Company Act of 1940, or any
successor statute, in each case as amended from time to time.
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"Investment Company Event" has the meaning specified in Section 1.1 of the
Indenture.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount equal to the principal amount of
Debentures to be contemporaneously redeemed in accordance with the Indenture and
the proceeds of which shall be used to pay the Redemption Price of such Trust
Securities; and (b) with respect to a distribution of Debentures to Holders of
Trust Securities in connection with a termination or liquidation of the Trust,
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the Holder to whom such Debentures are distributed. Each
Debenture distributed pursuant to clause (b) above shall carry with it
accumulated interest in an amount equal to the accumulated and unpaid interest
then due on such Debentures.
"Liquidation Amount" means the stated amount of $10 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be distributed
to Holders of Trust Securities in connection with a dissolution and liquidation
of the Trust pursuant to Section 904(a).
"Liquidation Distribution" has the meaning specified in Section 904(d).
"Majority in liquidation amount of the Outstanding Preferred Securities"
means, except as provided in the terms of the Preferred Securities or, except as
provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the Liquidation
Amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accumulated and unpaid Distributions to but
excluding the date upon which the voting percentages are determined) of all
Outstanding Preferred Securities.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, President or a Vice President and by the Chief Financial Officer, the
Treasurer or an Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary, of the Depositor, and delivered to
the appropriate Trustee. One of the officers signing an Officers' Certificate
given pursuant to Section 314(a)(4) of the Trust Indenture Act shall be the
principal executive, financial or accounting officer of the Depositor. Any
Officers' Certificate delivered with respect to compliance with a condition or
covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
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(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer upon which the statements contained
in the certificate are based in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means an opinion in writing of independent outside
legal counsel, who may be counsel for the Trust, the Property Trustee, or the
Depositor and who shall be reasonably acceptable to the Property Trustee.
"Original Trust Agreement" has the meaning specified in the Recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means, as of
the date of determination, all Preferred Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore canceled by the Property Trustee or
delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or any
Paying Agent for the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in lieu
of which other Preferred Securities have been executed and delivered pursuant to
Sections 504, 505 and 511A; provided, however, that in determining whether the
Holders of the requisite Liquidation Amount of the Outstanding Preferred
Securities have given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Preferred Securities owned by the Depositor, any
Trustee or any Affiliate of the Depositor or any Trustee shall be disregarded
and deemed not to be Outstanding, except that (i) in determining whether any
Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Preferred Securities
that such Trustee actually knows to be so owned shall be so disregarded and (ii)
the foregoing shall not apply at any time when all of the outstanding Preferred
Securities are owned by the Depositor, one or more of the Trustees and/or any
such Affiliate. Preferred Securities so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction
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of the Administrative Trustees the pledgee's right so to act with respect to
such Preferred Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Owners" means each Person who is the beneficial owner of a beneficial
interest in a Global Preferred Security as reflected in the records of the
Clearing Agency or, if a Clearing Agency participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such Clearing
Agency (directly or indirectly, in accordance with the rules of such Clearing
Agency).
"Paying Agent" means any paying agent or co-paying agent appointed pursuant
to Section 509 and shall initially be the Property Trustee.
"Payment Account" means a segregated non-interest-bearing corporate trust
account maintained by the Property Trustee with the Bank in its trust department
for the benefit of the Securityholders and established pursuant to Section 301
in which all amounts paid in respect of the Debentures shall be held and from
which the Property Trustee shall make payments to the Securityholders in
accordance with Sections 401 and 402 or any other applicable provisions hereof.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization or
government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $10 and having the rights provided
therefor in this Trust Agreement, including the right to receive Distributions
and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate", means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as Exhibit
E.
"Property Trustee" means the Person identified as the "Property Trustee,"
in the preamble to this Trust Agreement solely in its capacity as Property
Trustee of the Trust and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
"Redemption Date" means, with respect to any Trust Security to be redeemed,
the date fixed for such redemption by or pursuant to this Trust Agreement;
provided that each Debenture Redemption Date and the stated maturity of the
Debentures shall be a Redemption Date for a Like Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date in an amount equal to the interest and
other sums (exclusive of principal) paid by the Depositor upon and in respect of
the concurrent redemption of a Like Amount of Debentures, allocated on a pro
rata
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basis (based on Liquidation Amounts) among the Trust Securities being redeemed
on the Redemption Date.
"Relevant Trustee" shall have the meaning specified in Section 810.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 504.
"Securityholder" or "Holder" means a Person in whose name a Trust Security
or Securities is registered in the Securities Register; any such Person is a
beneficial owner within the meaning of the Delaware Business Trust Act.
"Trust" means the Crescent Capital Trust I, a Delaware business trust
continued hereby.
"Trust Agreement" means this Amended and Restated Trust Agreement, as the
same may be modified, amended or supplemented in accordance with the applicable
provisions hereof, including all exhibits hereto, including, for all purposes of
this Trust Agreement and any such modification, amendment or supplement, the
provisions of the Trust Indenture Act that are deemed to be a part of and govern
this Trust Agreement and any such modification, amendment or supplement,
respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended, as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939, as amended, is
amended after such date, "Trust Indenture Act" means, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures; (b) any cash on deposit in, or
owing to, the Payment Account; and (c) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed to
be held by the Property Trustee pursuant to the terms of this Trust Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee and the Administrative
Trustees.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
______ __, 1999, including exhibits, among the Trust, the Depositor and the
Underwriter named therein.
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ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 201. NAME.
The Trust created and continued hereby shall be known as "Crescent Capital
Trust I," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may engage in the transactions
contemplated hereby, make and execute contracts and other instruments on behalf
of the Trust and sue and be sued.
SECTION 202. OFFICE OF THE PROPERTY TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Property Trustee in the State of Delaware is Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, or such other address in the State of Delaware
as the Property Trustee may designate by written notice to the Securityholders
and the Depositor. The principal place of business of the Property Trustee is in
the State of Delaware. The principal executive office of the Trust is c/o CB&T
Holding Corporation, 1100 Poydras Street, Suite 100, New Orleans, Louisiana
70112.
SECTION 203. INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in connection
with the Original Trust Agreement of the sum of $10.00, which constituted the
initial Trust Property. The Depositor shall pay organizational expenses of the
Trust as they arise or shall, upon request of any Trustee, promptly reimburse
such Trustee for any such expenses paid by such Trustee. The Depositor shall
make no claim upon the Trust Property for the payment of such expenses.
SECTION 204. ISSUANCE OF THE PREFERRED SECURITIES.
The Depositor on behalf of the Trust and pursuant to the Original Trust
Agreement, executed and delivered the Underwriting Agreement. Contemporaneously
with the execution and delivery of this Trust Agreement, an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section 502
and deliver in accordance with the Underwriting Agreement, Preferred Securities
Certificates, registered in the name of the Persons entitled thereto, in an
aggregate amount of _____________________ Preferred Securities having an
aggregate Liquidation Amount of $________ against receipt of the aggregate
purchase price of such Preferred Securities of $________, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee. If the
underwriters exercise their Option and there is an Option Closing Date (as such
terms are defined in the Underwriting Agreement), then an Administrative
Trustee, on behalf of the Trust, shall execute in accordance with Section 502
and deliver in accordance with the Underwriting Agreement, additional Preferred
Securities Certificates, registered in the name of the Persons entitled thereto,
in an aggregate amount of up to _______ Preferred Securities having an aggregate
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Liquidation Amount of up to $______ against receipt of the aggregate purchase
price of such Preferred Securities of $_______, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee.
SECTION 205. ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF
DEBENTURES.
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute in
accordance with Section 502 and deliver to the Depositor, Common Securities
Certificates, registered in the name of the Depositor in an aggregate amount of
Common Securities having an aggregate Liquidation Amount of $___________ against
payment by the Depositor of such amount, which amount such Administrative
Trustee shall promptly deliver to the Property Trustee. Contemporaneously
therewith, an Administrative Trustee on behalf of the Trust, shall subscribe to
and purchase from the Depositor corresponding amounts of Debentures, registered
in the name of the Property Trustee on behalf of the Trust and having an
aggregate principal amount equal to $____________ (being the sum of the amounts
delivered to the Property Trustee pursuant to (i) the second sentence of Section
204; and (ii) the first sentence of Section 205(a)), and, in satisfaction of the
purchase price for such Debentures, the Property Trustee, on behalf of the
Trust, shall deliver to the Depositor the sum of $__________.
(b) If the underwriters exercise the Option and there is an Option Closing
Date (as such terms are defined in the Underwriting Agreement), then an
Administrative Trustee, on behalf of the Trust, shall execute in accordance with
Section 502 and deliver to the Depositor, Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of Common
Securities having an aggregate Liquidation Amount of up to $_______ against
payment by the Depositor of such amount. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor corresponding amounts of Debentures, registered in the name
of the Trust and having an aggregate principal amount of up to $_______, and, in
satisfaction of the purchase price of such Debentures, the Property Trustee, on
behalf of the Trust, shall deliver to the Depositor the amount received from one
of the Administrative Trustees pursuant to the last sentence of Section 204
(being the sum of the amounts delivered to the Property Trustee pursuant to (i)
the third sentence of Section 204; and (ii) the first sentence of this Section
205(b)).
SECTION 206. DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Trust Securities and use the proceeds from such sale to acquire the Debentures;
and (b) to engage in those activities necessary, convenient or incidental
thereto. The Depositor hereby appoints the Trustees as trustees of the Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
Trustees hereby accept such appointment. The Property Trustee hereby declares
that it shall hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Securityholders. The
Administrative Trustees shall have all rights, powers and duties set forth
herein and in accordance with applicable law with respect to accomplishing the
purposes of the Trust. The
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Property Trustee shall be one of the Trustees of the Trust for the purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 207. AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance with
the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section 207 and Article VIII, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
(i) As among the Trustees, each Administrative Trustee, acting singly or
together, shall have the power and authority to act on behalf of the Trust
with respect to the following matters:
(A) the issuance and sale of the Trust Securities and compliance
with the Underwriting Agreement in connection therewith;
(B) to cause the Trust to enter into, and to execute, deliver and
perform on behalf of the Trust, the Expense Agreement, Certificate
Depositary Agreement and such other agreements or documents as may be
necessary or desirable in connection with the purposes and function of
the Trust;
(C) assisting in the registration of the Preferred Securities under
the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon the
American Stock Exchange or such securities exchange or exchanges as shall
be determined by the Depositor and the registration of the Preferred
Securities under the Exchange Act, and the preparation and filing of all
periodic and other reports and other documents pursuant to the foregoing;
(E) the sending of notices (other than notices of default) and other
information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
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(G) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(H) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of
the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes
for which the Trust was created;
(I) assisting in the registration or listing of the Preferred
Securities with DTC or upon such other trading facilities or exchanges as
shall be determined by the Depositor and the preparation and filing of
all periodic and other reports and other documents pursuant to the
foregoing; and
(J) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of
any such action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power, duty
and authority to act on behalf of the Trust with respect to the following
matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments made
in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of this
Trust Agreement;
(E) the exercise of all of the rights, powers and privileges of a
holder of the Debentures;
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(F) the sending of notices of default and other information regarding
the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with the
terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding up of
the affairs of and liquidation of the Trust and the execution and filing
of the certificate of cancellation with the Secretary of State of the
State of Delaware;
(I) after an Event of Default, the taking of any action incidental to
the foregoing as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this Trust
Agreement and protect and conserve the Trust Property for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance with
this Trust Agreement; and
(K) except as otherwise provided in this Section 207(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
207(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement; (ii) sell,
assign, transfer, exchange, mortgage, pledge, setoff or otherwise dispose of any
of the Trust Property or interests therein, including to Securityholders, except
as expressly provided herein; (iii) take any action that would cause the Trust
to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes; (iv) incur any indebtedness for borrowed money or issue any
other debt; or (v) take or consent to any action that would result in the
placement of a Lien on any of the Trust Property. The Administrative Trustees
shall defend all claims and demands of all Persons at any time claiming any Lien
on any of the Trust Property adverse to the interest of the Trust or the
Securityholders in their capacity as Securityholders.
(c) In connection with the issuance and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust with
respect to, or effect on behalf of the Trust, the following (and any actions
taken by the Depositor in furtherance of the following prior to the date of this
Trust Agreement are hereby ratified and confirmed in all respects):
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(i) the preparation and filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, the Debentures and
the Guarantee, including any amendments thereto;
(ii) the determination of the states in which to take appropriate action to
qualify or register for sale all or part of the Preferred Securities and to do
any and all such acts, other than actions which must be taken by or on behalf
of the Trust, and advise the Trustees of actions they must take on behalf of
the Trust, and prepare for execution and filing any documents to be executed
and filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(iii) the preparation for filing by the Trust and execution on behalf of
the Trust of an application to the American Stock Exchange or another national
stock exchange or other organizations for listing of any Preferred Securities
and to file or cause an Administrative Trustee to file thereafter with such
exchange or organization such notifications and documents as may be necessary
from time to time;
(iv) the preparation for filing by the Trust with the Commission and the
execution on behalf of the Trust of a registration statement on Form 8-A
relating to the registration of the Preferred Securities under Section 12(b)
or 12(g) of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery of, the
Underwriting Agreement providing for the sale of, the Preferred Securities;
and
(vi) the taking of any other actions necessary or desirable to carry out
any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust shall not be deemed to be an "investment
company" required to be registered under the Investment Company Act, shall be
classified as a "grantor trust" and not as an association taxable as a
corporation for United States federal income tax purposes and so that the
Debentures shall be treated as indebtedness of the Depositor for United States
federal income tax purposes. In this connection, subject to Section 1002, the
Depositor and the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law or this Trust Agreement, that each of the
Depositor and the Administrative Trustees determines in their discretion to be
necessary or desirable for such purposes.
SECTION 208. ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
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SECTION 209. TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Securityholders in accordance with
this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 301. PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 401. DISTRIBUTIONS.
The Trust Securities represent undivided beneficial interests in the Trust
Property, and Distributions (including Additional Amounts) will be made on the
Trust Securities at the rate and on the dates that payments of interest
(including of Additional Interest, as defined in the Indenture) are made on the
Debentures. Accordingly:
(a) Distributions on the Trust Securities shall be cumulative, and shall
accumulate whether or not there are funds of the Trust available for the payment
of Distributions. Distributions shall accumulate from the date of issuance, and,
except during any Extended Interest Payment Period with respect to the
Debentures, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 each year, commencing on______ __, 1999. If any
date on which a Distribution is otherwise payable on the Trust Securities is not
a Business Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without
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any reduction of interest or other payment in respect of any such acceleration)
except that, if such Business Day is in the next succeeding calendar year,
payment of such Distribution shall be made on the immediately preceding Business
Day (and without any reduction of interest or any other payment in respect of
any such acceleration), in each case with the same force and effect as if made
on such date (each date on which distributions are payable in accordance with
this Section 401(a), a "Distribution Date").
(b) Assuming payments of interest on the Debentures are made when due (and
before giving effect to Additional Amounts, if applicable), Distributions on the
Trust Securities shall be payable at a rate of ___% per annum of the Liquidation
Amount of the Trust Securities. The amount of Distributions payable for any full
period shall be computed on the basis of a 360-day year of twelve 30-day months.
Subject to the last sentence in Section 401(a), the amount of Distributions for
any period shorter than a full quarterly period for which Distributions are
computed shall be computed on the basis of the actual number of days elapsed in
such period based on a 360-day year of twelve 30-day months. During any Extended
Interest Payment Period with respect to the Debentures, Distributions on the
Preferred Securities shall be deferred for a period equal to the Extended
Interest Payment Period and shall be payable to the Holders in whose names the
Trust Securities are registered in the Securities Register as of the close of
business on the 15th day of the month in which the Extended Interest Payment
Period ends. The amount of Distributions payable for any period shall include
the Additional Amounts and Additional Interest, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a Distribution
Date shall be payable to the Holders thereof as they appear on the Securities
Register for the Trust Securities on the relevant record date, which shall be
the 15th day of the month in which the Distribution is payable (determined
without giving effect to the last sentence of Section 401(a)).
SECTION 402. REDEMPTION.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures the Trust shall be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee in the name
of and at the expense of the Trust by first-class mail, postage prepaid, mailed
not less than 30 nor more than 60 days prior to the Redemption Date to each
Holder of Trust Securities to be redeemed, at such Holder's address appearing in
the Securities Register. The Property Trustee shall have no responsibility for
the accuracy of any CUSIP number contained in such notice. All notices of
redemption shall state:
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(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be redeemed,
the identification and the aggregate Liquidation Amount of the particular
Trust Securities to be redeemed;
(v) that, on the Redemption Date, the Redemption Price shall become due and
payable upon each such Trust Security to be redeemed and that Distributions
thereon shall cease to accumulate on and after said date with respect to each
such Trust Security, except as provided in Section 402(d); and
(vi) the place or places where the Trust Securities are to be surrendered
for the payment of the Redemption Price.
(c) The Trust Securities redeemed on each Redemption Date shall be redeemed
at the Redemption Price with the proceeds from the contemporaneous redemption of
Debentures. Redemptions of the Trust Securities shall be made and the Redemption
Price shall be payable on each Redemption Date only to the extent that the Trust
has immediately available funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of any
Preferred Securities, then, by 10:00 a.m., New York City time, on the Redemption
Date, subject to Section 402(c), the Property Trustee will, so long as any of
the Preferred Securities are in book-entry-only form, irrevocably deposit with
the Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the appropriate
beneficial holders thereof. If any of the Preferred Securities are no longer in
book-entry-only form, the Property Trustee, subject to Section 402(c), will
provide the Paying Agent with irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof upon surrender of their Preferred
Securities Certificates. Notwithstanding the foregoing, Distributions payable on
or prior to the Redemption Date for any Trust Securities called for redemption
shall be payable to the Holders of such Trust Securities as they appear on the
Securities Register for the Trust Securities on the relevant record dates for
the related Distribution Dates. If notice of redemption shall have been given
and funds deposited as required, then upon the date of such deposit, all rights
of Securityholders holding Trust Securities so called for redemption shall
cease, except the right of such Securityholders to receive the Redemption Price
and any Distributions payable on or prior to the Redemption Date to which such
Securityholders may otherwise be entitled, but without interest, and such
Securities shall cease to be Outstanding. In the event that any date on which
any Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date shall be made on the next succeeding day
that is a
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Business Day (and without any reduction of interest or other payment in respect
of any such acceleration), except that, if such Business Day falls in the next
calendar year, such payment shall be made on the immediately preceding Business
Day (and without any reduction of interest or any other payment in respect of
any such acceleration), in each case, with the same force and effect as if made
on such date. In the event that payment of the Redemption Price in respect of
any Trust Securities called for redemption is improperly withheld or refused and
not paid either by the Trust or by the Depositor pursuant to the Guarantee,
Distributions on such Trust Securities shall continue to accumulate, at the then
applicable rate, from the Redemption Date originally established by the Trust
for such Trust Securities to the date such Redemption Price is actually paid, in
which case the actual payment date shall be the date fixed for redemption for
purposes of calculating the Redemption Price, and for periods after the
Redemption Date originally established the provisions of the third sentence of
this paragraph (d) shall cease to apply.
(e) Payment of the Redemption Price on the Trust Securities shall be made
to the record holders thereof as they appear on the Securities Register for the
Trust Securities on the relevant record date, which shall be one Business Day
prior to the relevant Redemption Date; provided, however, in the event that not
all the Preferred Securities remain in book-entry form, the relevant record date
for all Trust Securities shall be the date 15 days prior to the relevant
Redemption Date.
(f) Subject to Section 403(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Preferred Securities not previously called
for redemption, by such method (including, without limitation, by lot) as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $10 or an integral multiple of
$10 in excess thereof), of the Liquidation Amount of Preferred Securities of a
denomination larger than $10. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
SECTION 403. SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if applicable)
on, and the Redemption Price of, the Trust Securities, as applicable, shall be
made, subject to Section 402(f), pro rata among the Common Securities and the
Preferred Securities based on the Liquidation Amount of the Trust Securities,
provided, however, that if on any Distribution Date or Redemption Date any Event
of Default resulting from a Debenture Event of Default shall have occurred and
be
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continuing, no payment of any Distribution (including Additional Amounts, if
applicable) on, or Redemption Price of, any Common Security, and no other
payment on account of the redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the Redemption Price the full amount
of such Redemption Price on all Outstanding Preferred Securities then called for
redemption, shall have been made or provided for, and all funds immediately
available to the Property Trustee shall first be applied to the payment in full
in cash of all Distributions (including Additional Amounts, if applicable) on,
or the Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting from a
Debenture Event of Default, the Holder of Common Securities shall be deemed to
have waived any right to act with respect to any such Event of Default under
this Trust Agreement until the effect of all such Debenture Events of Default
with respect to the Preferred Securities shall have been cured, waived or
otherwise eliminated. Until any such Event of Default under this Trust Agreement
resulting from a Debenture Event of Default shall have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities shall have the right to direct
the Property Trustee to act on their behalf.
SECTION 404. PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts and Additional
Interest, if applicable) in respect of the Preferred Securities shall be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Securities Register or, if any Preferred Securities are held by a
Clearing Agency, such Distributions shall be made to the Clearing Agency in
immediately available funds, which will credit the relevant accounts on the
applicable Distribution Dates. Payments in respect of the Common Securities
shall be made in such manner as shall be mutually agreed between the Property
Trustee and the Common Securityholder.
SECTION 405. TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at the
Depositor's expense, and file all United States federal, state and local tax and
information returns and reports required to be filed by or in respect of the
Trust. In this regard, the Administrative Trustees shall (a) prepare and file
(or cause to be prepared and filed) the appropriate Internal Revenue Service
Form required to be filed in respect of the Trust in each taxable year of the
Trust; and (b) prepare and furnish (or cause to be prepared and furnished) to
each Securityholder the appropriate Internal Revenue Service form required to be
furnished to such Securityholder or the information required to be provided on
such form. The Administrative Trustees shall provide the Depositor with a copy
of all such returns and reports promptly after such filing or furnishing. The
Property Trustee shall
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comply with United States federal withholding and backup withholding tax laws
and information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
SECTION 406. PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Interest, the Property
Trustee, at the written direction of an Administrative Trustee or the Depositor,
shall promptly pay any taxes, duties or governmental charges of whatsoever
nature (other than withholding taxes) imposed on the Trust by the United States
or any other taxing authority.
SECTION 407. PAYMENTS UNDER INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities shall be
reduced by the amount of any corresponding payment such Holder (or any related
Owner) has directly received under the Indenture pursuant to Section 7.8 thereof
and 512(b) hereof and under the Guarantee.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 501. INITIAL OWNERSHIP.
Upon the creation of the Trust and the contribution by the Depositor
pursuant to Section 203 and until the issuance of the Trust Securities, and at
any time during which no Trust Securities are outstanding, the Depositor shall
be the sole beneficial owner of the Trust.
SECTION 502. THE TRUST SECURITIES CERTIFICATES.
(a) The Preferred Securities Certificates shall be issued in minimum
denominations of $10 Liquidation Amount and integral multiples of $10 in excess
thereof, and the Common Securities Certificates shall be issued in denominations
of $10 Liquidation Amount and integral multiples thereof. The Trust Securities
Certificates shall be executed on behalf of the Trust by manual, facsimile or
imprinted signature of at least one Administrative Trustee and the Property
Trustee shall authenticate and register the Preferred Securities Certificates.
Trust Securities Certificates bearing the signatures of individuals who were, at
the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefits of
this Trust Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Securityholder, and shall be entitled to the rights and subject to the
obligations of a Securityholder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Sections 504 and
511A.
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(b) Upon their original issuance, Preferred Securities Certificates shall
be issued in the form of one or more fully registered Global Preferred
Securities Certificates which will be deposited with or on behalf of the
Depositary and registered in the name of the Depositary or Depositary's nominee.
Unless and until it is exchangeable in whole or in part for the Preferred
Securities in definitive form, a global security may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor of such Depositary or a nominee of
such successor.
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 503. EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
On the Closing Date and on the date on which the Underwriters exercise the
option to purchase additional Preferred Securities, as applicable (the "Option
Closing Date"), the Administrative Trustees shall cause Trust Securities
Certificates, in an aggregate Liquidation Amount as provided in Sections 204 and
205, to be executed by manual, facsimile or imprinted signature on behalf of the
Trust by at least one of the Administrative Trustees and delivered to the
Property Trustee and upon such delivery, the Property Trustee shall authenticate
and register the Preferred Securities Certificates and make available for
delivery such Preferred Securities Certificates upon the written order of the
Depositor, executed by its Chairman of the Board, or President or any Vice
President and the Chief Financial Officer, Treasurer or an Assistant Treasurer
or Secretary or Assistant Secretary without further corporate action by the
Depositor, in authorized denominations.
SECTION 503A. GLOBAL PREFERRED SECURITIES.
(a) Each Global Preferred Security issued under this Trust Agreement shall
be registered in the name of the Clearing Agency designated by the Depositor for
the related Global Preferred Securities or a nominee thereof and delivered to
such Clearing Agency or a nominee thereof or custodian therefor.
(b) Notwithstanding any other provision in this Trust Agreement, no Global
Preferred Securities may be exchanged in whole or in part for Preferred
Securities registered, and no transfer of Global Preferred Securities in whole
or in part may be registered, in the name of any Person other than as set forth
in Section 502(b) unless (a) the Clearing Agency advises the Property Trustee in
writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Global Preferred Securities,
and the Administrative Trustees are unable to locate a qualified successor, (b)
the Trust at its option advises the Clearing Agency in writing that it elects to
eliminate the global system through the Clearing Agency, (c) after the
occurrence of a Debenture Event of Default in the circumstances described in
Section 511A(a) or (d) pursuant to the following
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sentence. All or any portion of a Global Preferred Security may be exchanged for
a Preferred Security that has a like aggregate principal amount and is not a
Global Preferred Security upon 20 days' prior written request made by the
Clearing Agency or its authorized representative to the Property Trustee;
provided, however that no Definitive Preferred Security Certificate shall be
issued in an amount representing less than $100,000 in aggregate Liquidation
Amount of Preferred Securities. Upon the occurrence of any event specified in
clause (a), (b) or (c) above, the Administrative Trustees shall notify the
Clearing Agency and the Clearing Agency shall notify all Owners of beneficial
interests in Global Preferred Securities, the Property Trustee and the
Administrative Trustees of the occurrence of such event and of the availability
of the Definitive Preferred Security Certificate to such Owners requesting the
same; provided, however, that no Definitive Preferred Security Certificate shall
be issued in an amount representing less than $10 in aggregate Liquidation
Amount of Preferred Securities. Upon surrender to the Administrative Trustees of
the typewritten Preferred Securities Certificate or certificates representing
the Global Preferred Securities held by the Clearing Agency, accompanied by
registration instructions, the Administrative Trustees, or any one of them,
shall execute Definitive Preferred Securities Certificates in accordance with
the instructions of the Clearing Agency. Neither the Securities Registrar nor
the Trustees shall be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of a Definitive Preferred Securities
Certificate, the Trustees shall recognize the Holder of the Definitive Preferred
Securities Certificate as a Securityholder. Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by the Administrative Trustees or any one of
them.
(c) If any Global Preferred Security is to be exchanged for Definitive
Preferred Securities Certificates or cancelled in part, or if Definitive
Preferred Securities Certificates are to be exchanged in whole or in part for a
Global Preferred Security, then either (i) such Global Preferred Security shall
be so surrendered for exchange or cancellation as provided in this Article V or
(ii) the aggregate Liquidation Amount represented by such Global Preferred
Security shall be reduced, subject to Section 502, or increased, by an amount
equal to the Liquidation Amount represented by that portion of the Global
Preferred Security to be so exchanged or cancelled, or equal to the Liquidation
Amount represented by such Definitive Preferred Securities Certificates to be so
exchanged for beneficial interests in the Global Preferred Security represented
thereby, as the case may be, by means of an appropriate adjustment made on the
records of the Securities Registrar, whereupon the Property Trustee, in
accordance with the Applicable Procedures, shall instruct the Clearing Agency or
its authorized representative to make a corresponding adjustment to its records.
Upon surrender to the Administrative Trustees or the Securities Registrar of the
Global Preferred Security by the Clearing Agency, accompanied by registration
instructions, the Administrative Trustees, or any one of them, shall execute the
Definitive Preferred Securities Certificates in accordance with the instructions
of the Clearing Agency and Section 502 hereof; provided, however, that no
Definitive Preferred Securities Certificates shall be issued in an amount
representing less than $10 in aggregate Liquidation Amount of Preferred
Securities. None of the Securities Registrar, the Property Trustee or the
Administrative Trustees shall be liable for any delay in delivery of such
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instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Property Trustee and Administrative Trustees shall recognize
the Holders of the Definitive Preferred Securities Certificates as
Securityholders. The Definitive Preferred Securities Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by the
execution thereof by the Administrative Trustees or any one of them.
(d) Every Preferred Security executed and delivered upon registration of,
transfer of, or in exchange for or in lieu of, a Global Preferred Security or
any portion thereof, whether pursuant to this Article V or Article IV or
otherwise, shall be executed and delivered in the form of, and shall be, a
Global Preferred Security, unless such Preferred Security is registered in the
name of a Person other than the Clearing Agency for such Global Preferred
Security or a nominee thereof.
(e) The Clearing Agency or its nominee, as registered owner of a Global
Preferred Security, shall be the Holder of such Global Preferred Security for
all purposes under this Trust Agreement and the Global Preferred Security, and
Owners with respect to a Global Preferred Security shall hold such interests
pursuant to the Applicable Procedures. The Securities Registrar and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Global Preferred Securities (including the
payment of the Liquidation Amount of and Distributions on the beneficial
interests in Global Preferred Securities represented thereby and the giving of
instructions or directions to Owners of Global Preferred Securities represented
thereby) as the sole Holder of the Global Preferred Securities represented
thereby and shall have no obligations to the Owners thereof. Neither the
Property Trustee nor the Securities Registrar shall have any liability in
respect of any transfers effected by the Clearing Agency.
The rights of the Owners of the Global Preferred Securities shall be
exercised only through the Clearing Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Certificate Depository Agreement, unless and until Definitive Preferred
Securities Certificates are issued pursuant hereto, the Clearing Agency will
make global transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants. Not in limitation of the other provisions herein contained, the
Property Trustee is authorized and empowered hereby to execute the Certificate
Depositary Agreement.
SECTION 504. REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
(a) The Property Trustee shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 508, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar and transfer agent (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to
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Section 510 in the case of the Common Securities Certificates) and registration
of transfers and exchanges of Preferred Securities Certificates as herein
provided. The Property Trustee shall be the initial Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 508, the
Administrative Trustees or any one of them shall execute and the Property
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Preferred Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of execution by such Administrative Trustee or Trustees. The
Securities Registrar shall not be required to register the transfer of any
Preferred Securities that have been called for redemption. At the option of a
Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon surrender of the Preferred Securities
Certificates to be exchanged at the office or agency maintained pursuant to
Section 508.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing; or (ii) register the transfer of or exchange of any Preferred
Securities so selected for redemption, in whole or in part, except the
unredeemed portion of any such Preferred Securities being redeemed in part.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
(b) Trust Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Trust Agreement. To
the fullest extent permitted by law, any transfer or purported transfer of any
Trust Security not made in accordance with this Trust Agreement shall be null
and void. Notwithstanding any other provisions of this Trust Agreement,
transfers and exchanges of Trust Securities and beneficial interests in Global
Securities, shall be made only in accordance with the following:
(i) Subject to Section 503A, a Trust Security that is not a Global
Preferred Security may be transferred, in whole or in part, to a Person who
takes delivery in the form of another Trust Security that is not a Global
Security as provided in Section 504(a).
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(ii) Subject to Section 503A and this Section 504, Preferred Securities
shall be freely transferable.
(iii) A beneficial interest in Global Preferred Security may be exchanged
for a Preferred Security that is not a Global Preferred Security as provided
in Section 503A.
SECTION 505. MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered to
the Securities Registrar, or if the Securities Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate, and (b) there shall be delivered to the Securities Registrar, the
Administrative Trustees and the Property Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice that such Trust Securities Certificate shall have been acquired by a bona
fide purchaser, the Administrative Trustees, or any one of them, on behalf of
the Trust shall execute by manual, facsimile or imprinted signature and the
Property Trustee in the case of a Preferred Securities Certificate shall
authenticate and make available for delivery, in exchange for or in lieu of any
such mutilated, destroyed, lost or stolen Trust Securities Certificate, a new
Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section 505, the Administrative Trustees or the Securities Registrar may require
the payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section 505 shall constitute conclusive
evidence of an undivided beneficial interest in the assets of the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 506. PERSONS DEEMED SECURITYHOLDERS.
The Trustees, the Paying Agent, the Securities Registrar and Depositor
shall treat any Persons in whose name any Trust Securities are issued as the
owner of such Trust Securities for the purpose of receiving Distributions and
for all other purposes whatsoever, and neither the Trust, the Property Trustee,
the Administrative Trustees, the Securities Registrar nor the Depositor shall be
bound by any notice to the contrary.
SECTION 507. ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
At any time when the Property Trustee is not also acting as the Securities
Registrar, the Administrative Trustees or the Depositor shall furnish or cause
to be furnished to the Property Trustee a list, in such form as the Property
Trustee may reasonably require, of the names and addresses of the
Securityholders as of ______ __ and ________ __ of each year and at such other
times as the Property Trustee may request in writing, in each case to the extent
such information is in the possession or control of the Administrative Trustees
or the Depositor or any paying agents of either and is not identical to a
previously supplied list or has not otherwise been received by the Property
Trustee in its capacity as Securities Registrar, and the Property Trustee shall
preserve, in
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as current a form as reasonably practicable the most recent list so furnished to
or received by it. To the extent applicable, the Depositor and Property Trustee
shall comply with the other provisions of Section 312(a) of the Trust Indenture
Act. The rights of Securityholders to communicate with other Securityholders
with respect to their rights under this Trust Agreement or under the Trust
Securities, and the corresponding rights of the Property Trustee shall be as
provided in the Trust Indenture Act. Each Holder and each Owner agrees not to
hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
SECTION 508. MAINTENANCE OF OFFICE OR AGENCY.
The Property Trustee shall designate, with the consent of the
Administrative Trustees, which consent shall not be unreasonably withheld, an
office or offices or agency or agencies where Preferred Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Trustees in respect of the Trust Securities
Certificates may be served. The Property Trustee initially designates its
corporate trust office at Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890, Attn: Corporate Trust Administration, as the
principal corporate trust office for such purposes. The Property Trustee shall
give prompt written notice to the Depositor, the Administrative Trustees and to
the Securityholders of any change in the location of the Securities Register or
any such office or agency.
SECTION 509. APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make Distributions to Securityholders from the
Payment Account and shall report the amounts of such Distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall have
the revocable power to withdraw funds from the Payment Account for the purpose
of making the Distributions referred to above. The Property Trustee may revoke
such power and remove the Paying Agent if such Trustee determines in its sole
discretion that the Paying Agent shall have failed to perform its obligation
under this Trust Agreement in any material respect. The Paying Agent shall
initially be the Property Trustee, and any co-paying agent chosen by the
Property Trustee, and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustee and the
Property Trustee. In the event that the Property Trustee shall no longer be the
Paying Agent or a successor Paying Agent shall resign or its authority to act be
revoked, the Property Trustee shall appoint a successor that is reasonably
acceptable to the Administrative Trustees to act as Paying Agent to execute and
deliver to the Trustees an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent shall hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders, and the Paying Agent, if other than the Property Trustee, shall
give such Property Trustee notice of any default in the making of any payment on
the Trust Securities. The Paying Agent shall return all unclaimed funds to the
Property Trustee and, upon removal of a Paying Agent, such Paying Agent shall
also return all funds in its
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possession to the Property Trustee. The provisions of Sections 801, 803 and 806
shall apply to the Property Trustee also in its role as Paying Agent, for so
long as the Property Trustee shall act as Paying Agent and, to the extent
applicable, to any other paying agent appointed hereunder. Any reference in this
Trust Agreement to the Paying Agent shall include any co-paying agent unless the
context requires otherwise.
SECTION 510. OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
On the Closing Date, the Depositor shall acquire and retain beneficial and
record ownership of the Common Securities. To the fullest extent permitted by
law, any attempted transfer of the Common Securities (other than a transfer
pursuant to Section 12.1 of the Indenture) shall be void. The Administrative
Trustees shall cause each Common Securities Certificate issued to the Depositor
to contain a legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO A
SUCCESSOR IN INTEREST TO CB&T HOLDING CORPORATION IN COMPLIANCE WITH APPLICABLE
LAW AND SECTION 510 OF THAT CERTAIN AMENDED AND RESTATED TRUST AGREEMENT DATED
_________ __, 1999, AMONG CB&T HOLDING CORPORATION, AS DEPOSITOR, WILMINGTON
TRUST COMPANY, AS PROPERTY TRUSTEE, AND THE ADMINISTRATIVE TRUSTEES NAMED
THEREIN."
SECTION 511. NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as all Preferred Securities are
represented by a Global Preferred Securities Certificate, the Trustees shall
give all such notices and communications specified herein to be given to the
Clearing Agency, and shall have no obligations to the Owners.
SECTION 511A. DEFINITIVE PREFERRED SECURITIES CERTIFICATE AND TEMPORARY
PREFERRED SECURITIES.
(a) If (a) the Clearing Agency advises the Trustees in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Preferred Securities, and the Depositor is
unable to locate a qualified successor, (b) the Trust at its option advises the
Trustees in writing that it elects to terminate the book-entry system through
the Clearing Agency or (c) after the occurrence of a Debenture Event of Default,
Holders of a beneficial interest in Preferred Securities representing beneficial
interests aggregating at least a majority of the Liquidation Amount advise the
Administrative Trustees in writing that the continuation of a book-entry system
though the Clearing Agency is no longer in the best interest of the Holders of
Preferred Securities, then the Administrative Trustees shall notify the Clearing
Agency and the Clearing Agency shall notify the owners of beneficial interests
in Global Preferred Securities and the other Trustees of the occurrence of such
event and of the availability of a Definitive Preferred Security to Holders of
such class requesting the same.
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(b) Pending the preparation of permanent Definitive Preferred Securities
Certificates, an Administrative Trustee may cause to be executed and delivered
on behalf of the Trust temporary Preferred Securities (the "Temporary Preferred
Securities"), which Temporary Preferred Securities are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the Definitive Preferred Securities Certificates
in lieu of which they are issued and with such appropriate insertions,
omissions, substitutions and other variations as the officers executing such
Temporary Preferred Securities may determine, as evidenced by their execution
thereof.
If Temporary Preferred Securities are issued, an Administrative Trustee
will cause Definitive Preferred Securities Certificates to be prepared without
unreasonable delay. After the preparation of the Definitive Preferred Securities
Certificates, the Temporary Preferred Securities shall be exchangeable for
Definitive Preferred Securities Certificates upon surrender of the Temporary
Preferred Securities at any office or agency of the Depositor designated herein,
without charge to the Holder. Upon surrender for cancellation of any one or more
Temporary Preferred Securities, the Depositor shall execute and an
Administrative Trustee shall execute by manual, facsimile or imprinted signature
and the Property Trustee shall authenticate and make available for delivery in
exchange therefor a like principal amount of Definitive Preferred Securities
Certificates of authorized denominations. Until so exchanged the Temporary
Preferred Securities shall in all respects be entitled to the same benefits as
Definitive Preferred Securities Certificates.
SECTION 512. RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 209, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights. When issued and delivered to Holders
of the Trust Securities against payment of the purchase price therefor, the
Trust Securities shall be fully paid and nonassessable, undivided beneficial
interests in the assets of the Trust. The Holders of the Trust Securities, in
their capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if, upon a
Debenture Event of Default arising from the failure to pay interest or principal
on the Debentures, any Holders of Preferred Securities then Outstanding shall,
to the fullest extent permitted by law and subject to the terms of this Trust
Agreement and the Indenture, have the right to institute a proceeding directly
against the Depositor for enforcement of payment to such Holder of principal of
or interest on the Debentures having a principal amount equal to the Liquidation
Amount of the Preferred Securities of such Holder.
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SECTION 513. CUSIP NUMBERS.
The Depositor in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustees shall use "CUSIP" numbers in notices
of redemption as a convenience to holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Depositor will promptly notify
the Property Trustee of any change in the CUSIP numbers.
ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 601. LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section 601, in Sections 512, 810 and 1002
and in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Trust or the obligations of the
parties hereto, nor shall anything herein set forth, or contained in the terms
of the Trust Securities Certificates, be construed so as to constitute the
Securityholders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on the Debenture Trustee with respect to such
Debentures; (ii) waive any past default which is waivable under Article VII of
the Indenture; (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable; or (iv) consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a Majority in liquidation amount of the
Outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each Holder of Outstanding Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each Holder of Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Outstanding Preferred Securities, except by a subsequent vote of
the Holders of the Outstanding Preferred Securities. The Property Trustee shall
notify each Holder of Outstanding Preferred Securities of any notice of default
received from the Debenture Trustee with respect to the Debentures. In addition
to obtaining the foregoing approvals of the Holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Administrative Trustees shall
provide to the Property Trustee, at the expense of the Depositor, an Opinion of
Counsel experienced in such matters to the effect that the Trust shall continue
to be classified as a grantor trust and not as an
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association taxable as a corporation for United States federal income tax
purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or the
Trustees otherwise propose to effect, (i) any action that would adversely affect
in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise; or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class shall be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in liquidation
amount of the Outstanding Preferred Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust would cease
to be classified as a grantor trust or would be classified as an association
taxable as a corporation for United States federal income tax purposes.
SECTION 602. NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the time,
place and purpose of the meeting, shall be given by the Property Trustee
pursuant to Section 1008 to each Preferred Securityholder of record, at his
registered address, at least 15 days and not more than 90 days before the
meeting. At any such meeting, any business properly before the meeting may be so
considered whether or not stated in the notice of the meeting. Any adjourned
meeting may be held as adjourned without further notice.
SECTION 603. MEETINGS OF PREFERRED SECURITYHOLDERS.
(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter in respect of which Preferred Securityholders are entitled to
vote upon the written request of the Preferred Securityholders of record of 25%
of the Outstanding Preferred Securities (based upon their aggregate Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any time
in their discretion, call a meeting of Preferred Securityholders to vote on any
matters as to which the Preferred Securityholders are entitled to vote.
(b) Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their aggregate Liquidation Amount), present in person or
by proxy shall constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the
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action of the Securityholders unless this Trust Agreement requires a greater
number of affirmative votes.
SECTION 604. VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $10 of Liquidation
Amount represented by their Trust Securities in respect of any matter as to
which such Securityholders are entitled to vote.
SECTION 605. PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which such vote shall be taken.
When Trust Securities are held jointly by several Persons, any one of them may
vote at any meeting in person or by proxy in respect of such Trust Securities,
but if more than one of them shall be present at such meeting in person or by
proxy, and such joint owners or their proxies so present disagree as to any vote
to be cast, such vote shall not be received in respect of such Trust Securities.
A proxy purporting to be executed by or on behalf of a Securityholder shall be
deemed valid unless challenged at or prior to its exercise, and, the burden of
proving invalidity shall rest on the challenger. No proxy shall be valid more
than three years after its date of execution.
SECTION 606. SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be taken
without a meeting and without prior notice if Securityholders holding a majority
of all Outstanding Trust Securities (based upon their aggregate Liquidation
Amount) entitled to vote in respect of such action (or such larger proportion
thereof as shall be required by any express provision of this Trust Agreement)
shall consent to the action in writing.
SECTION 607. RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate in
any Distribution on the Trust Securities, in respect of which a record date is
not otherwise provided for in this Trust Agreement, or for the purpose of any
other action, the Administrative Trustees may from time to time fix a date, not
more than 90 days prior to the date of any meeting of Securityholders or the
payment of any Distribution or other action as the case may be, as a record date
for the determination of the identity of the Securityholders of record for such
purposes.
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SECTION 608. ACTS OF SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Securityholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Securityholders in
person or by an agent duly appointed in writing, and, except as otherwise
expressly provided herein, such action shall become effective when such
instrument or instruments are delivered to an Administrative Trustee. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Securityholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Trust Agreement and (subject to Section 801) conclusive in favor
of the Trustees, if made in the manner provided in this Section 608.
(b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is by
a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Preferred Securities shall be proved by the Securities
Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every future
Securityholder of the same Trust Security and the Securityholder of every Trust
Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do so
with regard to all or any part of the Liquidation Amount of such Trust Security
or by one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
(f) A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust or any Person.
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SECTION 609. INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection and copying by
Securityholders and their authorized representatives during normal business
hours for any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 701. REPRESENTATIONS AND WARRANTIES OF THE PROPERTY TRUSTEE.
The Property Trustee as of the date hereof hereby represents and warrants
for the benefit of the Depositor and the Securityholders that:
(a) the Property Trustee is a Delaware banking corporation, duly organized,
validly existing and in good standing under the laws of the State of Delaware;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Property Trustee has its principal place of business in the State
of Delaware;
(d) this Trust Agreement has been duly authorized, executed and delivered
by the Property Trustee and constitutes the valid and legally binding agreement
of the Property Trustee enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors rights and to general equity principles;
(e) the execution, delivery and performance by the Property Trustee of this
Trust Agreement has been duly authorized by all necessary corporate or other
action on the part of the Property Trustee and does not require any approval of
stockholders of the Property Trustee and such execution delivery and performance
shall not (i) violate the charter or by-laws of the Property Trustee; (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Property Trustee is a party or by which it is bound; or (iii)
violate any law, governmental rule or regulation of the State of Delaware
governing the banking or trust powers of the Property Trustee or (as appropriate
in context) or any order, judgment or decree applicable to the Property Trustee;
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(f) neither the authorization, execution or delivery by the Property
Trustee of this Trust Agreement nor the consummation of any of the transactions
by the Property Trustee contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing Delaware law governing the banking or trust powers of the Property
Trustee, as the case may be;
(g) to the best of the Property Trustee's knowledge, there are no
proceedings pending or, to the best of the Property Trustee's knowledge,
threatened against or affecting the Property Trustee in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Property Trustee
to enter into or perform its obligations as one of the Trustees under this Trust
Agreement; and
(h) The Property Trustee satisfies the requirements of Section 3807 of the
Delaware Business Trust Act.
SECTION 702. REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date or the
Option Closing Date, if applicable, on behalf of the Trust have been duly
authorized and, shall have been, duly and validly executed, issued and delivered
by the Administrative Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders shall be, as of such date, entitled to the benefits of this
Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by the
Trust (or the Trustees on behalf of the Trust) under the laws of the State of
Delaware or any political subdivision thereof in connection with the execution,
delivery and performance by the Bank or the Property Trustee, as the case may
be, of this Trust Agreement.
ARTICLE VIII
TRUSTEES
SECTION 801. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as provided by
this Trust Agreement and, in the case of the Property Trustee, by the Trust
Indenture Act. Notwithstanding the foregoing, no provision of this Trust
Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds
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for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured. No Administrative Trustee shall be
liable for its act or omissions hereunder except as a result of its own gross
negligence or bad faith or willful misconduct. The Property Trustee's liability
shall be determined under the Trust Indenture Act. Whether or not therein
expressly so provided, every provision of this Trust Agreement relating to the
conduct or affecting the liability of or affording protection to the Trustees
shall be subject to the provisions of this Section 801. To the extent that, at
law or in equity, an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the Securityholders,
such Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the provisions of this
Trust Agreement. The provisions of this Trust Agreement, to the extent that they
restrict the duties and liabilities of the Administrative Trustees otherwise
existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in respect
of the Trust Securities shall be made only from the revenue and proceeds from
the Trust Property and only to the extent that there shall be sufficient revenue
or proceeds from the Trust Property to enable the Property Trustee or a Paying
Agent to make payments in accordance with the terms hereof. With respect to the
relationship of each Securityholder and the Trustees, each Securityholder, by
its acceptance of a Trust Security, agrees that it shall look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees are not personally
liable to it for any amount distributable in respect of any Trust Security or
for any other liability in respect of any Trust Security. This Section 801(b)
does not limit the liability of the Trustees expressly set forth elsewhere in
this Trust Agreement or, in the case of the Property Trustee, in the Trust
Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of judgment made
in good faith by an authorized officer of the Property Trustee, unless it
shall be proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a Majority in liquidation amount of
the Outstanding Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee, or
exercising any trust or power conferred upon the Property Trustee under this
Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Payment Account
shall be to deal with such
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Property in a similar manner as the Property Trustee deals with similar
property for its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any money
received by it except as it may otherwise agree in writing with the Depositor
and money held by the Property Trustee need not be segregated from other funds
held by it except in relation to the Payment Account maintained by the
Property Trustee pursuant to Section 301 and except to the extent otherwise
required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property Trustee
be liable for the negligence, default or misconduct of the Administrative
Trustees or the Depositor.
SECTION 802. CERTAIN NOTICES.
(a) Within 90 days after the occurrence of any Event of Default actually
known to the Property Trustee or, to the extent Section 315(b) of the Trust
Indenture Act applies, within 90 days after the occurrence of any default
hereunder known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 313(c) of the Trust Indenture
Act notice of such Event of Default or default to the Securityholders, the
Administrative Trustees and the Depositor, unless such Event of Default shall
have been cured or waived. For purposes of this Section 802, the term "Event of
Default" means any event that is or after notice or lapse of time or both would
become an Event of Default.
(b) The Administrative Trustees shall transmit, to the Securityholders and
the Property Trustee in the manner and to the extent provided in Section 1008
hereof and, to the extent applicable, Section 313(c) of the Trust Indenture Act,
notice of the Depositor's election to begin or further extend an Extended
Interest Payment Period on the Debentures (unless such election shall have been
revoked) within the time specified for transmitting such notice to the holders
of the Debentures pursuant to the Indenture as originally executed.
SECTION 803. CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 801:
(a) the Property Trustee may conclusively rely and shall be protected in
acting or refraining from acting in good faith upon any resolution, Opinion of
Counsel, certificate, written representation of a Holder or transferee,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
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(b) if (i) in performing its duties under this Trust Agreement the Property
Trustee is required to decide between alternative courses of action; or (ii) in
construing any of the provisions of this Trust Agreement the Property Trustee
finds the same ambiguous or inconsistent with other provisions contained herein;
or (iii) the Property Trustee is unsure of the application of any provision of
this Trust Agreement, then, except as to any matter as to which the Preferred
Securityholders are entitled to vote under the terms of this Trust Agreement,
the Property Trustee shall deliver a notice to the Depositor requesting written
instructions of the Depositor as to the course of action to be taken and the
Property Trustee shall take such action, or refrain from taking such action, as
the Property Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor, and shall have no liability for acting in accordance
with such instructions; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within 10 Business Days after it has
delivered such notice, or such reasonably shorter period of time set forth in
such notice (which to the extent practicable shall not be less than 2 Business
Days), it may, but shall be under no duty to, take or refrain from taking such
action not inconsistent with this Trust Agreement as it shall deem advisable and
in the best interests of the Securityholders, in which event the Property
Trustee shall have no liability except for its own bad faith, negligence or
willful misconduct;
(c) any direction or act of the Depositor or the Administrative Trustees
contemplated by this Trust Agreement shall be sufficiently evidenced by an
Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the Property
Trustee shall deem it desirable that a matter be established before undertaking,
suffering or omitting any action hereunder, the Property Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Depositor or
the Administrative Trustees;
(e) the Property Trustee shall have no duty on behalf of the Trust to see
to any recording, filing or registration of any instrument (including any
financing or continuation statement) or any filing under tax or securities laws
or any re-recording, refiling, or reregistration thereof;
(f) the Property Trustee may consult with counsel of its choice (which
counsel may be counsel to the Depositor or any of its Affiliates) and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon, and in accordance with such advice, the Property
Trustee shall have the right at any time to seek instructions concerning the
administration of this Trust Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
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(h) the Property Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through its agents or
attorneys, provided that the Property Trustee shall be responsible for its own
negligence or recklessness with respect to selection of any agent or attorney
appointed by it hereunder;
(j) except as provided in this Article VIII, in accepting the trusts hereby
created the Property Trustee acts solely as such hereunder and not in its
individual capacity;
(k) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the Property
Trustee (i) may request written instructions from the Holders of the Trust
Securities which written instructions may only be followed by the Property
Trustee if given by the Holders of the same proportion in Liquidation Amount of
the Trust Securities as would be entitled to direct the Property Trustee under
the terms of the Trust Securities in respect of such remedy, right or action;
(ii) may refrain from enforcing such remedy or right or taking such other action
until such instructions are received; and (iii) shall be protected in acting in
accordance with such written instructions; and
(l) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement. No provision of this
Trust Agreement shall be deemed to impose any duty or obligation on the Property
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in which it shall be
illegal, or in which the Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Property Trustee shall be construed to be a duty.
SECTION 804. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The Recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Trust, and the Trustees do not assume
any responsibility for their correctness. The Trustees shall not be accountable
for the use or application by the Depositor of the proceeds of the Debentures.
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SECTION 805. MAY HOLD SECURITIES.
Any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 808 and 813 and except as provided in the
definition of the term "Outstanding" in Article I, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such other
agent.
SECTION 806. COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time such compensation as the
Trustees and the Depositor may agree in writing for all services rendered by
them hereunder (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to such Trustee's negligence, bad faith or
willful misconduct (or, in the case of the Administrative Trustees, any such
expense, disbursement or advance as may be attributable to its, his or her gross
negligence, bad faith or willful misconduct); and
(c) to indemnify, to the fullest extent permitted by law, each of the
Trustees or any predecessor Trustee for, and to hold the Trustees harmless
against, any and all loss, damage, claim, liability, penalty or expense,
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of this Trust Agreement,
including the costs and expenses of defending itself against any claim or
liability in connection with the acceptance, exercise or performance of any of
its powers or duties hereunder, except any such expense, disbursement or advance
as may be attributable to such Trustee's negligence, bad faith or willful
misconduct (or, in the case of the Administrative Trustees, any such expense,
disbursement or advance as may be attributable to its, his or her gross
negligence, bad faith or willful misconduct).
The provisions of this Section 806 shall survive the termination of this
Trust Agreement or the earlier resignations or removal of any Trustee.
No Trustee may claim any Lien or charge on any Trust Property as a result
of any amount due pursuant to this Section 806.
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When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 7.1(a)(iv), Section 7.1(a)(v) or
7.1(a)(vi) of the Indenture, the expenses (including reasonable charges and
expenses of its counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable Bankruptcy Law.
SECTION 807. CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder with respect
to the Trust Securities. The Property Trustee shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000. If any such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of its
supervising or examining authority, then for the purposes of this Section 807,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Property Trustee with respect to the Trust
Securities shall cease to be eligible in accordance with the provisions of this
Section 807, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article VIII.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) One of the Trustees with respect to the Trust Securities at all times
shall meet the requirements of Section 3807 of the Delaware Business Trust Act.
SECTION 808. CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a "conflicting interest"
within the meaning of Section 310(b) of the Trust Indenture Act, if applicable,
the Property Trustee and Company shall in all respects comply with the
provisions of Section 310 of the Trust Indenture Act and, to the extent not
inconsistent therewith, this Trust Agreement; provided, however, that for
purposes of the first proviso contained in Section 310 (b) of the Trust
Indenture Act, the Indenture and Preferred Securities Guarantee shall be deemed
to be specifically described in this Trust Agreement.
SECTION 809. CO-TRUSTEES AND SEPARATE TRUSTEE.
(a) Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of any instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of
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such Trust Property, or to the extent required by law to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section 809. If the Depositor does not
join in such appointment within 15 days after the receipt by it of a request so
to do, or in case a Debenture Event of Default has occurred and is continuing,
the Property Trustee alone shall have power to make such appointment. Any co-
trustee or separate trustee appointed pursuant to this Section 809 shall either
be (i) a natural person who is at least 21 years of age and a resident of the
United States; or (ii) a legal entity with its principal place of business in
the United States that shall act through one or more persons authorized to bind
such entity.
(b) Should any written instrument from the Depositor be required by any co-
trustee or separate trustee so appointed for more fully confirming to such co-
trustee or separate trustee such property, title, right, or power, any and all
such instruments shall, on request, be executed, acknowledged, and delivered by
the Depositor.
(c) Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(i) The Trust Securities shall be executed and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(ii) The rights, powers, duties and obligations hereby conferred or imposed
upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by
the Property Trustee or by the Property Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be exercised and
performed by such co-trustee or separate trustee.
(iii) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under
this Section 809, and, in case a Debenture Event of Default has occurred and
is continuing, the Property Trustee shall have the power to accept the
resignation of, or remove, any such co-trustee or separate trustee without the
concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and agreements necessary or proper
to effectuate such resignation or removal.
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A successor to any co-trustee or separate trustee so resigned or removed may
be appointed in the manner provided in this Section 809.
(iv) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Property Trustee or any other trustee
hereunder.
(v) The Property Trustee shall not be liable by reason of any act of a co-
trustee or separate trustee.
(vi) Any Act of Holders delivered to the Property Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
SECTION 810. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article VIII shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 811.
(b) Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time with respect to the Trust Securities by giving written
notice thereof to the Depositor and with respect to the Property Trustee to the
Securityholders. If the instrument of acceptance by the successor Trustee
required by Section 811 shall not have been delivered to the Relevant Trustee
within 30 days after the giving of such notice of resignation, the Relevant
Trustee may petition, at the expense of the Depositor, any court of competent
jurisdiction for the appointment of a successor Relevant Trustee with respect to
the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee may be removed at such time by Act of the
Holders of a Majority in liquidation amount of the Outstanding Preferred
Securities, delivered to the Relevant Trustee (in its individual capacity and on
behalf of the Trust). An Administrative Trustee may be removed by the Common
Securityholder at any time. In no event will the Holders of the Preferred
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which right to remove is vested exclusively in the
Common Securityholder. If an instrument of acceptance by a Successor Trustee
required by Section 811 shall have not been delivered to the Relevant Trustee
within 30 days after the giving of such notice of removal, the Relevant Trustee
may petition, at the expense of the Depositor, any court of competent
jurisdiction for the appointment of a Successor Relevant Trustee with respect to
the Trust Securities.
(d) If any Trustee shall resign, be removed or become incapable of acting
as Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and be
continuing, the Common Securityholder, by Act of the
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Common Securityholder delivered to the retiring Trustee, shall promptly appoint
a successor Trustee or Trustees with respect to the Trust Securities and the
Trust, and the successor Trustee shall comply with the applicable requirements
of Section 811. If the Property Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee at a time when a
Debenture Event of Default shall have occurred and is continuing, the Preferred
Securityholders, by Act of the Securityholders of a Majority in liquidation
amount of the Outstanding Preferred Securities then Outstanding delivered to the
retiring Relevant Trustee, shall promptly appoint a successor Relevant Trustee
or Trustees with respect to the Trust Securities and the Trust, and such
successor Trustee shall comply with the applicable requirements of Section 811.
If an Administrative Trustee shall resign, be removed or become incapable of
acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by Act of the
Common Securityholder delivered to an Administrative Trustee, shall promptly
appoint a successor Administrative Trustee or Administrative Trustees with
respect to the Trust Securities and the Trust, and such successor Administrative
Trustee or Administrative Trustees shall comply with the applicable requirements
of Section 811. If no successor Relevant Trustee with respect to the Trust
Securities shall have been so appointed by the Common Securityholder or the
Preferred Securityholders and accepted appointment in the manner required by
Section 811, any Securityholder who has been a Securityholder of Trust
Securities on behalf of himself and all others similarly situated may petition a
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Trust Securities.
(e) The Administrative Trustee shall give notice of each resignation and
each removal of the Property Trustee and each appointment of a successor
Property Trustee to all Securityholders in the manner provided in Section 1008
and shall give notice to the Depositor.
(f) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee who is a natural person dies
or becomes, in the opinion of the Depositor, incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by (a)
the unanimous act of the remaining Administrative Trustees if there are at least
two of them; or (b) otherwise by the Depositor (with the successor in each case
being a Person who satisfies the eligibility requirement for Administrative
Trustees as forth in Section 807).
SECTION 811. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust Securities
shall execute and deliver an instrument hereto wherein each successor Relevant
Trustee shall accept such appointment and which shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, each
successor Relevant Trustee all the rights, powers, trusts and duties of the
retiring Relevant Trustee with respect to the Trust Securities and the Trust
and, upon the execution and delivery of such instrument, the resignation or
removal of the retiring Relevant Trustee shall become effective to the extent
provided therein and each such successor Relevant Trustee, without any further
act, deed or conveyance, shall
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become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee with respect to the Trust Securities and the Trust, but, on
request of the Trust or any successor Relevant Trustee such retiring Relevant
Trustee shall upon payment of its charges hereunder, duly assign, transfer and
deliver to such successor Relevant Trustee all Trust Property, all proceeds
thereof and money held by such retiring Relevant Trustee hereunder with respect
to the Trust Securities and the Trust.
(b) Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and trusts
referred to in the immediately preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article VIII.
SECTION 812. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Person into which the Property Trustee may be merged or converted or
with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Article VIII, without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
SECTION 813. PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee shall be or become, directly or
indirectly, a creditor of the Depositor or the Trust (or any other obligor upon
the Debentures or the Trust Securities), excluding any creditor relationship
described in Section 311(b) of the Trust Indenture Act, the Property Trustee
shall be subject to and shall take all actions necessary in order to comply with
the provisions of Section 311(a) of Trust Indenture Act regarding the collection
of claims against the Depositor or Trust (or any such other obligor), to the
extent applicable.
SECTION 814. REPORTS BY PROPERTY TRUSTEE.
(a) The Property Trustee shall transmit to Securityholders entitled to
receive the same under Section 313(c) of the Trust Indenture Act by mail such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to Section 313(b) of the Trust Indenture
Act at the times provided pursuant thereto. If required by Section 313(a) of the
Trust Indenture Act, the Property Trustee shall, within sixty days after each
May 15 following the date of the Trust Agreement, deliver to Securityholders
entitled to receive the same under Section 313(c)
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of the Trust Indenture Act by mail a brief report, dated as of such May 15,
which complies with the provisions of such Section 313(a).
(b) A copy of each such report provided for in this Section 814 shall, at
the time of such transmission to Holders, be filed by the Property Trustee with
the American Stock Exchange or other organization upon which the Trust
Securities are listed, and also with the Commission.
SECTION 815. REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such documents, reports and information as
required by Section 314 of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314(a) of the Trust Indenture Act in the form in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Property Trustee
is for information purposes only and the Property Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Depositor's
compliance with any of its covenants hereunder (as to which the Property Trustee
is entitled to rely exclusively on Officers' Certificates).
The Depositor shall transmit to Securityholders, in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act, such summaries of
the above-referenced materials as may be required by Section 314(a)(3) of the
Trust Indenture Act.
SECTION 816. EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee (i) such evidence of compliance with
any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act in accordance with the requirements of said Section and (ii) such
certificates, if any, as may be required by Section 314(a)(4) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(a)(4) or 314(c)(1) of the Trust Indenture Act shall be
given in the form of an Officers' Certificate.
SECTION 817. NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, provided that the Holder of all
of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 817(a), or if the
number of Trustees is increased pursuant
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to Section 817(a), a vacancy shall occur. The vacancy shall be filled with a
Trustee appointed in accordance with Section 810.
(c) The death, resignation, retirement, removal, bankruptcy, incompetence
or incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Administrative
Trustees shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 810, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
SECTION 818. DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
207(a); and
(b) The Administrative Trustees shall have power to delegate from time to
time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the Trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
SECTION 819. VOTING.
Except as otherwise provided in this Trust Agreement, the consent or
approval of the Administrative Trustees shall require consent or approval by not
less than a majority of the Administrative Trustees, unless there are only two,
in which case both must consent.
ARTICLE IX
DISSOLUTION, LIQUIDATION AND MERGER
SECTION 901. DISSOLUTION UPON EXPIRATION DATE.
Unless earlier dissolved, the Trust shall automatically dissolve on ______
__, 2029 (the "Expiration Date").
SECTION 902. EARLY DISSOLUTION.
The first to occur of any of the following events is an "Early Termination
Event" upon the occurrence of which the Trust shall be dissolved:
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(a) the occurrence of a Bankruptcy Event in respect of, or the dissolution
or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the Depositor
at any time (which direction is wholly optional and within the discretion of the
Depositor), subject to the Depositor having received any required prior
approvals under applicable federal or state banking guidelines, policies or
regulations, to dissolve the Trust and distribute the Debentures to
Securityholders in exchange for the Preferred Securities in accordance with
Section 904;
(c) the redemption of all of the Preferred Securities in connection with
the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction.
SECTION 903. TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur of
the following: (a) the distribution by the Property Trustee to Securityholders
upon the liquidation of the Trust pursuant to Section 904, or upon the
redemption of all of the Trust Securities pursuant to Section 402, of all
amounts required to be distributed hereunder upon the final payment of the Trust
Securities; (b) the payment of any expenses owed by the Trust; (c) the discharge
of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Securityholders; and (d) the filing of a Certificate of Cancellation by the
Administrative Trustees under the Delaware Business Trust Act.
SECTION 904. LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b), or (d) of
Section 902 occurs or upon the Expiration Date, the Trust shall be liquidated by
the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 904(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage prepaid, mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such Holder's address appearing in the Securities Register. All notices of
liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust Securities
shall no longer be deemed to be Outstanding and any Trust Securities
Certificates not surrendered for exchange shall be deemed to represent a Like
Amount of Debentures;
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(iii) provide such information with respect to the mechanics by which
Holders may exchange Trust Securities Certificates for Debentures, or, if
Section 904(d) applies, receive a Liquidation Distribution, as the
Administrative Trustees shall deem appropriate;
(iv) state the CUSIP number; and
(v) state the office or agency of the Trust where Securities should be
surrendered.
(b) Except where Section 902(c) or 904(d) applies, in order to effect the
liquidation of the Trust and distribution of the Debentures to Securityholders,
the Property Trustee shall establish a record date for such distribution (which
shall be not more than 45 days prior to the Liquidation Date) and, either itself
acting as exchange agent or through the appointment of a separate exchange
agent, shall establish such procedures as it shall deem appropriate to effect
the distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Except where Section 902(c) or 904(d) applies, after the Liquidation
Date, (i) the Trust Securities shall no longer be deemed to be Outstanding; (ii)
certificates representing a Like Amount of Debentures shall be issued to holders
of Trust Securities Certificates upon surrender of such certificates to the
Administrative Trustees or their agent for exchange; (iii) the Depositor shall
use its reasonable efforts to have the Debentures listed on the American Stock
Exchange or on such other securities exchange or other organization as the
Preferred Securities are then listed or traded; (iv) any Trust Securities
Certificates not so surrendered for exchange shall be deemed to represent a Like
Amount of Debentures, accruing interest at the rate and for the period provided
for in the Debentures from the last Distribution Date on which a Distribution
was made on such Trust Securities Certificates until such certificates are so
surrendered (and until such certificates are so surrendered, no payments of
interest or principal shall be made to holders of Trust Securities Certificates
with respect to such Debentures): and (v) all rights of Securityholders holding
Trust Securities shall cease, except the right of such Securityholders to
receive Debentures upon surrender of Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this Section
904, whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Administrative Trustees not to be practical, the
Trust Property shall be liquidated, and the Trust shall be wound-up by the
Property Trustee in such manner as the Property Trustee determines. In such
event, Securityholders shall be entitled to receive out of the assets of the
Trust available for distribution to Securityholders, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, an amount
equal to the Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such winding-up the Liquidation Distribution can be
paid only in part because the Trust has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then, subject to the next
succeeding sentence, the amounts payable by the Trust on the Trust Securities
shall be paid on a pro rata basis (based upon Liquidation Amounts). The Holder
of the Common Securities
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shall be entitled to receive Liquidation Distributions upon any such winding-up
pro rata (determined as aforesaid) with Holders of Preferred Securities, except
that, if a Debenture Event of Default has occurred and is continuing, the
Preferred Securities shall have a priority over the Common Securities.
SECTION 905. MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any Person, except pursuant to this Section 905
or Section 904. At the request of the Depositor, with the consent of the
Administrative Trustees and without the consent of the Holders of the Preferred
Securities or the Property Trustee, the Trust may merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities; or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise; (ii) the Depositor expressly
appoints a trustee of such successor entity possessing substantially the same
powers and duties as the Property Trustee as the holder of the Debentures; (iii)
the Successor Securities are registered or listed, or any Successor Securities
shall be registered or listed upon notification of issuance, on any national
securities exchange or other organization on which the Preferred Securities are
then registered or listed (including, if applicable, the American Stock
Exchange), if any; (iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Preferred Securities (including
any Successor Securities) to be downgraded by any nationally recognized
statistical rating organization, (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities (including
any Successor Securities) in any material respect; (vi) such successor entity
has a purpose substantially identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease,
the Depositor has received an Opinion of Counsel to the effect that (a) such
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the Holders
of the Preferred Securities (including any Successor Securities) in any material
respect: and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity shall be required to register as an "investment company" under the
Investment Company Act, and (viii) the Depositor or any permitted successor or
assignee owns all of the common securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding the
foregoing, the Trust shall not, except with the consent of Holders of 100% in
Liquidation Amount of the Preferred Securities, consolidate, amalgamate, merge
with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other Person or permit any other
Person to consolidate, amalgamate, merge with or into, or replace it if such
consolidation,
51
<PAGE>
amalgamation, merger, replacement, conveyance, transfer or lease would cause the
Trust or the successor entity to be classified as other than a grantor trust for
United States federal income tax purposes.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 1001. LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death, incapacity, dissolution, bankruptcy or termination of any Person
having an interest, beneficial or otherwise, in Trust Securities shall not
operate to terminate this Trust Agreement, nor dissolve, terminate or annul the
Trust, nor entitle the legal representatives or heirs of such Person or any
Securityholder for such Person, to claim an accounting, take any action or bring
any proceeding in any court for a partition or winding-up of the arrangements
contemplated hereby, nor otherwise affect the rights, obligations and
liabilities of the parties hereto or any of them.
SECTION 1002. AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the Trustees
and the Depositor, without the consent of any Securityholders, (i) as provided
in Section 811 with respect to acceptance of appointment by a successor Trustee;
(ii) to cure any ambiguity, correct or supplement any provision herein or
therein which may be inconsistent with any other provision herein or therein, or
to make any other provisions with respect to matters or questions arising under
this Trust Agreement, that shall not be inconsistent with the other provisions
of this Trust Agreement; or (iii) to modify, eliminate or add to any provisions
of this Trust Agreement to such extent as shall be necessary to ensure that the
Trust shall be classified for United States federal income tax purposes as a
grantor trust at all times that any Trust Securities are outstanding or to
ensure that the Trust shall not be required to register as an "investment
company" under the Investment Company Act; provided, however, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder, and any such amendments of this Trust
Agreement shall become effective when notice thereof is given to the
Securityholders.
(b) Except as provided in Section 601(c) or Section 1002(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding; and (ii) upon receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment shall not affect the Trust's status
as a grantor trust for United Status federal income tax purposes or the Trust's
exemption from status of an "investment company" under the Investment Company
Act.
52
<PAGE>
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 603 or 606 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date; or (ii) restrict the right of a Securityholder to institute suit
for the enforcement of any such payment on or after such date. Notwithstanding
any other provision herein, without the unanimous consent of the Securityholders
(such consent being obtained in accordance with Section 603 or 606 hereof), this
paragraph (c) of this Section 1002 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption from
status of an "investment company" under the Investment Company Act or to fail or
cease to be classified as a grantor trust for United States federal income tax
purposes.
(e) In the event that any amendment to this Trust Agreement is made, the
Administrative Trustees shall promptly provide to the Depositor a copy of such
amendment.
(f) The Property Trustee shall not be required to enter into any amendment
to this Trust Agreement which adversely affects its own rights, duties or
immunities under this Trust Agreement. The Property Trustee shall be entitled to
receive an Opinion of Counsel and an Officers' Certificate stating that any
amendment to this Trust Agreement is in compliance with this Trust Agreement.
SECTION 1003. SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 1004. GOVERNING LAW.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
SECURITYHOLDERS, THE TRUST AND THE TRUSTEES WITH RESPECT TO THIS TRUST AGREEMENT
AND THE TRUST SECURITIES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF DELAWARE (WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES).
SECTION 1005. PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day that
is not a Business Day, then such payment need not be made on such date but may
be made on the next succeeding day which is a Business Day (except as otherwise
provided in Sections 401(a) and 402(d)), with the same
53
<PAGE>
force and effect as though made on the date fixed for such payment, and no
distribution shall accumulate thereon for the period after such date.
SECTION 1006. SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the benefit
of any successor to the Depositor, the Trust or the Relevant Trustee(s),
including any successor by operation of law. The Depositor shall not assign its
obligations hereunder except as contemplated by Article XII of the Indenture and
unless the assignee thereof agrees in writing, in form and substance
satisfactory to the Property Trustee, to perform all of Depositor's obligations
hereunder with the same effect as if it had been named herein as Depositor.
SECTION 1007. HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 1008. REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any provision of
this Trust Agreement is required or permitted to be given or served to or upon
any Securityholder or the Depositor may be given or served in writing by deposit
thereof, first-class postage prepaid, in the United States mail, hand delivery
or facsimile transmission, in each case, addressed, (a) in the case of a
Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to CB&T Holding
Corporation,1100 Poydras Street, Suite 100, New Orleans, Louisiana 70112,
Attention: Chief Executive Officer, facsimile no.:(504) 552-4454. Such notice,
demand or other communication to or upon a Securityholder shall be deemed to
have been sufficiently given or made, for all purposes, upon hand delivery,
mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given or
served in writing by deposit thereof, first-class postage prepaid, in the United
States mail, hand delivery or facsimile transmission, in each case addressed
(until another address is published by the Trust) as follows: (a) with respect
to the Property Trustee, to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration; (b) with respect to the Trust or the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of Crescent Capital Trust I." Such notice, demand or
other communication to or upon the Trust or the Property Trustee shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
54
<PAGE>
SECTION 1009. AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been dissolved in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Trust under any bankruptcy, insolvency,
reorganization or other similar law (including, without limitation, the United
States Bankruptcy Code of 1978, as amended) (collectively, "Bankruptcy Laws") or
otherwise join in the commencement of any proceeding against the Trust under any
Bankruptcy Law. In the event the Depositor takes action in violation of this
Section 1009, the Property Trustee agrees, for the benefit of Securityholders,
that at the expense of the Depositor (which expense shall be paid prior to the
filing), it shall file an answer with the bankruptcy court or otherwise properly
contest the filing of such petition by the Depositor against the Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be estopped and precluded
therefrom. The provisions of this Section 1009 shall survive the termination of
this Trust Agreement.
SECTION 1010. TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee for
the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by any
of the provisions of the Trust Indenture Act, such required provision shall
control. If any provision of this Trust Agreement modifies or excludes any
provision of the Trust Indenture Act which may be so modified or excluded, the
latter provision shall be deemed to apply to this Trust Agreement as so modified
or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities representing
undivided beneficial interests in the assets of the Trust.
SECTION 1011. ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN BY
OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE
OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL
ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN
SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF THIS TRUST
55
<PAGE>
AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS OF THE
GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT OF THE TRUST,
SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS OF THIS TRUST
AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS AMONG THE TRUST AND SUCH
SECURITYHOLDER AND SUCH OTHERS.
56
<PAGE>
CB&T HOLDING CORPORATION,
AS DEPOSITOR
By:
-----------------------------------
Name: Gary N. Solomon
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY,
AS PROPERTY TRUSTEE
By:
-----------------------------------
Name:
Title:
--------------------------------------
Name: Gary N. Solomon
Title: As Administrative Trustee
--------------------------------------
Name: Paul R. Trapani, Jr.
Title: As Administrative Trustee
--------------------------------------
Name: William F. Haacke, Jr.
Title: As Administrative Trustee
57
<PAGE>
Exhibit 4.5
Certificate Number Number of Preferred Securities
P-1 _____________
CUSIP NO. _____________
CERTIFICATE EVIDENCING PREFERRED SECURITIES
OF
CRESCENT CAPITAL TRUST I
___% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $10 PER PREFERRED SECURITY)
Crescent Capital Trust I, a statutory business trust created under the laws
of the State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of ______________________ preferred securities
of the Trust representing an undivided beneficial interest in the assets of the
Trust and designated the Crescent Capital Trust I ___% Cumulative Trust
Preferred Securities (liquidation amount $10 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 504 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Securities are set forth in, and the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the terms and provisions of, the Amended and Restated Trust Agreement of the
Trust dated as of ________ __, 1999, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the terms of
Preferred Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement, as amended, entered into by CB&T Holding
Corporation., a Louisiana corporation, and Wilmington Trust Company, as
guarantee trustee, dated as of __________ __, 1999 (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust Agreement
and the Guarantee to the Holder without charge upon written request to the Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust has
executed this certificate this ___ day of __________, 1999.
CRESCENT CAPITAL TRUST I
By:
----------------------------------
Name: Paul R. Trapani, Jr.
Title: Administrative Trustee
This is one of the Preferred Securities referred to in the Trust Agreement.
Dated: ________ __, 1999 WILMINGTON TRUST COMPANY,
as Trustee
By:
----------------------------------
Authorized Signatory
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Security
certificate to:
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert assignees social security or tax identification number)
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
(Insert address and zip code of assignee)
and irrevocably appoints
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ---------------------------------------------------------- agent to
transfer this Security certificate on the books of the Company. The agent may
substitute another to act for him or her.
Date:
----------------------------------------
Signature:
-----------------------------------
(Sign exactly as your name appears on
the other side of this Security)
Signature Guarantee:
--------------------------------------
- ----------------
Signature must be guaranteed by an "eligible guarantor institution" that is a
bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities and Exchange Act of 1934, as amended.
<PAGE>
Exhibit 4.6
PREFERRED SECURITIES GUARANTEE AGREEMENT
BY AND BETWEEN
CB&T HOLDING CORPORATION
AND
WILMINGTON TRUST COMPANY
___________ __, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
ARTICLE I DEFINITIONS AND INTERPRETATION........................ 1
Section 1.1 Definitions and Interpretation........................ 1
ARTICLE II TRUST INDENTURE ACT................................... 6
Section 2.1 Trust Indenture Act; Application...................... 6
Section 2.2 Lists of Holders of Securities........................ 6
Section 2.3 Reports by the Preferred Guarantee Trustee............ 6
Section 2.4 Periodic Reports to Preferred Guarantee Trustee....... 6
Section 2.5 Evidence of Compliance with Conditions Precedent...... 7
Section 2.6 Events of Default; Waiver............................. 7
Section 2.7 Event of Default; Notice.............................. 7
Section 2.8 Conflicting Interests................................. 8
ARTICLE III POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE
TRUSTEE............................................. 8
Section 3.1 Powers And Duties of The Preferred Guarantee Trustee.. 8
Section 3.2 Certain Rights of Preferred Guarantee Trustee......... 10
Section 3.3 Not Responsible For Recitals or Issuance of Guarantee. 11
ARTICLE IV PREFERRED GUARANTEE TRUSTEE........................... 12
Section 4.1 Preferred Guarantee Trustee; Eligibility.............. 12
Section 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees.................................. 12
ARTICLE V GUARANTEE............................................. 13
Section 5.1 Guarantee............................................. 13
Section 5.2 Waiver of Notice and Demand........................... 13
Section 5.3 Obligations Not Affected.............................. 14
Section 5.4 Rights of Holders..................................... 15
Section 5.5 Guarantee of Payment.................................. 15
Section 5.6 Subrogation........................................... 15
Section 5.7 Independent Obligations............................... 15
ARTICLE VI LIMITATION OF TRANSACTIONS; SUBORDINATION............. 16
Section 6.1 Limitation of Transactions............................ 16
Section 6.2 Ranking............................................... 16
ARTICLE VII TERMINATION........................................... 16
Section 7.1 Termination........................................... 16
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
ARTICLE VIII INDEMNIFICATION....................................... 17
Section 8.1 Exculpation........................................... 17
Section 8.2 Indemnification....................................... 17
ARTICLE IX MISCELLANEOUS......................................... 18
Section 9.1 Successors and Assigns................................ 18
Section 9.2 Amendments............................................ 18
Section 9.3 Notices............................................... 18
Section 9.4 Benefit............................................... 19
Section 9.5 Governing Law......................................... 19
</TABLE>
ii
<PAGE>
CROSS REFERENCE TABLE
Section of Trust Indenture Section of Guarantee Agreement
Act of 1939, as Amended
310(a) 4.1 (a)
310(b) 4.1 (c), 2.8
310(c) Not Applicable
31l(a) 2.2(b)
311(b) 2.2(b)
311(c) Not Applicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Not Applicable
314(c) 2.5
314(d) Not Applicable
314(e) 1.1, 2.5, 3.2
314(f) 2.1, 3.2
315(a) 3. 1 (d)
315(b) 2.7
315(c) 3.1
315(d) 3. 1 (d)
315(e) Not Applicable
316(a) 1.1, 2.6, 5.4
316(b) 5.1, 5. 3
317(a) 3.1
317(b) Not Applicable
318(a) 2.1
318(b) 2.1
318(c) 2.1
Note: This Cross-Reference Table does not constitute part of this Agreement and
shall not affect the interpretation of any of its terms or provisions
iii
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
THIS PREFERRED SECURITIES GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of ________ __, 1999, is executed and delivered by CB&T
HOLDING CORPORATION, a Louisiana corporation (the "Guarantor"), and WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as trustee (the "Preferred
Guarantee Trustee"), for the benefit of the Holders (as defined herein) from
time to time of the Preferred Securities (as defined herein) of Crescent Capital
Trust I, a Delaware statutory business trust (the "Trust").
RECITALS
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of ________ __, 1999, among the trustees of the Trust
named herein, the Guarantor, as depositor, and the holders from time to time of
undivided beneficial interests in the assets of the Trust, the Trust is issuing
preferred securities, having an aggregate liquidation amount of $10 per share,
designated the ___% Cumulative Trust Preferred Securities (the "Preferred
Securities") representing undivided beneficial ownership interests in the assets
of the Trust and having the terms set forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Trust and the
proceeds thereof, together with the proceeds from the issuance of the Trust's
Common Securities, will be used to purchase the Junior Subordinated Debentures
due 2029 (the "Junior Subordinated Debentures") of the Guarantor which will be
deposited with Wilmington Trust Company, as Property Trustee under the Trust
Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 DEFINITIONS AND INTERPRETATION.
In this Preferred Securities Guarantee, unless the context otherwise
requires:
(a) capitalized terms used in this Preferred Securities Guarantee but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
<PAGE>
(b) terms defined in the Trust Agreement in effect on the date of execution
of this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined herein;
(c) a term defined anywhere in this Preferred Securities Guarantee has the
same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or "this
Preferred Securities Guarantee" are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to Articles and
Sections are to Articles and Sections of this Preferred Securities Guarantee,
unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning when
used in this Preferred Securities Guarantee, unless otherwise defined in this
Preferred Securities Guarantee or unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Business Day" means any day other than a Saturday or Sunday or a day on
which banking institutions in the Cities of New York or New Orleans are
authorized or required by law, executive order or regulation to close or a day
on which the Corporate Trust Office of the Preferred Guarantee Trustee is closed
for business.
"Corporate Trust Office" means the office of the Preferred Guarantee
Trustee at which the corporate trust business of the Preferred Guarantee Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Agreement is located at Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Preferred
Securities.
"Debentures" means the ___% Junior Subordinated Debentures due 2029, of the
Debenture Issuer held by the Property Trustee of the Trust.
"Debenture Issuer" means the Guarantor.
"Debt" means with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent: (i) every
obligation of such Person for money
2
<PAGE>
borrowed; (ii) every obligation of such Person evidenced by bonds, debentures,
notes or other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses; (iii) every
reimbursement obligation of such Person with respect to letters of credit,
bankers' acceptances or similar facilities issued for the account of such
Person; (iv) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; (vi) all indebtedness of such person
whether incurred on or prior to the date of the Indenture or thereafter
incurred, for claims in respect of derivative products, including interest rate,
foreign exchange rate and commodity forward contracts, options and swaps and
similar arrangements; and (vii) every obligation of the type referred to in
clauses (i) through (vi) of another Person and all dividends of another Person
the payments of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its payment
or other obligations under this Preferred Securities Guarantee.
"Guarantor" means CB&T Holding Corporation, a Louisiana corporation, or any
permitted successors or assigns.
"Guarantee Payments" means the following payments or distributions, without
duplication, with respect to the Preferred Securities, to the extent not paid or
made by the Trust: (i) any accrued and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Preferred Securities, to
the extent the Trust shall have funds available therefor, (ii) the redemption
price, including all accrued and unpaid Distributions to the date of redemption
(the "Redemption Price"), to the extent the Trust has funds available therefor,
with respect to any Preferred Securities called for redemption by the Trust, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
the Trust (other than in connection with the distribution of Junior Subordinated
Debentures to the Holders in exchange for Preferred Securities as provided in
the Trust Agreement or a redemption of all of the Preferred Securities), the
lesser of (a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Preferred Securities to the date of payment, to the extent
the Trust shall have funds available therefor (the "Liquidation Distribution"),
and (b) the amount of assets of the Trust remaining available for distribution
to Holders in liquidation of the Trust.
"Holder" shall mean any holder, as registered on the books and records of
the Trust, of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
3
<PAGE>
"Indenture" means the Indenture dated as of _______ __, 1999, among the
Debenture Issuer and Wilmington Trust Company, as trustee, and any indenture
supplemental thereto pursuant to which certain subordinated debt securities of
the Debenture Issuer are to be issued to the Property Trustee of the Trust.
"Junior Subordinated Debentures" shall have the meaning set forth in the
Recitals hereto.
"Liquidation Distribution" has the meaning provided therefor in the
definition of Guarantee Payments.
"Majority in liquidation amount of the Preferred Securities" means, except
as provided in the terms of the Preferred Securities or, except as provided by
the Trust Indenture Act, a vote by Holder(s) of Preferred Securities, voting
separately as a class, of more than 50% of the liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to but excluding the date upon which the
voting percentages are determined) of all of the Outstanding Preferred
Securities.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by two authorized officers of such Person. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer upon which the statements contained in
the certificate are based in rendering the Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Other Debentures" means all junior subordinated debentures ranking pari
passu or junior to the Debentures (other than the Debentures) issued by the
Guarantor from time to time and sold to trusts established or to be established
by the Guarantor, in each case similar to the Trust to issue securities intended
to qualify for Tier I capital treatment.
"Other Guarantees" means all guarantees (other than the Preferred
Securities Guarantee), issued or to be issued by the Guarantor from time to time
with respect to preferred securities or
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preference stock issued to trusts (other than the Trust) established or to be
established by the Guarantor, in each case similar to the Trust.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Preferred Guarantee Trustee" means Wilmington Trust Company, until a
Successor Preferred Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Preferred Securities Guarantee and
thereafter means each such Successor Preferred Guarantee Trustee.
"Redemption Price" has the meaning provided therefor in the definition of
Guarantee Payments.
"Responsible Officer" means, with respect to the Preferred Guarantee
Trustee, any officer of the Preferred Guarantee Trustee, including any vice-
president, any assistant vice-president, any assistant secretary, any assistant
treasurer or other officer customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of that officers knowledge of and familiarity with the
particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing or any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Junior Subordinated Debentures or to other
Debt which is pari passu with, or subordinated to, the Junior Subordinated
Debentures; provided however, that Senior Debt shall not be deemed to include
(i) any Debt of the Guarantor which when incurred and without respect to any
election under Section 1111 (b) of the United States Bankruptcy Code of 1978, as
amended, was without recourse to the Guarantor, (ii) any Debt of the Guarantor
to any of its subsidiaries and (iii) Debt to any employee of the Guarantor.
"Successor Preferred Guarantee Trustee" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Preferred Securities Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Preferred Securities
Guarantee and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Preferred Securities
Guarantee limits, qualifies or conflicts with the duties imposed by Section 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of January 1 and June 30 of each year, and at such other times as
Preferred Guarantee Trustee may reasonably request in writing within 30 days
after the receipt by the Corporation of any such request; provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Preferred Guarantee Trustee by the Guarantor. The Preferred Guarantee
Trustee shall preserve the list of Holders and all information contained therein
in as current a form as is reasonably practicable, but may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its obligations under
Section 311(a) of the Trust Indenture Act (but excluding from the operation of
such Section a creditor relationship arising in the circumstances described in
Section 311(b) of the Trust Indenture Act) and under Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.
The Preferred Guarantee Trustee shall provide to the Holders of the
Preferred Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by, and otherwise
in compliance with, Section 313 of the Trust Indenture Act. The Preferred
Guarantee Trustee shall also comply with the requirements of Section 313(d) of
the Trust Indenture Act.
SECTION 2.4 PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.
The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance
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certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
Delivery of such reports, information and documents to the Preferred Guarantee
Trustee is for informational purposes only and the Preferred Guarantee Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained herein, including
the Guarantor's compliance with any of its covenants hereunder (as to which the
Preferred Guarantee Trustee is entitled to rely exclusively on Officer's
Certificates). The Guarantor also shall transmit to the Holders of the Preferred
Securities, in the manner and to the extent provided in Section 313(c) of the
Trust Indenture Act, such summaries of the foregoing documents, reports and
information as may be required by rules and regulations prescribed by the
Commission.
SECTION 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act that may be required by such
Section. Any certificate or opinion required to be given by an officer pursuant
to Section 314(c) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 2.6 EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation amount of Preferred Securities
may, by vote, on behalf of the Holders of all of the Preferred Securities, waive
any past Event of Default and its consequences. Upon such waiver, any such Event
of Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Preferred
Securities Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 EVENT OF DEFAULT; NOTICE.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of a default hereunder, transmit by mail to the Holders of the
Preferred Securities in the manner and to the extent provided in Section 313(c)
of the Trust Indenture Act notice of all defaults hereunder actually known to
the Preferred Guarantee Trustee, unless such defaults have been cured before the
giving of such notice; provided, that except in the case of payment defaults,
the Preferred Guarantee Trustee shall be protected in withholding such notice if
and so long as the Preferred Guarantee Trustee determines in accordance with
Section 315(b) of the Trust Indenture Act in good faith that the withholding of
such notice is in the interest of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have knowledge
of any Event of Default unless the Preferred Guarantee Trustee shall have
received written notice, or of which a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of the Trust Agreement shall
have obtained actual knowledge.
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SECTION 2.8 CONFLICTING INTERESTS.
The Trust Agreement and Indenture shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes of clause (i)
of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Preferred Securities Guarantee, and no implied covenants shall be read into
this Preferred Securities Guarantee against the Preferred Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6), the Preferred Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Preferred Securities Guarantee, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be construed
to relieve the Preferred Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
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(A) the duties and obligations of the Preferred Guarantee Trustee
shall be determined solely by the express provisions of this Preferred
Securities Guarantee, and the Preferred Guarantee Trustee shall not be
liable except for the performance of such duties and obligations as
are specifically set forth in this Preferred Securities Guarantee, and
no implied covenants or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of the
opinions expressed herein, upon any certificates or opinions furnished
to the Preferred Guarantee Trustee and conforming to the requirements
of this Preferred Securities Guarantee; but in the case of any such
certificates or opinions that by any provision hereof are required to
be furnished to the Preferred Guarantee Trustee, the Preferred
Guarantee Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Preferred
Guarantee Trustee, unless it shall be proved that the Preferred Guarantee
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Preferred Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the
Preferred Guarantee Trustee, or exercising any trust or power conferred
upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee; and
(iv) no provision of this Preferred Securities Guarantee shall require
the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
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SECTION 3.2 CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.
(a) Subject to the provisions of Section 3.1:
(i) the Preferred Guarantee Trustee may conclusively rely, and shall
be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Preferred Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor;
(iv) the Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or reregistration thereof);
(v) the Preferred Guarantee Trustee may consult with counsel of its
selection, and the advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction;
(vi) the Preferred Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Preferred
Securities Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Preferred Guarantee Trustee such security
and indemnity, reasonably satisfactory to the Preferred Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Preferred Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with
such request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Preferred Securities Guarantee;
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(vii) the Preferred Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Preferred Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Preferred Guarantee Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or by
or through agents, nominees, custodians or attorneys, and the Preferred
Guarantee Trustee shall not be responsible for any misconduct or negligence
on the part of any agent or attorney appointed with due care by it
hereunder;
(ix) any action taken by the Preferred Guarantee Trustee or its agents
hereunder shall bind the Holders of the Preferred Securities, and the
signature of the Preferred Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Preferred Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Guarantee Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request written instructions from the Holders of a Majority in liquidation
amount of the Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such written instructions
are received, and (iii) shall be protected in relying on or acting in
accordance with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be deemed to
impose any duty or obligation on the Preferred Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Preferred Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Preferred Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.
The Recitals contained in this Guarantee shall be taken as the statements
of the Guarantor, and the Preferred Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Guarantee Trustee makes no
representation as to the validity or sufficiency of this Preferred Securities
Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.
(a) There shall at all times be a Preferred Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
$50,000,000, and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1 (a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Preferred Guarantee Trustee shall cease to be
eligible to so act under Section 4.1 (a), the Preferred Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED GUARANTEE
TRUSTEES
(a) Subject to Section 4.2(c), the Preferred Guarantee Trustee may be
appointed or removed with or without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee may be removed for cause at any time by
Act (within the meaning of Section 608 of the Trust Agreement) of the Holders of
at least a Majority in liquidation amount of the Preferred Securities, delivered
to the Preferred Guarantee Trustee.
(c) The Preferred Guarantee Trustee shall not be removed in accordance with
Sections 4.2(a) and 4.2(b) until a Successor Preferred Guarantee Trustee has
been appointed and has accepted such appointment by written instrument executed
by such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
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(d) The Preferred Guarantee Trustee appointed to office shall hold office
until a Successor Preferred Guarantee Trustee shall have been appointed or until
its removal or resignation. The Preferred Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an instrument in
writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(e) If no Successor Preferred Guarantee Trustee shall have been appointed
and accepted appointment as provided in this Section 4.2 within 60 days after
delivery of an instrument of resignation, the resigning Preferred Guarantee
Trustee may petition any court of competent jurisdiction for appointment of a
Successor Preferred Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Preferred Guarantee Trustee.
(f) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(g) Upon termination of this Preferred Securities Guarantee or removal or
resignation of the Preferred Guarantee Trustee pursuant to this Section 4.2, the
Guarantor shall pay to the Preferred Guarantee Trustee all amounts accrued to
the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by the Trust), as and when due, regardless of any defense, right of set-off or
counterclaim that the Trust may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Trust to pay such
amounts to the Holders.
SECTION 5.2 WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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SECTION 5.3 OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Preferred Securities Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Trust;
(b) the extension of time for the payment by the Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Junior Subordinated Debentures);
(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Trust granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) any failure or omission to receive any regulatory approval or consent
required in connection with the Preferred Securities (or the common equity
securities issued by the Trust), including the failure to receive any regulatory
approval required in connection with the redemption of the Preferred Securities;
(g) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(h) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
consent of, the Guarantor with respect to the happening of any of the foregoing.
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SECTION 5.4 RIGHTS OF HOLDERS.
(a) The Guarantor expressly acknowledges that: (i) this Guarantee will be
deposited with the Preferred Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Preferred Guarantee Trustee has the right to enforce this
Preferred Securities Guarantee; and (iii) Holders of a Majority in liquidation
amount of the Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or
exercising any trust or power conferred upon the Preferred Guarantee Trustee
under this Preferred Securities Guarantee.
(b) Any Holder of Preferred Securities may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Preferred
Securities Guarantee, without first instituting a legal proceeding against the
Trust, the Preferred Guarantee Trustee or any other Person.
SECTION 5.5 GUARANTEE OF PAYMENT.
This Preferred Securities Guarantee creates a guarantee of payment and not
of collection. This Preferred Securities Guarantee will not be discharged except
by payment of the Guarantee Payments in full (without duplication of amounts
theretofore paid by the Trust).
SECTION 5.6 SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Preferred Securities against the Trust in respect of any amounts paid to such
Holders by the Guarantor under this Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Preferred Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 5.7 INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Trust with respect to the Preferred Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Preferred Securities Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (h), inclusive, of Section 5.3 hereof.
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 LIMITATION OF TRANSACTIONS.
So long as any Preferred Securities remain outstanding, if there shall have
occurred an Event of Default under this Preferred Securities Guarantee, an Event
of Default under the Trust Agreement or during an Extended Interest Payment
Period (as defined in the Indenture), then (a) the Guarantor shall not and shall
not permit any Subsidiary to declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock (other than (i)
the reclassification of any class of the Corporation's capital stock into
another class of capital stock, (ii) dividends or distributions payable in any
class of the Corporation's common stock, (iii) any declaration of a dividend in
connection with the implementation of a shareholder rights plan, or the issuance
of stock under any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto and (iv) purchases of the Corporation's common
stock related to the rights under any of the Corporation's benefit plans for its
or its subsidiaries' directors, officers or employees), and (b) the Guarantor
shall not and shall not permit any Subsidiary to make any payment of interest or
principal on or repay, repurchase or redeem any debt securities issued by the
Guarantor (including Other Debentures) which rank pari passu with or junior to
the Junior Subordinated Debentures; and (c) the Guarantor shall not redeem,
purchase or acquire less than all of the outstanding Debentures or any of the
Preferred Securities.
SECTION 6.2 RANKING.
This Preferred Securities Guarantee will constitute an unsecured obligation
of the Guarantor and will rank (i) subordinate and junior in right of payment to
all Senior Debt of the Guarantor, (ii) pari passu with the most senior preferred
securities or preference stock now or hereafter issued by the Guarantor and with
any guarantee now or hereafter entered into by the Guarantor in respect to any
preferred securities or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Guarantor's common stock.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION.
This Preferred Securities Guarantee shall terminate upon (i) full payment
of the Redemption Price of all Preferred Securities, (ii) upon full payment of
the amounts payable in accordance with the Trust Agreement upon liquidation of
the Trust, or (iii) upon distribution of the Junior Subordinated Debentures to
the Holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee shall continue to be effective or shall be
reinstated, as the case
16
<PAGE>
may be, if at any time any Holder of Preferred Securities must restore payment
of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Guarantor or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith in accordance with this Preferred Securities
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Preferred Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such acts
or omissions.
(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Guarantor and upon such information, opinions, reports
or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Preferred Securities might properly be paid.
SECTION 8.2 INDEMNIFICATION.
The Guarantor agrees to indemnify, to the fullest extent permitted by law,
each Indemnified Person for, and to hold each Indemnified Person harmless
against, any and all loss, liability or expense, including taxes (other than
taxes based on the income of the Guarantee Trustee) incurred without negligence
or bad faith on the part of such Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
in connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 8.2 shall
survive the termination of this Preferred Securities Guarantee. The provisions
of this Section shall survive the termination of the Preferred Securities
Guarantee.
17
<PAGE>
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Guarantor shall not assign its
obligations hereunder except in connection with a consolidation, merger, sale or
other transaction involving the Guarantor that is permitted under Article XII of
the Indenture and unless the assignee thereof agrees in writing, in form and
substance reasonably satisfactory to the Preferred Guaranty Trustee, to perform
all the Guarantor's obligations hereunder with the same effect as if it had been
named herein as Guarantor, and any purported assignment that is not in
accordance with these provisions shall be void.
SECTION 9.2 AMENDMENTS.
Except with respect to any changes that do not materially adversely affect
the rights of Holders (in which case no consent of Holders will be required),
this Preferred Securities Guarantee may only be amended with the prior approval
of the Holders of at least a Majority in liquidation amount of the Preferred
Securities. The provisions of Article VI of the Trust Agreement with respect to
meetings of Holders of the Preferred Securities apply to the giving of such
approval.
SECTION 9.3 NOTICES.
All notices provided for in this Preferred Securities Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first-class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred Guarantee
Trustee's mailing address set forth below (or such other address as the
Preferred Guarantee Trustee may give notice of to the Holders of the Preferred
Securities):
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
Attention: Corporate Trust Administration
(b) If given to the Guarantor, at the Guarantor's mailing address set forth
below (or such other address as the Guarantor may give notice of to the Holders
of the Preferred Securities):
18
<PAGE>
CB&T Holding Corporation
1100 Poydras Street, Suite 1100
New Orleans, Louisiana 70112
Facsimile No.: (504) 552-4454
Attention: Chief Executive Officer
(c) If given to any Holder of Preferred Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.4 BENEFIT.
This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.1 (a), is not
separately transferable from the Preferred Securities.
SECTION 9.5 GOVERNING LAW.
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD
TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
19
<PAGE>
This Preferred Securities Guarantee is executed as of the day and year
first above written.
CB&T HOLDING CORPORATION,
AS GUARANTOR
By: ____________________________________
Name: Gary N. Solomon
Title: Chief Executive Officer
WILMINGTON TRUST COMPANY,
AS PREFERRED GUARANTEE TRUSTEE
By: ____________________________________
Name: ____________________________________
Title: ____________________________________
20
<PAGE>
Exhibit 5.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone: (202) 347-0300
Facsimile: (202) 347-2172
WWW.EMTH.COM
TIMOTHY B. MATZ JEFFREY D. HAAS
STEPHEN M. EGE KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL
GERARD L. HAWKINS FIORELIO J. VICENCIO*
NORMAN B. ANTIN DAVID TEEPLES*
JOHN P. SOUKENIK* CRISTIN ZEISLER
GERALD F. HEUPEL, JR. ERIC M. MARION*
JEFFREY A. KOEPPEL DANIEL R. KLEINMAN*
DANIEL P. WEITZEL
PHILIP ROSS BEVAN
HUGH T. WILKINSON
September 3, 1999 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR
Board of Directors
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of up to $11,500,000 aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures (the "Junior Subordinated
Debentures") of CB&T Holding Corporation, a Louisiana corporation (the
"Corporation"), up to $11,500,000 aggregate liquidation amount of Cumulative
Trust Preferred Securities (the "Trust Preferred Securities") of Crescent
Capital Trust I, a business trust created under the laws of the State of
Delaware (the "Issuer"), and the Guarantee with respect to the Trust Preferred
Securities (the "Guarantee") to be executed and delivered by the Corporation for
the benefit of the holders from time to time of the Trust Preferred Securities,
we, as your counsel, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
<PAGE>
Board of Directors
September 3, 1999
Page 2
Upon the basis of such examination, we advise you that, when:
(1) the Registration Statement relating to the Junior Subordinated
Debentures, the Trust Preferred Securities and the Guarantee has become
effective under the Act;
(2) the Guarantee Agreement relating to the Guarantee with respect to the
Trust Preferred Securities of the Issuer has been duly executed and
delivered;
(3) the Junior Subordinated Debentures have been duly executed and
authenticated in accordance with the Indenture and issued and delivered as
contemplated in the Registration Statement; and
(4) the Trust Preferred Securities have been duly executed in accordance
with the Amended and Restated Trust Agreement of the Issuer and issued and
delivered as contemplated in the Registration Statement;
the Junior Subordinated Debentures and the Guarantee relating to the Trust
Preferred Securities of the Issuer will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
We understand that you have received an opinion regarding the Trust
Preferred Securities from Richards, Layton & Finger, P.A., special Delaware
counsel for the Corporation and the Issuer. We are expressing no opinion with
respect to the matters contained in such opinion.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation and other sources believed by us
to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Securities" in the Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P
By: /s/ Gerald F. Heupel, Jr.
---------------------------------
Gerald F. Heupel, Jr., a Partner
<PAGE>
EXHIBIT 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
September 3, 1999
Crescent Capital Trust I
c/o CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana
Re: Crescent Capital Trust I
------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for CB&T Holding
Corporation, a Louisiana corporation (the "Company"), and Crescent Capital Trust
I, a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August 30, 1999
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on August 30, 1999;
(b) The Trust Agreement of the Trust, dated as of August 30, 1999,
among the Company and the trustees of the Trust named therein;
(c) A form of Amended and Restated Trust Agreement of the Trust
(including Exhibits A, C and E, the "Trust Agreement"), to be entered into among
the Company, as depositor, the trustees of the Trust named therein, and the
holders, from time to time, of undivided beneficial interests in the assets of
the Trust, attached as an exhibit to the Registration Statement (as defined
below);
(d) The Registration Statement on Form S-1 (the "Registration
Statement"), including a prospectus (the "Prospectus"), relating to the trust
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust
<PAGE>
Crescent Capital Trust I
September 3, 1999
Page 2
(each, a "Preferred Security" and collectively, the "Preferred Securities"), as
proposed to be filed by the Company and the Trust with the Securities and
Exchange Commission on or about September 3, 1999; and
(e) A Certificate of Good Standing for the Trust, dated September 3,
1999, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are used as
defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (e) above. In particular,
we have not reviewed any document (other than the documents listed in paragraphs
(a) through (e) above) that is referred to in or incorporated by reference into
the documents reviewed by us. We have assumed that there exists no provision in
any document that we have not reviewed that is inconsistent with the opinions
stated herein. We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents, the statements
and information set forth therein and the additional matters recited or assumed
herein, all of which we have assumed to be true, complete and accurate in all
material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the Trust
(collectively, the "Preferred Security Holders") of a Preferred Securities
Certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Trust Agreement and the
Registration Statement, and (vii) that the Preferred Securities are issued and
sold to the Preferred Security Holders in accordance with the Trust Agreement
and the Registration Statement. We have not
<PAGE>
Crescent Capital Trust I
September 3, 1999
Page 3
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities will represent valid and, subject to the
qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s /Richards, Layton & Finger, P.A.
BJK/DJM
<PAGE>
Exhibit 8.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone: (202) 347-0300
Facsimile: (202) 347-2172
WWW.EMTH.COM
TIMOTHY B. MATZ JEFFREY D. HAAS
STEPHEN M. EGE KEVIN M. HOULIHAN
RAYMOND A. TIERNAN KENNETH B. TABACH
W. MICHAEL HERRICK PATRICIA J. WOHL
GERARD L. HAWKINS FIORELIO J. VICENCIO*
NORMAN B. ANTIN DAVID TEEPLES*
JOHN P. SOUKENIK* CRISTIN ZEISLER
GERALD F. HEUPEL, JR. ERIC M. MARION*
JEFFREY A. KOEPPEL DANIEL R. KLEINMAN*
DANIEL P. WEITZEL
PHILIP ROSS BEVAN
HUGH T. WILKINSON
September 3, 1999 OF COUNSEL
ALLIN P. BAXTER
JACK I. ELIAS
SHERYL JONES ALU
*NOT ADMITTED IN D.C. VIA EDGAR
Board of Directors
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
Re: Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as special federal tax counsel to Crescent Capital Trust I
(the "Issuer") and CB&T Holding Corporation (the "Corporation") in connection
with the issuance by the Issuer of up to $11,500,000 of its Cumulative Trust
Preferred Securities pursuant to the prospectus (the "Prospectus") contained in
the Registration Statement. For purposes of rendering this opinion, we have
assumed that each of the operative documents described in the Prospectus will be
duly executed and performed in accordance with the terms described therein, that
all of the facts contained in the Prospectus are true, correct and complete, and
that all of the factual representations to be made by the Corporation and the
Issuer in the underwriting agreement to be entered into with Ryan, Beck & Co.
are true, correct and complete. Based upon the foregoing, we hereby confirm to
you our opinion as set forth under the heading "Federal Income Tax Consequences"
in the Prospectus, subject to the limitations set forth therein.
<PAGE>
Board of Directors
September 3, 1999
Page 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Federal
Income Tax Consequences" in the Prospectus. In giving such consent, we do not
thereby admit that we are in the category of persons whose consent is required
under Section 7 of the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P
By: /s/ Gerald F. Heupel, Jr.
------------------------------
Gerald F. Heupel, Jr., a Partner
<PAGE>
Exhibit 10.1
1999
Crescent Bank & Trust
1999 Supplemental Executive Compensation Plan
In consideration of designing and implementing the Strategic Business Plan which
continues to enable the Bank to achieve superior results, as well as play a
vital part in the input of daily operations, the Board of Directors has adopted
the following supplemental compensation plan for the Chief Executive Officer of
the Bank, Gary N. Solomon.
- 20% of Net Income Before Income Taxes in excess of $500,000.
The bonus will be paid provided the Bank:
- has received a CAMEL rating no lower than "2" in its most recent
regulatory examination; and
- has not had a significant deterioration in asset quality since the
last regulatory examination; and
- is considered "adequately capitalized" under the FDIC's guidelines;
and
- exceed a 1.88% Return on Assets, on a pre-tax and pre-bonus accrual
basis. The ROA of the Bank's "peer group", as defined by the Bank's
regulators, has been 1.22% -1997, 1.23% -1996, 1.22% -1995 and 1.06% -
1994. 1.88% represents the pre-tax equivalent of our peer group for
1997.
- This bonus will be paid on a quarterly basis after submission of the
call report and verification of the ROA calculation; the Bank may
elect to pay the final bonus within 30 days of receipt of the audit
report from the outside accounting firm.
Approval of the Board will be obtained prior to each bonus payment.
The plan will be reviewed and approved annually by the Board of Directors.
*Bonus payments under the plan will not exceed $1.250MM.
Approved by Board of Directors
/s/ Ronald Briggs 12/16/98
- ---------------------------------- --------------------------
Ronald Briggs Date
Acting Secretary
<PAGE>
Exhibit 10.2
Crescent
Bank and Trust
Consulting Agreement
--------------------
This consulting agreement is between Crescent Bank and Trust and Henry M.
Wallis. The term of this agreement is January 1, 1998 to December 31, 2008.
Mr. Wallis in signing this agreement agrees to a non-compete clause with regard
to automobile sub-prime lending until this agreement has expired. For services
listed below Mr. Wallis will be compensated $3,000 per month in salary plus
Family Major Medical Coverage:
1. Mr. Wallis will be available via the telephone for all Crescent Bank &
Trust management, lenders and collection personnel for consultation
purposes on any lending or collection matters.
2. Mr. Wallis will be available to monitor all information concerning the
potential purchase of loan packages.
In addition, Mr. Wallis will be available to Crescent Bank & Trust at a rate of
$50.00 per hour (not to exceed 400 hours annually) to perform the following:
a.) loan package due diligence
b.) loan quality control
c.) branch marketing surveys
or
d.) any other area management feels he can be of benefit
/s/ Gary N. Solomon 12/28/97
- ---------------------------- ---------------------------------
Gary N. Solomon Date
CEO - Crescent Bank & Trust
/s/ Henry M. Wallis 12/28/97
- ---------------------------- ---------------------------------
Henry M. Wallis Date
Approved by:
Board of Directors
Crescent Bank & Trust
/s/ Martha N. Solomon 12/28/97
- ---------------------------- ---------------------------------
Martha N. Solomon Date
Secretary
<PAGE>
Exhibit 10.3
1999
1999 Consulting Agreement
Daniel Buckman
Mr. Daniel Buckman (a Director of Crescent Bank & Trust) of International Trade
Consultants, Inc. will provide consulting services to the Bank during the year
on an as needed basis in the following areas:
1. Product development in the consumer loan area.
2. General bank marketing.
3. Special consultations with the Chairman on general banking issues.
4. Consultations on specific loan approvals.
A $500.00 per month consulting fee will be paid to "International Trade
Consultants, Inc." for these services:
The fee will be mailed to following address:
International Trade Consultants, Inc.
1430 Jackson Avenue
Suite O
New Orleans, LA 70130
This agreement will be submitted for review and approval by the Board of
Directors annually.
Approved by Board of Directors
/s/ Martha N. Solomon 12/16/98
- ---------------------------- ---------------------------------
Martha N. Solomon Date
Secretary
<PAGE>
Exhibit 12.1
CB&T HOLDING CORPORATION
SCHEDULE OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Six Months Ended
June 30, Year Ended December 31,
------------------ -----------------------------------------------
1999 1998 1998 1997 1996 1995 1994
------- -------- ------- ------- ------- ------- -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings $ 3,041 $ 3,716 $ 6,560 $ 4,827 $ 4,461 $3,680 $2,671
Total interest expense 6,999 6,578 13,722 10,481 7,869 5,068 2,245
------- -------- ------- ------- ------- ------- -------
Total 10,040 10,294 20,282 15,308 12,330 8,748 4,916
Ratio of earnings to fixed
charges 1.43x 1.56x 1.48x 1.46x 1.57x 1.73x 2.19x
======= ======== ======= ======= ======= ======= =======
Earnings 3,041 3,716 6,560 4,827 4,461 3,680 2,671
Total interest expense, net of
deposits 367 412 811 228 173 46 0
------- -------- ------- ------- ------- ------- -------
Total 3,408 4,128 7,371 5,055 4,634 3,726 2,671
Ratio of earnings to fixed
charges, net of deposits 9.29x 10.02x 9.09x 22.17x 26.79x 81.00x 0.00x
======= ======== ======= ======= ======= ======= =======
PRO FORMA
Earnings $ 3,168 $ 6,883
Total interest expense 6,872 13,399
------- -------
Total 10,040 20,282
Ratio of earnings to fixed
charges 1.46x 1.51x
======= =======
Earnings 3,168 6,883
Total interest expense, net of
deposits 240 488
------- -------
Total 3,408 7,371
Ratio of earnings to fixed
charges, net of deposits 14.20x 15.10x
======= =======
</TABLE>
<PAGE>
Exhibit 21.1
SUBSIDIARIES OF THE CORPORATION
The only subsidiary of CB&T Holding Corporation is Crescent Bank & Trust
Company. Crescent Bank is a Louisiana-chartered commercial bank formed in 1991.
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 4, 1999, accompanying the consolidated
financial statements of CB&T Holding Corporation contained in the Registration
Statement and Prospectus. We consent to the use of the aforementioned report in
the Registration Statement and Prospectus, and to the use of our name as it
appears under the caption "Experts."
/s/ GRANT THORNTON LLP
Dallas, Texas
September 2, 1999
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We hereby consent to the use of our report dated January 30, 1998 (except for
note H, as to which the date is March 11, 1998) on the consolidated financial
statements of CB&T Holding Corporation as of December 31, 1997 and for the years
ended December 31, 1997 and 1996. We also consent to the reference to us under
the heading "Experts" in the prospectus contained in the Form S-1 registration
statement being filed by CB&T Holding Corporation and Crescent Capital Trust 1.
/s/ Roth Murphy Sanford L.L.P.
New Orleans, Louisiana
September 2, 1999
<PAGE>
EXHIBIT 25.1 Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
----
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CB&T HOLDING CORPORATION
(Exact name of obligor as specified in its charter)
Louisiana 72-1284224
(State of incorporation) (I.R.S. employer identification no.)
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 31st day
of August, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s /Patricia A. Evans By: /s /Norma P. Closs
--------------------------- ----------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of the United
States or of this
<PAGE>
State, to discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any
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bond, recognizance, obligation, judgment, suit, order, or decree to be
entered in any court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by any law,
judge, officer or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations,
contracts and evidences of indebtedness, of any private, public or
municipal corporation within and without the State of Delaware, or of
the Government of the United States, or of any state, territory,
colony, or possession thereof, or of any foreign government or
country; to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held and owned
by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all
the rights, powers and privileges of individual owners thereof,
including the right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any
part of the property held or owned by the Corporation, and to sell and
pledge such bonds, as and when the Board of Directors shall determine,
and in the promotion of its said corporate business of investment and
to the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge,
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mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
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Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
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<PAGE>
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of
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any increase of the authorized capital stock of the Corporation of any
class or series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to purchase stock
of any class or series, but any such unissued stock, additional authorized
issue of shares of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations, whether
such holders or others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number
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of directors constituting the whole Board shall be twenty-four until
otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
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(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside
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of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
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(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
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(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
-12-
<PAGE>
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
-13-
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
2
<PAGE>
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions
3
<PAGE>
of any such implementary Resolutions shall be suspended during such a disaster
period until it shall be determined by any interim Executive Committee acting
under this section that it shall be to the advantage of the Company to resume
the conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
4
<PAGE>
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
5
<PAGE>
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
6
<PAGE>
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company
7
<PAGE>
by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate or certificates
shall be issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of Directors
or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian,
8
<PAGE>
trustee, agent or in any other fiduciary or representative capacity by any and
every method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors or
the Executive Committee, and any and all such instruments shall have the same
force and validity as though expressly authorized by the Board of Directors
and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
9
<PAGE>
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: August 31, 1999 By: /s /Norma P. Closs
-----------------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- --------------------------------------------- ----------------------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins................. 207,947
Interest-bearing balances........................................... 0
Held-to-maturity securities.............................................. 37,680
Available-for-sale securities............................................ 1,598,933
Federal funds sold and securities purchased under agreements to resell... 180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income............4,237,557
LESS: Allowance for loan and lease losses.............70,233
LESS: Allocated transfer risk reserve......................0
Loans and leases, net of unearned income, allowance, and reserve.... 4,167,324
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 141,415
Other real estate owned.................................................. 922
Investments in unconsolidated subsidiaries and associated companies...... 1,227
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 5,179
Other assets............................................................. 104,101
Total assets............................................................. 6,445,094
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices.......................................................... 4,574,509
Noninterest-bearing................................... 992,436
Interest-bearing.................................... 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase... 344,719
Demand notes issued to the U.S. Treasury..................................... 83,802
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:........................................................ ///////
With original maturity of one year or less.............................. 860,000
With original maturity of more than one year............................ 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)....................................... 80,279
Total liabilities............................................................ 5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock................................................................. 500
Surplus (exclude all surplus related to preferred stock)..................... 62,118
Undivided profits and capital reserves....................................... 412,409
Net unrealized holding gains (losses) on available-for-sale securities....... (16,242)
Total equity capital......................................................... 458,785
Total liabilities, limited-life preferred stock, and equity capital.......... 6,445,094
</TABLE>
2
<PAGE>
EXHIBIT 25.2 Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
----
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CB&T HOLDING CORPORATION
CRESCENT CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Louisiana 72-1284224
Delaware To be applied for
(State of incorporation) (I.R.S. employer identification no.)
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
Trust Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 31st day
of August, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s /Patricia A. Evans By: /s /Norma P. Closs
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Assistant Secretary Name: Norma P. Closs
Title: Vice President
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EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
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AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of the United
States or of this
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State, to discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any
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bond, recognizance, obligation, judgment, suit, order, or decree to be
entered in any court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by any law,
judge, officer or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations,
contracts and evidences of indebtedness, of any private, public or
municipal corporation within and without the State of Delaware, or of
the Government of the United States, or of any state, territory,
colony, or possession thereof, or of any foreign government or
country; to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held and owned
by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all
the rights, powers and privileges of individual owners thereof,
including the right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any
part of the property held or owned by the Corporation, and to sell and
pledge such bonds, as and when the Board of Directors shall determine,
and in the promotion of its said corporate business of investment and
to the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge,
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mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
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Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
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(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of
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any increase of the authorized capital stock of the Corporation of any
class or series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to purchase stock
of any class or series, but any such unissued stock, additional authorized
issue of shares of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations, whether
such holders or others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number
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of directors constituting the whole Board shall be twenty-four until
otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
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(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside
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of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
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(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
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(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
-12-
<PAGE>
Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
-13-
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
2
<PAGE>
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions
3
<PAGE>
of any such implementary Resolutions shall be suspended during such a disaster
period until it shall be determined by any interim Executive Committee acting
under this section that it shall be to the advantage of the Company to resume
the conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
4
<PAGE>
(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
5
<PAGE>
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
6
<PAGE>
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company
7
<PAGE>
by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate or certificates
shall be issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of Directors
or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian,
8
<PAGE>
trustee, agent or in any other fiduciary or representative capacity by any and
every method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors or
the Executive Committee, and any and all such instruments shall have the same
force and validity as though expressly authorized by the Board of Directors
and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
9
<PAGE>
(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
10
<PAGE>
EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: August 31, 1999 By: /s /Norma P. Closs
-----------------------------------
Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- --------------------------------------------- ----------------------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins................. 207,947
Interest-bearing balances........................................... 0
Held-to-maturity securities.............................................. 37,680
Available-for-sale securities............................................ 1,598,933
Federal funds sold and securities purchased under agreements to resell... 180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income............4,237,557
LESS: Allowance for loan and lease losses.............70,233
LESS: Allocated transfer risk reserve......................0
Loans and leases, net of unearned income, allowance, and reserve.... 4,167,324
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 141,415
Other real estate owned.................................................. 922
Investments in unconsolidated subsidiaries and associated companies...... 1,227
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 5,179
Other assets............................................................. 104,101
Total assets............................................................. 6,445,094
</TABLE>
CONTINUED ON NEXT PAGE
<PAGE>
<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices.......................................................... 4,574,509
Noninterest-bearing................................... 992,436
Interest-bearing.................................... 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase... 344,719
Demand notes issued to the U.S. Treasury..................................... 83,802
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:........................................................ ///////
With original maturity of one year or less.............................. 860,000
With original maturity of more than one year............................ 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)....................................... 80,279
Total liabilities............................................................ 5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock................................................................. 500
Surplus (exclude all surplus related to preferred stock)..................... 62,118
Undivided profits and capital reserves....................................... 412,409
Net unrealized holding gains (losses) on available-for-sale securities....... (16,242)
Total equity capital......................................................... 458,785
Total liabilities, limited-life preferred stock, and equity capital.......... 6,445,094
</TABLE>
2
<PAGE>
EXHIBIT 25.3 Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) X
-----
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
CB&T HOLDING CORPORATION
(Exact name of obligor as specified in its charter)
Louisiana 72-1284224
(State of incorporation) (I.R.S. employer identification no.)
CB&T Holding Corporation
1100 Poydras Street, Suite 100
New Orleans, Louisiana 70112
(Address of principal executive offices) (Zip Code)
CB&T Holding Corporation Guarantee with respect to the Trust Preferred
Securities of Crescent Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes the
certificate of authority of Wilmington Trust Company to commence
business and the authorization of Wilmington Trust Company to
exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b) of
Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 31st day
of August, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s /Patricia A. Evans By: /s /Norma P. Closs
------------------------------------ -----------------------------
Assistant Secretary Name: Norma P. Closs
Title: Vice President
<PAGE>
EXHIBIT A
AMENDED CHARTER
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON MAY 9, 1987
<PAGE>
AMENDED CHARTER
OR
ACT OF INCORPORATION
OF
WILMINGTON TRUST COMPANY
Wilmington Trust Company, originally incorporated by an Act of the General
Assembly of the State of Delaware, entitled "An Act to Incorporate the Delaware
Guarantee and Trust Company", approved March 2, A.D. 1901, and the name of which
company was changed to "Wilmington Trust Company" by an amendment filed in the
Office of the Secretary of State on March 18, A.D. 1903, and the Charter or Act
of Incorporation of which company has been from time to time amended and changed
by merger agreements pursuant to the corporation law for state banks and trust
companies of the State of Delaware, does hereby alter and amend its Charter or
Act of Incorporation so that the same as so altered and amended shall in its
entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of Delaware is
at Rodney Square North, in the City of Wilmington, County of New Castle;
the name of its resident agent is Wilmington Trust Company whose address is
Rodney Square North, in said City. In addition to such principal office,
the said corporation maintains and operates branch offices in the City of
Newark, New Castle County, Delaware, the Town of Newport, New Castle
County, Delaware, at Claymont, New Castle County, Delaware, at Greenville,
New Castle County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate branch
offices at Ninth and Shipley Streets, 418 Delaware Avenue, 2120 Market
Street, and 3605 Market Street, all in the City of Wilmington, New Castle
County, Delaware, and such other branch offices or places of business as
may be authorized from time to time by the agency or agencies of the
government of the State of Delaware empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this Corporation are
to do any or all of the things herein mentioned as fully and to the same
extent as natural persons might or could do and in any part of the world,
viz.:
(1) To sue and be sued, complain and defend in any Court of law or
equity and to make and use a common seal, and alter the seal at
pleasure, to hold, purchase, convey, mortgage or otherwise deal in
real and personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require, to make
by-laws not inconsistent with the Constitution or laws of the United
States or of this
<PAGE>
State, to discount bills, notes or other evidences of debt, to receive
deposits of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of exchange, and
generally to use, exercise and enjoy all the powers, rights,
privileges and franchises incident to a corporation which are proper
or necessary for the transaction of the business of the Corporation
hereby created.
(2) To insure titles to real and personal property, or any estate or
interests therein, and to guarantee the holder of such property, real
or personal, against any claim or claims, adverse to his interest
therein, and to prepare and give certificates of title for any lands
or premises in the State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the receipt,
collection, custody, investment and management of funds, and the
purchase, sale, management and disposal of property of all
descriptions, and to prepare and execute all papers which may be
necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds, leases,
conveyances, mortgages, bonds and legal papers of every description,
and to carry on the business of conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry, plate,
deeds, bonds and any and all other personal property of every sort and
kind, from executors, administrators, guardians, public officers,
courts, receivers, assignees, trustees, and from all fiduciaries, and
from all other persons and individuals, and from all corporations
whether state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of registering,
issuing, certificating, countersigning, transferring or underwriting
the stock, bonds or other obligations of any corporation, association,
state or municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two parties,
and in like manner may act as Treasurer of any corporation or
municipality.
(7) To act as Trustee under any deed of trust, mortgage, bond or
other instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in conjunction
with any other person or persons, corporation or corporations.
(8) To guarantee the validity, performance or effect of any contract
or agreement, and the fidelity of persons holding places of
responsibility or trust; to become surety for any person, or persons,
for the faithful performance of any trust, office, duty, contract or
agreement, either by itself or in conjunction with any other person,
or persons, corporation, or corporations, or in like manner become
surety upon any
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bond, recognizance, obligation, judgment, suit, order, or decree to be
entered in any court of record within the State of Delaware or
elsewhere, or which may now or hereafter be required by any law,
judge, officer or court in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as trustee, trustee
in bankruptcy, receiver, assignee, assignee in bankruptcy, executor,
administrator, guardian, bailee, or in any other trust capacity in the
receiving, holding, managing, and disposing of any and all estates and
property, real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee in
bankruptcy, executor, administrator, guardian or bailee by any
persons, corporations, court, officer, or authority, in the State of
Delaware or elsewhere; and whenever this Corporation is so appointed
by any person, corporation, court, officer or authority such trustee,
trustee in bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other trust
capacity, it shall not be required to give bond with surety, but its
capital stock shall be taken and held as security for the performance
of the duties devolving upon it by such appointment.
(10) And for its care, management and trouble, and the exercise of
any of its powers hereby given, or for the performance of any of the
duties which it may undertake or be called upon to perform, or for the
assumption of any responsibility the said Corporation may be entitled
to receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages, debentures,
shares of capital stock, and other securities, obligations,
contracts and evidences of indebtedness, of any private, public or
municipal corporation within and without the State of Delaware, or of
the Government of the United States, or of any state, territory,
colony, or possession thereof, or of any foreign government or
country; to receive, collect, receipt for, and dispose of interest,
dividends and income upon and from any of the bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property held and owned
by it, and to exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities, obligations,
contracts, evidences of indebtedness and other property, any and all
the rights, powers and privileges of individual owners thereof,
including the right to vote thereon; to invest and deal in and with
any of the moneys of the Corporation upon such securities and in such
manner as it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the same by
pledges or deeds of trust or mortgages of or upon the whole or any
part of the property held or owned by the Corporation, and to sell and
pledge such bonds, as and when the Board of Directors shall determine,
and in the promotion of its said corporate business of investment and
to the extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge,
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mortgage and convey real and personal property of any name and nature
and any estate or interest therein.
(b) In furtherance of, and not in limitation, of the powers conferred by
the laws of the State of Delaware, it is hereby expressly provided that the
said Corporation shall also have the following powers:
(1) To do any or all of the things herein set forth, to the same
extent as natural persons might or could do, and in any part of the
world.
(2) To acquire the good will, rights, property and franchises and to
undertake the whole or any part of the assets and liabilities of any
person, firm, association or corporation, and to pay for the same in
cash, stock of this Corporation, bonds or otherwise; to hold or in any
manner to dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any part of
any business so acquired, and to exercise all the powers necessary or
convenient in and about the conduct and management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien, and to
lease, sell, exchange, transfer, or in any manner whatever dispose of
property, real, personal or mixed, wherever situated.
(4) To enter into, make, perform and carry out contracts of every
kind with any person, firm, association or corporation, and, without
limit as to amount, to draw, make, accept, endorse, discount, execute
and issue promissory notes, drafts, bills of exchange, warrants,
bonds, debentures, and other negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of its
operations and businesses, without restriction to the same extent as
natural persons might or could do, to purchase or otherwise acquire,
to hold, own, to mortgage, sell, convey or otherwise dispose of, real
and personal property, of every class and description, in any State,
District, Territory or Colony of the United States, and in any foreign
country or place.
(6) It is the intention that the objects, purposes and powers
specified and clauses contained in this paragraph shall (except where
otherwise expressed in said paragraph) be nowise limited or restricted
by reference to or inference from the terms of any other clause of
this or any other paragraph in this charter, but that the objects,
purposes and powers specified in each of the clauses of this paragraph
shall be regarded as independent objects, purposes and powers.
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Fourth: - (a) The total number of shares of all classes of stock which the
Corporation shall have authority to issue is forty-one million (41,000,000)
shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par value
$10.00 per share (hereinafter referred to as "Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par value
$1.00 per share (hereinafter referred to as "Common Stock").
(b) Shares of Preferred Stock may be issued from time to time in one or
more series as may from time to time be determined by the Board of
Directors each of said series to be distinctly designated. All shares of
any one series of Preferred Stock shall be alike in every particular,
except that there may be different dates from which dividends, if any,
thereon shall be cumulative, if made cumulative. The voting powers and the
preferences and relative, participating, optional and other special rights
of each such series, and the qualifications, limitations or restrictions
thereof, if any, may differ from those of any and all other series at any
time outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of a particular
series of Preferred Stock, the voting powers and the designations,
preferences and relative, optional and other special rights, and the
qualifications, limitations and restrictions of such series, including, but
without limiting the generality of the foregoing, the following:
(1) The distinctive designation of, and the number of shares of
Preferred Stock which shall constitute such series, which number may
be increased (except where otherwise provided by the Board of
Directors) or decreased (but not below the number of shares thereof
then outstanding) from time to time by like action of the Board of
Directors;
(2) The rate and times at which, and the terms and conditions on
which, dividends, if any, on Preferred Stock of such series shall be
paid, the extent of the preference or relation, if any, of such
dividends to the dividends payable on any other class or classes, or
series of the same or other class of stock and whether such dividends
shall be cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of such
series to convert the same into or exchange the same for, shares of
any other class or classes or of any series of the same or any other
class or classes of stock of the Corporation and the terms and
conditions of such conversion or exchange;
(4) Whether or not Preferred Stock of such series shall be subject to
redemption, and the redemption price or prices and the time or times
at which, and the terms and conditions on which, Preferred Stock of
such series may be redeemed.
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<PAGE>
(5) The rights, if any, of the holders of Preferred Stock of such
series upon the voluntary or involuntary liquidation, merger,
consolidation, distribution or sale of assets, dissolution or winding-
up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase account,
if any, to be provided for the Preferred Stock of such series; and
(7) The voting powers, if any, of the holders of such series of
Preferred Stock which may, without limiting the generality of the
foregoing include the right, voting as a series or by itself or
together with other series of Preferred Stock or all series of
Preferred Stock as a class, to elect one or more directors of the
Corporation if there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of Directors may
determine.
(c) (1) After the requirements with respect to preferential dividends on
the Preferred Stock (fixed in accordance with the provisions of section (b)
of this Article Fourth), if any, shall have been met and after the
Corporation shall have complied with all the requirements, if any, with
respect to the setting aside of sums as sinking funds or redemption or
purchase accounts (fixed in accordance with the provisions of section (b)
of this Article Fourth), and subject further to any conditions which may be
fixed in accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to time by
the Board of Directors.
(2) After distribution in full of the preferential amount, if any,
(fixed in accordance with the provisions of section (b) of this
Article Fourth), to be distributed to the holders of Preferred Stock
in the event of voluntary or involuntary liquidation, distribution or
sale of assets, dissolution or winding-up, of the Corporation, the
holders of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and intangible, of
whatever kind available for distribution to stockholders ratably in
proportion to the number of shares of Common Stock held by them
respectively.
(3) Except as may otherwise be required by law or by the provisions
of such resolution or resolutions as may be adopted by the Board of
Directors pursuant to section (b) of this Article Fourth, each holder
of Common Stock shall have one vote in respect of each share of Common
Stock held on all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock or of
options, warrants or other rights to purchase shares of any class or series
of stock or of other securities of the Corporation shall have any
preemptive right to purchase or subscribe for any unissued stock of any
class or series or any additional shares of any class or series to be
issued by reason of
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<PAGE>
any increase of the authorized capital stock of the Corporation of any
class or series, or bonds, certificates of indebtedness, debentures or
other securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to purchase stock
of any class or series, but any such unissued stock, additional authorized
issue of shares of any class or series of stock or securities convertible
into or exchangeable for stock, or carrying any right to purchase stock,
may be issued and disposed of pursuant to resolution of the Board of
Directors to such persons, firms, corporations or associations, whether
such holders or others, and upon such terms as may be deemed advisable by
the Board of Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and rights
of each other series of Preferred Stock shall, in each case, be as fixed
from time to time by the Board of Directors in the resolution or
resolutions adopted pursuant to authority granted in section (b) of this
Article Fourth and the consent, by class or series vote or otherwise, of
the holders of such of the series of Preferred Stock as are from time to
time outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the powers,
preferences and rights of such other series shall be fixed by the Board of
Directors as senior to, or on a parity with, the powers, preferences and
rights of such outstanding series, or any of them; provided, however, that
the Board of Directors may provide in the resolution or resolutions as to
any series of Preferred Stock adopted pursuant to section (b) of this
Article Fourth that the consent of the holders of a majority (or such
greater proportion as shall be therein fixed) of the outstanding shares of
such series voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series of
Preferred Stock may be issued from time to time as the Board of Directors
of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and for such
consideration as shall be fixed by the Board of Directors.
(h) The authorized amount of shares of Common Stock and of Preferred Stock
may, without a class or series vote, be increased or decreased from time to
time by the affirmative vote of the holders of a majority of the stock of
the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of directors
constituting the entire Board shall be not less than five nor more than
twenty-five as fixed from time to time by vote of a majority of the whole
Board, provided, however, that the number of directors shall not be reduced
so as to shorten the term of any director at the time in office, and
provided further, that the number
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<PAGE>
of directors constituting the whole Board shall be twenty-four until
otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as nearly
equal in number as the then total number of directors constituting the
whole Board permits, with the term of office of one class expiring each
year. At the annual meeting of stockholders in 1982, directors of the
first class shall be elected to hold office for a term expiring at the next
succeeding annual meeting, directors of the second class shall be elected
to hold office for a term expiring at the second succeeding annual meeting
and directors of the third class shall be elected to hold office for a term
expiring at the third succeeding annual meeting. Any vacancies in the
Board of Directors for any reason, and any newly created directorships
resulting from any increase in the directors, may be filled by the Board of
Directors, acting by a majority of the directors then in office, although
less than a quorum, and any directors so chosen shall hold office until the
next annual election of directors. At such election, the stockholders
shall elect a successor to such director to hold office until the next
election of the class for which such director shall have been chosen and
until his successor shall be elected and qualified. No decrease in the
number of directors shall shorten the term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding the
fact that some lesser percentage may be specified by law, this Charter or
Act of Incorporation or the By-Laws of the Corporation), any director or
the entire Board of Directors of the Corporation may be removed at any time
without cause, but only by the affirmative vote of the holders of two-
thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) cast at a meeting of the
stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the Board of
Directors or by any stockholder entitled to vote for the election of
directors. Such nominations shall be made by notice in writing, delivered
or mailed by first class United States mail, postage prepaid, to the
Secretary of the Corporation not less than 14 days nor more than 50 days
prior to any meeting of the stockholders called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to stockholders, such written notice shall be delivered or
mailed, as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of the
meeting was mailed to stockholders. Notice of nominations which are
proposed by the Board of Directors shall be given by the Chairman on behalf
of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed
in such notice, (ii) the principal occupation or employment of such nominee
and (iii) the number of shares of stock of the Corporation which are
beneficially owned by each such nominee.
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<PAGE>
(f) The Chairman of the meeting may, if the facts warrant, determine and
declare to the meeting that a nomination was not made in accordance with
the foregoing procedure, and if he should so determine, he shall so declare
to the meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any annual or
special meeting of stockholders of the Corporation may be taken without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
Sixth: - The Directors shall choose such officers, agents and servants as
may be provided in the By-Laws as they may from time to time find necessary
or proper.
Seventh: - The Corporation hereby created is hereby given the same powers,
rights and privileges as may be conferred upon corporations organized under
the Act entitled "An Act Providing a General Corporation Law", approved
March 10, 1899, as from time to time amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority of the
whole Board, may designate any of their number to constitute an Executive
Committee, which Committee, to the extent provided in said resolution, or
in the By-Laws of the Company, shall have and may exercise all of the
powers of the Board of Directors in the management of the business and
affairs of the Corporation, and shall have power to authorize the seal of
the Corporation to be affixed to all papers which may require it.
Eleventh: - The private property of the stockholders shall not be liable
for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation by a
vote of the majority of the entire Board. The stockholders may make, alter
or repeal any By-Law whether or not adopted by them, provided however, that
any such additional By-Laws, alterations or repeal may be adopted only by
the affirmative vote of the holders of two-thirds or more of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class).
Fourteenth: - Meetings of the Directors may be held outside
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of the State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be from time
to time designated by them.
Fifteenth: - (a) (1) In addition to any affirmative vote required by law,
and except as otherwise expressly provided in sections (b) and (c) of this
Article Fifteenth:
(A) any merger or consolidation of the Corporation or any Subsidiary
(as hereinafter defined) with or into (i) any Interested Stockholder
(as hereinafter defined) or (ii) any other corporation (whether or not
itself an Interested Stockholder), which, after such merger or
consolidation, would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of related transactions)
to or with any Interested Stockholder or any Affiliate of any
Interested Stockholder of any assets of the Corporation or any
Subsidiary having an aggregate fair market value of $1,000,000 or
more, or
(C) the issuance or transfer by the Corporation or any Subsidiary (in
one transaction or a series of related transactions) of any securities
of the Corporation or any Subsidiary to any Interested Stockholder or
any Affiliate of any Interested Stockholder in exchange for cash,
securities or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation, or
(E) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries or any
similar transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding
shares of any class of equity or convertible securities of the
Corporation or any Subsidiary which is directly or indirectly owned by
any Interested Stockholder, or any Affiliate of any Interested
Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares"). Such affirmative vote shall
be required notwithstanding the fact that no vote may be required, or that some
lesser percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
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(2) The term "business combination" as used in this Article
Fifteenth shall mean any transaction which is referred to in any
one or more of clauses (A) through (E) of paragraph 1 of the
section (a).
(b) The provisions of section (a) of this Article Fifteenth shall not
be applicable to any particular business combination and such business
combination shall require only such affirmative vote as is required by
law and any other provisions of the Charter or Act of Incorporation or
By-Laws if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual, firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any Subsidiary) who
or which as of the record date for the determination of stockholders
entitled to notice of and to vote on such business combination, or
immediately prior to the consummation of any such transaction:
(A) is the beneficial owner, directly or indirectly, of more than 10%
of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time within two
years prior thereto was the beneficial owner, directly or indirectly,
of not less than 10% of the then outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any share of
capital stock of the Corporation which were at any time within two
years prior thereto beneficially owned by any Interested Stockholder,
and such assignment or succession shall have occurred in the course of
a transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and Associates (as
hereafter defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates has (i)
the right to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (ii)
the right to vote pursuant to any agreement, arrangement or
understanding, or
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(C) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of its
Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of capital stock of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any other
Voting Shares which may be issuable pursuant to any agreement, or upon
exercise of conversion rights, warrants or options or otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings given
those terms in Rule 12b-2 of the General Rules and Regulations under the
Securities Exchange Act of 1934, as in effect on December 31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of any
class of equity security (as defined in Rule 3a11-1 of the General Rules
and Regulations under the Securities Exchange Act of 1934, as in effect on
December 31, 1981) is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of Investment
Stockholder set forth in paragraph (2) of this section (c), the term
"Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned, directly or indirectly, by the
Corporation.
(d) majority of the directors shall have the power and duty to
determine for the purposes of this Article Fifteenth on the basis of
information known to them, (1) the number of Voting Shares
beneficially owned by any person (2) whether a person is an Affiliate
or Associate of another, (3) whether a person has an agreement,
arrangement or understanding with another as to the matters referred
to in paragraph (3) of section (c), or (4) whether the assets subject
to any business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or any
Subsidiary has an aggregate fair market value of $1,000,000 or more.
(e) Nothing contained in this Article Fifteenth shall be construed to
relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and in addition to any
other vote that may be required by law, this Charter or Act of
Incorporation by the By-Laws), the affirmative vote of the holders of at
least two-thirds of the outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class) shall be required to amend,
alter or repeal any provision of Articles Fifth, Thirteenth, Fifteenth or
Sixteenth of this Charter or Act of Incorporation.
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Seventeenth: (a) a Director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a Director, except to the extent such exemption from
liability or limitation thereof is not permitted under the Delaware General
Corporation Laws as the same exists or may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a Director of the
Corporation existing hereunder with respect to any act or omission
occurring prior to the time of such repeal or modification."
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EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
AS EXISTING ON JANUARY 16, 1997
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BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the third
Thursday in April each year at the principal office at the Company or at such
other date, time, or place as may be designated by resolution by the Board of
Directors.
Section 2. Special meetings of all stockholders may be called at any time
by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given by
mailing to each stockholder at least ten (10) days before said meeting, at his
last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the Company
issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each share of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors shall
be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72) years
shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for three
years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed and
conducted by the Board of Directors.
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Section 5. The Board of Directors shall meet at the principal office of
the Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called at any
time by the Chairman of the Board of Directors or by the President, and shall be
called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall be
necessary to constitute a quorum for the transaction of business at any meeting
of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of any
special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal, inability to
act, or disqualification of any director, the Board of Directors, although less
than a quorum, shall have the right to elect the successor who shall hold office
for the remainder of the full term of the class of directors in which the
vacancy occurred, and until such director's successor shall have been duly
elected and qualified.
Section 10. The Board of Directors at its first meeting after its election
by the stockholders shall appoint an Executive Committee, a Trust Committee, an
Audit Committee and a Compensation Committee, and shall elect from its own
members a Chairman of the Board of Directors and a President who may be the same
person. The Board of Directors shall also elect at such meeting a Secretary and
a Treasurer, who may be the same person, may appoint at any time such other
committees and elect or appoint such other officers as it may deem advisable.
The Board of Directors may also elect at such meeting one or more Associate
Directors.
Section 11. The Board of Directors may at any time remove, with or without
cause, any member of any Committee appointed by it or any associate director or
officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or divisions of the Company as it may deem
advisable.
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ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not more than nine
members who shall be selected by the Board of Directors from its own members and
who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of the Board of
Directors when it is not in session to transact all business for and in behalf
of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members, or at the call of the Chairman of the Executive
Committee or at the call of the Chairman of the Board of Directors. The
majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be
held at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee shall be kept
and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend all
investments that may be made of the funds of the Company, and shall direct the
disposal of the same, in accordance with such rules and regulations as the Board
of Directors from time to time make.
(F) In the event of a state of disaster of sufficient severity to
prevent the conduct and management of the affairs and business of the Company by
its directors and officers as contemplated by these By-Laws any two available
members of the Executive Committee as constituted immediately prior to such
disaster shall constitute a quorum of that Committee for the full conduct and
management of the affairs and business of the Company in accordance with the
provisions of Article III of these By-Laws; and if less than three members of
the Trust Committee is constituted immediately prior to such disaster shall be
available for the transaction of its business, such Executive Committee shall
also be empowered to exercise all of the powers reserved to the Trust Committee
under Article III Section 2 hereof. In the event of the unavailability, at such
time, of a minimum of two members of such Executive Committee, any three
available directors shall constitute the Executive Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the foregoing provisions of this Section. This By-Law shall be subject to
implementation by Resolutions of the Board of Directors presently existing or
hereafter passed from time to time for that purpose, and any provisions of these
By-Laws (other than this Section) and any resolutions which are contrary to the
provisions of this Section or to the provisions
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of any such implementary Resolutions shall be suspended during such a disaster
period until it shall be determined by any interim Executive Committee acting
under this section that it shall be to the advantage of the Company to resume
the conduct and management of its affairs and business under all of the other
provisions of these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more than thirteen
members who shall be selected by the Board of Directors, a majority of whom
shall be members of the Board of Directors and who shall hold office during the
pleasure of the Board.
(B) The Trust Committee shall have general supervision over the Trust
Department and the investment of trust funds, in all matters, however, being
subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal office of the
Company or elsewhere in its discretion at such times to be determined by a
majority of its members or at the call of its chairman. A majority of its
members shall be necessary to constitute a quorum for the transaction of
business.
(D) Minutes of each meeting of the Trust Committee shall be kept and
promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint Committees
and/or designate officers or employees of the Company to whom supervision over
the investment of trust funds may be delegated when the Trust Committee is not
in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five members who shall
be selected by the Board of Directors from its own members, none of whom shall
be an officer of the Company, and shall hold office at the pleasure of the
Board.
(B) The Audit Committee shall have general supervision over the Audit
Division in all matters however subject to the approval of the Board of
Directors; it shall consider all matters brought to its attention by the officer
in charge of the Audit Division, review all reports of examination of the
Company made by any governmental agency or such independent auditor employed for
that purpose, and make such recommendations to the Board of Directors with
respect thereto or with respect to any other matters pertaining to auditing the
Company as it shall deem desirable.
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(C) The Audit Committee shall meet whenever and wherever the majority
of its members shall deem it to be proper for the transaction of its business,
and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not more than
five (5) members who shall be selected by the Board of Directors from its own
members who are not officers of the Company and who shall hold office during the
pleasure of the Board.
(B) The Compensation Committee shall in general advise upon all
matters of policy concerning the Company brought to its attention by the
management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called at any time
by the Chairman of the Compensation Committee, the Chairman of the Board of
Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be elected by the
Board of Directors as an associate director, to serve during the pleasure of the
Board.
(B) An associate director shall be entitled to attend all directors
meetings and participate in the discussion of all matters brought to the Board,
with the exception that he would have no right to vote. An associate director
will be eligible for appointment to Committees of the Company, with the
exception of the Executive Committee, Audit Committee and Compensation
Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of any Committee
created under Article III of the By-Laws of this Company, the member or members
thereof present at any meeting and not disqualified from voting, whether or not
he or they constitute a quorum, may unanimously appoint another member of the
Board of Directors to act at the meeting in the place of any such absent or
disqualified member.
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ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at all
meetings of the Board and shall have such further authority and powers and shall
perform such duties as the Board of Directors may from time to time confer and
direct. He shall also exercise such powers and perform such duties as may from
time to time be agreed upon between himself and the President of the Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the Board
of Directors shall preside at all meetings of the Board of Directors at which
the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining to
the office of the President conferred or imposed upon him by statute or assigned
to him by the Board of Directors. In the absence of the Chairman of the Board
the President shall have the powers and duties of the Chairman of the Board.
Section 4. The Chairman of the Board of Directors or the President as
designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however denominated
by the Board of Directors, who may at any time perform all the duties of the
Chairman of the Board of Directors and/or the President and such other powers
and duties as may from time to time be assigned to them by the Board of
Directors, the Executive Committee, the Chairman of the Board or the President
and by the officer in charge of the department or division to which they are
assigned.
Section 6. The Secretary shall attend to the giving of notice of meetings
of the stockholders and the Board of Directors, as well as the Committees
thereof, to the keeping of accurate minutes of all such meetings and to
recording the same in the minute books of the Company. In addition to the other
notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
Section 7. The Treasurer shall have general supervision over all assets
and liabilities of the Company. He shall be custodian of and responsible for
all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
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Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller officers
however denominated, who may perform the duties of the Controller and such
duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit Officers,
however denominated, who may perform all the duties of the Auditor and such
duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank to all
Vice Presidents with such functional titles as shall be determined from time to
time by the Board of Directors, who shall ex officio hold the office Assistant
Secretary of this Company and who may perform such duties as may be prescribed
by the officer in charge of the department or division to whom they are
assigned.
Section 11. The powers and duties of all other officers of the Company
shall be those usually pertaining to their respective offices, subject to the
direction of the Board of Directors, the Executive Committee, Chairman of the
Board of Directors or the President and the officer in charge of the department
or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of the
Company and a transfer book shall be kept in which all transfers of stock shall
be recorded.
Section 2. Certificates of stock shall bear the signature of the President
or any Vice President, however denominated by the Board of Directors and
countersigned by the Secretary or Treasurer or an Assistant Secretary, and the
seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company
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by the holder thereof or his attorney, upon surrender of the certificate
properly endorsed. Any certificate of stock surrendered to the Company shall be
cancelled at the time of transfer, and before a new certificate or certificates
shall be issued in lieu thereof. Duplicate certificates of stock shall be issued
only upon giving such security as may be satisfactory to the Board of Directors
or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to fix in
advance a record date for the determination of the stockholders entitled to
notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the following
form:
Between two concentric circles the words
"Wilmington Trust Company" within the inner
circle the words "Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar year.
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice President,
however denominated by the Board of Directors, shall have full power and
authority to enter into, make, sign, execute, acknowledge and/or deliver and the
Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian,
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trustee, agent or in any other fiduciary or representative capacity by any and
every method of appointment or by whatever person, corporation, court officer or
authority in the State of Delaware, or elsewhere, without any specific
authority, ratification, approval or confirmation by the Board of Directors or
the Executive Committee, and any and all such instruments shall have the same
force and validity as though expressly authorized by the Board of Directors
and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other than
salaried officers of the Company, shall be paid such reasonable honoraria or
fees for attending meetings of the Board of Directors as the Board of Directors
may from time to time determine. Directors and associate directors who serve as
members of committees, other than salaried employees of the Company, shall be
paid such reasonable honoraria or fees for services as members of committees as
the Board of Directors shall from time to time determine and directors and
associate directors may be employed by the Company for such special services as
the Board of Directors may from time to time determine and shall be paid for
such special services so performed reasonable compensation as may be determined
by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to the
fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal representative, is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee, fiduciary or
agent of another corporation or of a partnership, joint venture, trust,
enterprise or non-profit entity, including service with respect to employee
benefit plans, against all liability and loss suffered and expenses reasonably
incurred by such person. The Corporation shall indemnify a person in connection
with a proceeding initiated by such person only if the proceeding was authorized
by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in defending any
proceeding in advance of its final disposition, provided, however, that the
payment of expenses incurred by a Director or officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
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(C) If a claim for indemnification or payment of expenses, under this
Article X is not paid in full within ninety days after a written claim therefor
has been received by the Corporation the claimant may file suit to recover the
unpaid amount of such claim and, if successful in whole or in part, shall be
entitled to be paid the expense of prosecuting such claim. In any such action
the Corporation shall have the burden of proving that the claimant was not
entitled to the requested indemnification of payment of expenses under
applicable law.
(D) The rights conferred on any person by this Article X shall not be
exclusive of any other rights which such person may have or hereafter acquire
under any statute, provision of the Charter or Act of Incorporation, these By-
Laws, agreement, vote of stockholders or disinterested Directors or otherwise.
(E) Any repeal or modification of the foregoing provisions of this
Article X shall not adversely affect any right or protection hereunder of any
person in respect of any act or omission occurring prior to the time of such
repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in whole or
in part, and any new By-Law or By-Laws adopted at any regular or special meeting
of the Board of Directors by a vote of the majority of all the members of the
Board of Directors then in office.
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EXHIBIT C
SECTION 321(B) CONSENT
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as amended,
Wilmington Trust Company hereby consents that reports of examinations by
Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: August 31, 1999 By: /s /Norma P. Closs
-----------------------------------
Name: Norma P. Closs
Title: Vice President
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EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- --------------------------------------------- ----------------------------
Name of Bank City
in the State of DELAWARE, at the close of business on June 30, 1999.
<TABLE>
<CAPTION>
Thousands
of dollars
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins................. 207,947
Interest-bearing balances........................................... 0
Held-to-maturity securities.............................................. 37,680
Available-for-sale securities............................................ 1,598,933
Federal funds sold and securities purchased under agreements to resell... 180,366
Loans and lease financing receivables:
Loans and leases, net of unearned income............4,237,557
LESS: Allowance for loan and lease losses.............70,233
LESS: Allocated transfer risk reserve......................0
Loans and leases, net of unearned income, allowance, and reserve.... 4,167,324
Assets held in trading accounts.......................................... 0
Premises and fixed assets (including capitalized leases)................. 141,415
Other real estate owned.................................................. 922
Investments in unconsolidated subsidiaries and associated companies...... 1,227
Customers' liability to this bank on acceptances outstanding............. 0
Intangible assets........................................................ 5,179
Other assets............................................................. 104,101
Total assets............................................................. 6,445,094
</TABLE>
CONTINUED ON NEXT PAGE
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<TABLE>
<S> <C>
LIABILITIES
Deposits:
In domestic offices.......................................................... 4,574,509
Noninterest-bearing................................... 992,436
Interest-bearing.................................... 3,582,073
Federal funds purchased and Securities sold under agreements to repurchase... 344,719
Demand notes issued to the U.S. Treasury..................................... 83,802
Trading liabilities (from Schedule RC-D)..................................... 0
Other borrowed money:........................................................ ///////
With original maturity of one year or less.............................. 860,000
With original maturity of more than one year............................ 43,000
Bank's liability on acceptances executed and outstanding..................... 0
Subordinated notes and debentures............................................ 0
Other liabilities (from Schedule RC-G)....................................... 80,279
Total liabilities............................................................ 5,986,309
EQUITY CAPITAL
Perpetual preferred stock and related surplus................................ 0
Common Stock................................................................. 500
Surplus (exclude all surplus related to preferred stock)..................... 62,118
Undivided profits and capital reserves....................................... 412,409
Net unrealized holding gains (losses) on available-for-sale securities....... (16,242)
Total equity capital......................................................... 458,785
Total liabilities, limited-life preferred stock, and equity capital.......... 6,445,094
</TABLE>
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<CIK> 0001094059
<NAME> CB&T HOLDING CORP.
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 JUN-30-1999
<PERIOD-END> DEC-31-1998 JUN-30-1999
<CASH> 3,637 2,122
<INT-BEARING-DEPOSITS> 0 0
<FED-FUNDS-SOLD> 23,280 29,030
<TRADING-ASSETS> 0 0
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<TOTAL-ASSETS> 282,526 276,191
<DEPOSITS> 252,728 245,776
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<LONG-TERM> 11,624 11,324
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0 0
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<INTEREST-INVEST> 1,324 609
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<INTEREST-TOTAL> 37,386 20,828
<INTEREST-DEPOSIT> 12,911 6,632
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<EXPENSE-OTHER> 14,037 8,672
<INCOME-PRETAX> 6,560 3,041
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<EXTRAORDINARY> 0 0
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<NET-INCOME> 4,722 3,029
<EPS-BASIC> 23.15 14.85
<EPS-DILUTED> 23.15 14.85
<YIELD-ACTUAL> 7.84 8.41
<LOANS-NON> 3,819 2,561
<LOANS-PAST> 2,840 1,682
<LOANS-TROUBLED> 659 453
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<ALLOWANCE-OPEN> 5,097 4,484
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<RECOVERIES> 256 315
<ALLOWANCE-CLOSE> 4,484 5,407
<ALLOWANCE-DOMESTIC> 4,484 5,407
<ALLOWANCE-FOREIGN> 0 0
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