<PAGE> 1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE SECURITIES EXCHANGE ACT OF 1934)
CHEMED CORPORATION
(Name of Issuer)
CHEMED CORPORATION
CHEMED CAPITAL TRUST
(Name of Person(s) Filing Statement)
CAPITAL STOCK, $1 PAR VALUE
(Title of Class of Securities)
163 596 109
(CUSIP Number of Class of Securities)
NAOMI C. DALLOB
VICE PRESIDENT AND SECRETARY
2600 CHEMED CENTER
255 EAST FIFTH STREET
CINCINNATI, OHIO 45202-4726
(513) 762-6900
Copy to:
ROBERT ROSENMAN, ESQ.
CRAVATH, SWAINE & MOORE
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019
(212) 474-1000
(Name, Address and Telephone Number of Person Authorized to Receive Notices
and Communications on Behalf of the Person(s) Filing Statement)
DECEMBER 23, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
TRANSACTION VALUATION $54,630,000* AMOUNT OF FILING FEE $10,926
- -------------------------------------------------------------------------------------------------------
<S> <C>
</TABLE>
* For purposes of calculating the filing fee in accordance with Rule 0-11(b)(2)
under the Securities Exchange Act of 1934, as amended, the market value of the
Capital Stock proposed to be acquired was established by multiplying the
average of 26.69 and 27.94 (the high and low sales prices on December 20,
1999) by 2,000,000, the number of shares of Capital Stock which Chemed
Corporation and Chemed Capital Trust have offered to acquire.
[ ] Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form or
Schedule and the date of its filing.
Amount Previously Paid:......................................................N/A
Form or Registration No:.....................................................N/A
Filing Party:................................................................N/A
Date Filed:..................................................................N/A
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
ITEM 1. SECURITY AND ISSUER.
(a) The name of the issuer is Chemed Corporation, a Delaware corporation
(the "Company"). The Company's principal executive offices are located at 2600
Chemed Center, 255 East Fifth Street, Cincinnati, Ohio 45202-4726.
(b) The class of securities to which this statement relates is the
Company's Capital Stock, $1 par value (the "Capital Stock"). As of December 20,
1999, there were 10,398,781 shares of Capital Stock outstanding. Reference is
made to "Summary of the Exchange Offer" and "The Exchange Offer -- Terms of the
Exchange Offer" and "-- Conditions to the Exchange Offer" in the Offering
Circular dated December 23, 1999, a copy of which is attached hereto as Exhibit
(a)(1) (the "Offering Circular"), which sections are incorporated herein by
reference. Shares of Capital Stock held by officers, directors or affiliates of
the Company at the time of the Exchange Offer are eligible for exchange if
properly tendered pursuant to the Exchange Offer on the same basis as all other
shares of Capital Stock.
(c) Reference is hereby made to the information set forth under the caption
"Market and Price Ranges of Capital Stock; Dividends" in the Offering Circular,
which section is incorporated herein by reference.
(d) The names of the persons filing this statement are Chemed Capital Trust
(the "Trust"), a newly organized statutory business trust organized under the
laws of the State of Delaware, and the Company. The address of the Trust's
principal office is c/o Chemed Corporation, 2600 Chemed Center, 255 East Fifth
Street, Cincinnati, Ohio 45202-4726. The Trust has been organized by the Company
for the purpose of effecting the Exchange Offer. Reference is made to "Summary
of the Exchange Offer" and "Chemed Capital Trust" in the Offering Circular,
which are incorporated herein by reference.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) Reference is hereby made to the information set forth under the
captions "Summary Financial Information," "Capitalization" and "The Exchange
Offer" in the Offering Circular, which sections are incorporated herein by
reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATES.
Reference is hereby made to the cover page of the Offering Circular, the
information set forth under the caption "The Exchange Offer -- Conditions to the
Exchange Offer," "Market and Price Ranges of Capital Stock; Dividends," and
"Purposes and Effects of the Exchange Offer -- Certain Effects" in the Offering
Circular, which sections are incorporated herein by reference.
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) See the information set forth under the captions "Summary Financial
Information," "Capitalization" and "Market and Price Ranges of Capital Stock;
Dividends" in the Offering Circular, which sections are specifically
incorporated herein by reference.
(f) Not applicable.
(g) Not applicable.
(h) Not applicable.
(i) Not applicable.
(j) Not applicable.
2
<PAGE> 3
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The following sets forth each transaction in the shares of Capital Stock
effected since (and including) October 26, 1999 by the Trust, the Company, by
any person referred to in Instruction C of Schedule 13E-4 (i.e., by each
executive officer and director of the Company, any person "controlling" the
Company and each director and executive officer of any "controlling" person) or
by any associate or subsidiary of such person, including any director or officer
of any such subsidiary:
<TABLE>
<CAPTION>
WHERE AND HOW THE
AMOUNT OF PRICE PER TRANSACTION WAS
NAME AND TITLE DATE OF THE TRANSACTION SECURITIES SECURITY EFFECTED
-------------- ----------------------- ---------- --------- -----------------
<C> <S> <C> <C> <C> <C>
1. Rick L. Arquilla November 11-24, 1999 1,528 purchased $25.51 Open market transaction
Director December 3-16, 1999 1,078 purchased $26.33 Open market transaction
2. Naomi C. Dallob November 11-24, 1999 1,680 purchased $25.51 Open market transaction
Vice President and December 3-16, 1999 1,186 purchased $26.33 Open market transaction
Secretary
3. James H. Devlin November 11-24, 1999 2,811 purchased $25.51 Open market transaction
Vice President and December 3-16, 1999 1,984 purchased $26.33 Open market transaction
Director
4. Edward L. Hutton November 11-24, 1999 3,055 purchased $25.51 Open market transaction
Chairman, Chief December 3-16, 1999 5,689 purchased $26.33 Open market transaction
Executive Officer
and Director
5. Thomas C. Hutton November 11-24, 1999 14,311 purchased $25.50-$26.44 Open market transaction
Vice President and December 3-16, 1999 1,984 purchased $26.33 Open market transaction
Director
6. Sandra E. Laney November 11-24, 1999 1,528 purchased $25.51 Open market transaction
Senior Vice December 3-16, 1999 2,844 purchased $26.33 Open market transaction
President, Chief
Administrative
Officer and
Director
7. Spencer S. Lee November 11-24, 1999 2,811 purchased $25.51 Open market transaction
Director December 3-16, 1999 1,984 purchased $26.33 Open market transaction
8. John M. Mount November 11-24, 1999 2,811 purchased $25.51 Open market transaction
Vice President and December 3-16, 1999 1,984 purchased $26.33 Open market transaction
Director
9. Timothy S. O'Toole November 11-24, 1999 5,500 purchased $25.51 Open market transaction
Executive Vice December 3-16, 1999 3,881 purchased $26.33 Open market transaction
President,
Treasurer and
Director
10. George J. Walsh III December 20, 1999 580 purchased $27.56 Open market transaction
Director
</TABLE>
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The Trust and the Company have agreed that the Trust will transfer the
shares tendered in the Exchange Offer to the Company in exchange for Convertible
Junior Subordinated Debentures due 2030 of the Company.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
There have been no persons employed, retained or to be compensated to make
solicitations or recommendations in connection with the Exchange Offer. D.F.
King & Co., Inc. has been retained as the Information Agent for the Exchange
Offer. D.F. King & Co., Inc. will receive reasonable and customary
3
<PAGE> 4
compensation for services rendered in connection with the Exchange Offer and
will be reimbursed for customary and reasonable out-of-pocket expenses.
ITEM 7. FINANCIAL INFORMATION.
(a)(1) The audited consolidated financial statements for the years ended
December 31, 1998 and 1997, are included in the Company's Annual Report on Form
10-K for the year ended December 31, 1998, attached hereto as Exhibit (g)(1),
which is incorporated herein by reference.
(a)(2) The unaudited consolidated balance sheets and comparative
year-to-date consolidated statements of income and consolidated statements of
cash flows and related earnings per share amounts are included in the Company's
Quarterly Report on Form 10-Q for the nine months ended September 30, 1999,
attached hereto as Exhibit (g)(2), and are incorporated herein by reference.
(a)(3) The ratios of earnings to fixed charges, which are included under
the caption "Summary Financial Information" in the Offering Circular, are
incorporated herein by reference.
(a)(4) The book values per share, which are included under the caption
"Summary Financial Information" in the Offering Circular, are incorporated
herein by reference.
(b)(1) Selected balance sheet items, on a pro forma basis, as of December
31, 1998, and September 30, 1999, which are included under the caption "Summary
Financial Information" in the Offering Circular, are incorporated herein by
reference.
(b)(2) The pro forma income statement, earnings per share amounts and ratio
of income to fixed charges for the year ended December 31, 1998, and the nine
months ended September 30, 1999, which are included under the caption "Summary
Financial Information" in the Offering Circular, are incorporated herein by
reference.
(b)(3) The pro forma book value per common share as of December 31, 1998,
and September 30, 1999, which are included under the caption "Summary Financial
Information" in the Offering Circular, are incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The Convertible Trust Preferred Securities of the Trust (the "Preferred
Securities") issued upon exchange of shares of Capital Stock will be issued in
reliance on the exemption from the registration requirements of the Securities
Act of 1933 provided in Section 3(a)(9) thereof. In connection with the proposed
issuance of the Preferred Securities upon consummation of the Exchange Offer, an
application has been filed with the Securities and Exchange Commission on Form
T-3 for qualification of the Amended and Restated Declaration of Trust of the
Trust (a copy of the form of which is attached hereto as Exhibit (b)(2)), the
Indenture between the Company and Firstar Bank, National Association, as Trustee
(a copy of the form of which is attached hereto as Exhibit (b)(3)) and the
Preferred Securities Guarantee Agreement between the Company and Firstar Bank,
National Association, as Trustee (a copy of the form of which is attached hereto
as Exhibit (b)(4)).
(c) Reference is hereby made to "Purposes and Effects of the Exchange
Offer" in the Offering Circular, which section is incorporated herein by
reference.
(d) None.
(e) Reference is hereby made to the Offering Circular and the Letter of
Transmittal, which are each incorporated herein by reference in their entirety.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
<TABLE>
<S> <C>
(a)(1) Offering Circular dated December 23, 1999.
(a)(2) Letter of Transmittal (together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9).
</TABLE>
4
<PAGE> 5
<TABLE>
<S> <C>
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Press Release dated December 23, 1999.
(a)(5) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Nominees.
(a)(6) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees to their clients.
(b)(1) Declaration of Trust of Chemed Capital Trust, dated December
21, 1999.
(b)(2) Form of Amended and Restated Declaration of Trust of Chemed
Capital Trust, dated January --, 2000.
(b)(3) Form of Indenture between Chemed Corporation and Firstar
Bank, National Association, as Trustee, dated January --,
2000.
(b)(4) Form of Preferred Securities Guarantee Agreement, dated
January -- 2000.
(b)(5) Form of Common Securities Guarantee Agreement, dated January
-- 2000.
(c) None.
(d) Tax Opinion of Cravath, Swaine & Moore.
(e) Not applicable.
(f) None.
(g)(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998.
(g)(2) The Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1999, June 30, 1999 and September
30, 1999.
</TABLE>
5
<PAGE> 6
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
CHEMED CORPORATION
By: /s/ NAOMI C. DALLOB
------------------------------------
Name: Naomi C. Dallob
Title: Vice President and Secretary
CHEMED CAPITAL TRUST
By: Chemed Corporation
as sponsor
December 23, 1999 By: /s/ NAOMI C. DALLOB
------------------------------------
Name: Naomi C. Dallob
Title: Vice President and Secretary
6
<PAGE> 7
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBITS
- --------
<S> <C>
(a)(1) Offering Circular dated December 23, 1999.
(a)(2) Letter of Transmittal (together with Guidelines for
Certification of Taxpayer Identification Number on
Substitute Form W-9).
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Press release dated December 23, 1999.
(a)(5) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(6) Form of Letter from Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees to their clients.
(b)(1) Declaration of Trust of Chemed Capital Trust, dated December
21, 2000.
(b)(2) Form of Amended and Restated Declaration of Trust of Chemed
Capital Trust, dated January --, 2000.
(b)(3) Form of Indenture between Chemed Corporation and Firstar
Bank, National Association, as Trustee, dated --, 2000.
(b)(4) Form of Preferred Securities Guarantee Agreement, dated
January --, 2000.
(b)(5) Form of Common Securities Guarantee Agreement, dated January
--, 2000.
(d) Tax Opinion of Cravath, Swaine & Moore.
(g)(1) Annual Report on Form 10-K of Chemed Corporation for the
year ended December 31, 1998 (File No. 1-8351)*.
(g)(2) Quarterly Reports on Form 10-Q of Chemed Corporation for the
quarters ended March 31, 1999, June 30, 1999 and September
30, 1999 (File No. 1-8351)*.
</TABLE>
- ---------------
* Incorporated by reference.
7
<PAGE> 1
Exhibit a(1)
OFFERING CIRCULAR
CHEMED CORPORATION
CHEMED CAPITAL TRUST
OFFER TO EXCHANGE
CHEMED CAPITAL TRUST CONVERTIBLE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $27 PER CONVERTIBLE TRUST PREFERRED SECURITY AND
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY CHEMED CORPORATION)
FOR
UP TO 2,000,000 OUTSTANDING SHARES OF
CAPITAL STOCK OF CHEMED CORPORATION
THE EXCHANGE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 24, 2000, UNLESS THE EXCHANGE
OFFER IS EXTENDED.
Chemed Corporation, a Delaware corporation (the "Company"), and Chemed
Capital Trust, a Delaware statutory business trust (the "Trust" or the
"Issuer"), hereby offer, upon the terms and subject to the conditions set forth
in this Offering Circular and the accompanying Letter of Transmittal (which
together constitute the "Exchange Offer"), to exchange Convertible Trust
Preferred Securities representing preferred undivided beneficial interests in
the assets of the Trust (the "Preferred Securities"), for up to 2,000,000 of the
outstanding shares (the "Shares") of Capital Stock, par value $1 per share (the
"Capital Stock"), of the Company. Concurrently with the issuance of Preferred
Securities in exchange for Shares validly tendered in the Exchange Offer, the
Company will deposit in the Trust as trust assets its Convertible Junior
Subordinated Debentures due 2030 (the "Junior Subordinated Debentures"), having
an aggregate principal amount equal to the aggregate stated liquidation amount
of the Preferred Securities to be issued by the Trust in the Exchange Offer.
Distributions (as defined herein) will accrue on the Preferred Securities
at the annual rate of $2.00 for each Preferred Security, payable quarterly in
arrears. The Trust reserves the right to defer Distributions on the Preferred
Securities for up to 20 consecutive quarters. Deferred Distributions will
compound quarterly. Each of the Preferred Securities is convertible, at the
option of the holder, into Shares at the rate of 0.73 of a Share for each
Preferred Security (equivalent to a conversion price of $37 per Share), subject
to adjustment in certain circumstances.
Exchanges will be made on the basis of one Preferred Security for each
Share validly tendered and accepted for exchange in the Exchange Offer. As of
December 20, 1999, there were 10,398,781 Shares outstanding. Shares not accepted
for exchange because of proration will be returned. For a description of the
other terms of the Exchange Offer, see "The Exchange Offer -- Terms of the
Exchange Offer," "-- Expiration Date; Extensions; Amendments; Termination,"
"-- Withdrawal of Tenders," "-- Acceptance of Shares and Proration" and "-- Odd
Lots; Dividend Reinvestment Plan."Application will be made to list the Preferred
Securities on the New York Stock Exchange (the "NYSE"). In order to satisfy the
NYSE listing requirements, acceptance of Shares validly tendered in the Exchange
Offer is subject to the condition that as of the expiration date (the
"Expiration Date") there be at least 1,000,000 Shares validly tendered, and not
withdrawn, by at least 400 record or beneficial holders of Shares (the "Minimum
Distribution Condition"), which condition may be waived. See "The Exchange
Offer -- Expiration Date; Extensions; Amendments; Termination" and
"-- Conditions to the Exchange Offer."
The Company and the Trust expressly reserve the right, in their sole
discretion, subject to applicable law, to (i) terminate the Exchange Offer, and
not accept for exchange any Shares and promptly return all Shares upon the
failure of any of the conditions specified above or in "The Exchange
Offer -- Conditions to the Exchange Offer," (ii) waive any condition to the
Exchange Offer and accept Shares previously tendered pursuant to the Exchange
Offer and not withdrawn, (iii) extend the Expiration Date, subject, however, to
all withdrawal rights of holders (see "The Exchange Offer -- Withdrawal of
Tenders"), (iv) amend the terms of the Exchange Offer or
(Continued on next page)
PROSPECTIVE EXCHANGING HOLDERS OF SHARES SHOULD SEE "RISK FACTORS" STARTING
ON PAGE 13 FOR A DISCUSSION OF CERTAIN FACTORS RELATING TO THE PREFERRED
SECURITIES THAT SHOULD BE CONSIDERED BY INVESTORS, INCLUDING THE PERIOD AND
CIRCUMSTANCES DURING AND UNDER WHICH PAYMENTS ON THE JUNIOR SUBORDINATED
DEBENTURES AND THE PREFERRED SECURITIES MAY BE DEFERRED AND THE RELATED U.S.
FEDERAL INCOME TAX CONSEQUENCES.
------------------------
The date of this Offering Circular is December 23, 1999.
<PAGE> 2
(Continued from cover page)
(v) modify the form of the consideration to be paid pursuant to the Exchange
Offer. Any amendment applicable to the Exchange Offer will apply to all Shares
tendered pursuant to the Exchange Offer. The minimum period during which the
Exchange Offer must remain open following material changes in the terms of the
Exchange Offer or the information concerning the Exchange Offer, other than a
change in the percentage of securities sought or the price, depends upon the
facts and circumstances, including the relative materiality of such terms or
information. See "The Exchange Offer -- Expiration Date; Extensions;
Amendments; Termination."
The Company will own, directly or indirectly, all the securities
representing common undivided beneficial interests in the assets of the Trust
(the "Common Securities" and, together with the Preferred Securities, the "Trust
Securities"). The Trust exists for the purpose of (a) issuing (i) its Preferred
Securities in exchange for Shares validly tendered in the Exchange Offer and
delivering such Shares to the Company in consideration for the deposit by the
Company of Junior Subordinated Debentures having an aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Preferred
Securities in the Trust as trust assets and (ii) its Common Securities to the
Company in exchange for cash and investing the proceeds thereof in an equivalent
amount of Junior Subordinated Debentures and (b) engaging in such other
activities as are necessary and incidental thereto. The Preferred Securities and
the Common Securities will rank pari passu with each other and will have
equivalent terms; provided, however, that (i) if an Event of Default (as defined
herein) under the Declaration (as defined herein) occurs and is continuing, the
holders of Preferred Securities will have a priority over holders of the Common
Securities with respect to payments in respect of distributions and payments
upon liquidation, redemption or otherwise and (ii) holders of Common Securities
have the exclusive right (subject to the terms of the Declaration) to appoint,
replace or remove trustees of the Trust and to increase or decrease the number
of trustees of the Trust, subject to the right of holders of Preferred
Securities to appoint a trustee of the Trust (the "Special Trustee") upon the
occurrence of certain events described herein. See "Description of Preferred
Securities" and "Description of Junior Subordinated Debentures."
------------------------
THE EXCHANGE OFFER IS SUBJECT TO CERTAIN OTHER CONDITIONS. SEE
"THE EXCHANGE OFFER -- CONDITIONS TO THE EXCHANGE OFFER."
------------------------
Shares of the Capital Stock are listed and traded on the NYSE. On December
20, 1999, the reported closing sales price of the Capital Stock on the NYSE
Composite Tape was $27.94 per share. HOLDERS ARE URGED TO OBTAIN A CURRENT
MARKET QUOTATION FOR THE CAPITAL STOCK.
------------------------
NONE OF THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY, THE TRUST NOR
THE ISSUER TRUSTEES (AS DEFINED HEREIN) MAKES ANY RECOMMENDATION AS TO WHETHER
ANY HOLDER OF CAPITAL STOCK SHOULD TENDER ANY OR ALL OF SUCH HOLDER'S SHARES
PURSUANT TO THE EXCHANGE OFFER. EACH HOLDER OF CAPITAL STOCK MUST MAKE SUCH
HOLDER'S OWN DECISION WHETHER OR NOT TO TENDER SHARES AND, IF SO, HOW MANY
SHARES TO TENDER. AS OF THE DATE OF THIS OFFERING CIRCULAR, EXECUTIVE OFFICERS
AND DIRECTORS OF THE COMPANY DO NOT INTEND TO TENDER SHARES IN THE EXCHANGE
OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS OFFERING CIRCULAR. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
2
<PAGE> 3
IMPORTANT
The Exchange Offer is being made by the Company and the Trust in reliance
on the exemption from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"), afforded by Section 3(a)(9) thereof.
The Company and the Trust therefore will not pay any commission or other
remuneration to any broker, dealer, salesman or other person for soliciting
tenders of the Shares. Regular employees of the Company and the Trust, who will
not receive additional compensation therefor, may solicit exchanges from holders
of Shares.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE EXCHANGE OFFER OTHER THAN THOSE CONTAINED
IN THIS OFFERING CIRCULAR. IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE TRUST OR
THE ISSUER TRUSTEES (AS DEFINED HEREIN). NEITHER THE DELIVERY OF THIS OFFERING
CIRCULAR NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR
THE TRUST SINCE THE RESPECTIVE DATES AS OF WHICH INFORMATION IS GIVEN HEREIN. TO
THE EXTENT THERE IS A MATERIAL CHANGE IN THE AFFAIRS OF THE COMPANY OR THE TRUST
AFTER THE DATE HEREOF, THE COMPANY AND THE TRUST WILL PROMPTLY DISCLOSE SUCH
INFORMATION IN A MANNER REASONABLY CALCULATED TO INFORM THE HOLDERS OF CAPITAL
STOCK OF SUCH CHANGE.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF, HOLDERS OF CAPITAL STOCK IN ANY JURISDICTION IN WHICH THE
MAKING OF THE EXCHANGE OFFER OR ITS ACCEPTANCE WOULD NOT BE IN COMPLIANCE WITH
THE LAWS OF SUCH JURISDICTION. THE COMPANY AND THE TRUST ARE NOT AWARE OF ANY
JURISDICTION WHERE THE MAKING OF THE EXCHANGE OFFER OR THE TENDER OF CAPITAL
STOCK WOULD NOT BE IN COMPLIANCE WITH APPLICABLE LAW. IF THE COMPANY AND THE
TRUST BECOME AWARE OF ANY JURISDICTION WHERE THE MAKING OF THE EXCHANGE OFFER OR
THE TENDER OF CAPITAL STOCK IS NOT IN COMPLIANCE WITH ANY APPLICABLE LAW, THE
COMPANY AND THE TRUST WILL MAKE A GOOD FAITH EFFORT TO COMPLY WITH SUCH LAW. IF,
AFTER SUCH GOOD FAITH EFFORT, THE COMPANY AND THE TRUST CANNOT COMPLY WITH SUCH
LAW, THE EXCHANGE OFFER WILL NOT BE MADE TO (NOR WILL TENDERS BE ACCEPTED FROM
OR ON BEHALF OF) THE HOLDERS OF CAPITAL STOCK RESIDING IN SUCH JURISDICTION.
------------------------
Any holder of Capital Stock desiring to tender all or any portion of such
holder's Shares should (1) complete and sign the Letter of Transmittal (or a
facsimile copy thereof) in accordance with the instructions in the Letter of
Transmittal, mail or deliver it and any other documents required by the Letter
of Transmittal to Norwest Bank Minnesota, N.A., the exchange agent for the
Exchange Offer (the "Exchange Agent"), and either mail or deliver the
certificates for such Shares to the Exchange Agent along with the Letter of
Transmittal or (2) follow the procedures for book-entry transfer set forth in
"The Exchange Offer -- Procedures for Tendering Shares" or (3) request such
holder's broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for such holder. A HOLDER HAVING SHARES REGISTERED IN THE
NAME OF A BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE MUST
CONTACT SUCH BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE IF
SUCH HOLDER DESIRES TO TENDER SUCH SHARES IN THE EXCHANGE OFFER.
A holder who desires to tender Shares and whose certificates for such
Shares are not immediately available (or who cannot follow the procedures for
book-entry transfer on a timely basis) or who cannot transmit the Letter of
Transmittal and all other required documents to the Exchange Agent before the
Expiration Date should tender such Shares by following the procedures for
guaranteed delivery set forth in "The Exchange Offer -- Procedures for Tendering
Shares."
------------------------
Any questions or requests for assistance or for additional copies of this
Offering Circular, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent at its addresses and telephone
numbers set forth on the back cover of this Offering Circular. Holders of Shares
may also contact their broker, dealer, commercial bank, trust company or other
nominee for assistance concerning the Exchange Offer.
3
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
------- ----
<S> <C>
AVAILABLE INFORMATION....................................... 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............. 6
SUMMARY OF THE EXCHANGE OFFER............................... 7
RISK FACTORS................................................ 13
THE COMPANY................................................. 17
SUMMARY FINANCIAL INFORMATION............................... 18
CAPITALIZATION.............................................. 20
MARKET AND PRICE RANGES OF CAPITAL STOCK; DIVIDENDS......... 21
PURPOSES AND EFFECTS OF THE EXCHANGE OFFER.................. 22
THE EXCHANGE OFFER.......................................... 23
CHEMED CAPITAL TRUST........................................ 30
DESCRIPTION OF PREFERRED SECURITIES......................... 31
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES............... 46
DESCRIPTION OF GUARANTEE.................................... 53
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR
SUBORDINATED DEBENTURES AND THE GUARANTEE................. 56
DESCRIPTION OF CAPITAL STOCK................................ 57
U.S. FEDERAL INCOME TAX CONSIDERATIONS...................... 57
CERTAIN ERISA CONSIDERATIONS................................ 64
</TABLE>
4
<PAGE> 5
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith the Company files reports, proxy statements and other
information with the Securities and Exchange Commission (the "SEC"). The
reports, proxy statements and other information filed by the Company with the
SEC can be inspected and copied at the public reference facilities maintained by
the SEC at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the regional offices of the SEC at Seven World Trade Center, 13th
Floor, New York, New York 10048 and Northwestern Atrium Center, 500 West Madison
Street (Suite 1400), Chicago, Illinois 60661. Copies of such material also can
be obtained at prescribed rates from the Public Reference Section of the SEC,
450 Fifth Street, N.W., Washington, D.C. 20549. In addition, the SEC maintains a
Website (http://www.sec.gov) that also contains such reports, proxy statements
and other information filed by the Company. Material filed by the Company can
also be inspected at the library of the NYSE, 20 Broad Street, New York, New
York 10005.
------------------------
As used herein, (i) the "Indenture" means the Junior Subordinated
Indenture, between the Company and Firstar Bank, National Association ("Firstar
Bank"), as trustee (the "Debenture Trustee"), (ii) the "Declaration" means the
Amended and Restated Declaration of Trust relating to the Trust among the
Company, as Depositor (the "Depositor"), Firstar Bank as Property Trustee (the
"Property Trustee"), First Union Trust Company, National Association ("First
Union Trust Company") as Delaware Trustee (the "Delaware Trustee"), and the
individuals named as Administrative Trustees therein (the "Administrative
Trustees") (collectively with the Property Trustee and the Delaware Trustee, the
"Issuer Trustees") and (ii) the "Guarantee" means the Guarantee Agreement
between the Company and Firstar Bank (the "Guarantee Trustee").
5
<PAGE> 6
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the SEC by the Company are incorporated
by reference in this Offering Circular:
(a) Annual Report on Form 10-K (the "1998 Form 10-K") for the year
ended December 31, 1998, filed pursuant to Section 13 of the Exchange Act;
and
(b) Quarterly Reports on Form 10-Q for the quarters ended March 31,
1999, June 30, 1999 and September 30, 1999, filed pursuant to Section 13 of
the Exchange Act.
Pursuant to Rule 13e-4 under the Exchange Act, the Company and the Trust
have filed an Issuer Tender Offer Statement on Schedule 13E-4 (the "Schedule
13E-4") with the SEC. The Schedule 13E-4, including exhibits, may be inspected
or copied at the public reference facilities of the SEC in Washington, D.C. See
"Available Information."
All reports subsequently filed by the Company pursuant to Section 13(a) and
(c) of the Exchange Act and any definitive proxy or information statements filed
pursuant to Section 14 of the Exchange Act in connection with any subsequent
stockholders' meeting and any reports filed pursuant to Section 15(d) of the
Exchange Act prior to completion of the Exchange Offer shall be deemed to be
incorporated by reference into this Offering Circular and to be a part hereof
from the date of filing such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Offering Circular to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Offering Circular.
This Offering Circular incorporates by reference documents which are not
present herein or delivered herewith. The Company will provide without charge to
each person to whom this Offering Circular is delivered, on the request of any
such person, a copy of any or all of the foregoing documents incorporated herein
by reference (other than exhibits to such documents). Written or telephone
requests for such documents should be directed to the Information Agent at (800)
848-2998. From outside the U.S. or Canada, call collect: (212) 269-5550. In
order to ensure timely delivery of documents, requests should be made at least
five business days before the Expiration Date.
6
<PAGE> 7
SUMMARY OF THE EXCHANGE OFFER
This summary is qualified in its entirety by the detailed information
appearing elsewhere in this Offering Circular or incorporated by reference
herein. Terms used in this summary and not defined herein shall have the
meanings given to them elsewhere in this Offering Circular.
Securities Offered............ Up to 2,000,000 Preferred Securities of the
Trust.
Exchange Ratio................ One Preferred Security for each Share validly
tendered and accepted for exchange in the
Exchange Offer.
Expiration Date............... 12:00 midnight, New York City time, on Monday,
January 24, 2000, unless extended. See "The
Exchange Offer -- Terms of the Exchange Offer."
Procedures for Tendering
Shares........................ Each holder of Shares who wishes to tender his
or her Shares must deliver the following
documents prior to the Expiration Date to the
Exchange Agent at one of the addresses set
forth on the back cover hereof: (i)
certificates representing such Shares together
with the Letter of Transmittal, properly
completed and duly executed by such holder, and
all other documents required by such Letter of
Transmittal, (ii) if such holder wishes to
deliver his or her Shares through book-entry
transfer, confirmation of such transfer
together with an applicable Letter of
Transmittal, properly completed and duly
executed by such holder, or an Agent's Message
(as defined herein), and all other required
documents, or (iii) if such holder wishes to
tender by guaranteed delivery, a properly
completed and duly executed Notice of
Guaranteed Delivery. A holder having Shares
registered in the name of a broker, dealer,
commercial bank, trust company or other nominee
must contact such registered holder promptly if
such holder wishes to tender such Shares into
the Exchange Offer. LETTERS OF TRANSMITTAL,
NOTICES OF GUARANTEED DELIVERY AND SHARE
CERTIFICATES SHOULD BE SENT TO THE EXCHANGE
AGENT, AND NOT TO THE COMPANY OR THE TRUST. See
"The Exchange Offer -- Procedures for Tendering
Shares."
Purpose of the Exchange
Offer......................... On November 3, 1999, the Board of Directors of
the Company (the "Board of Directors") adopted
a new dividend policy, pursuant to which it
expects to declare reduced quarterly dividends
on the Shares in 2000 and beyond. The purpose
of the Exchange Offer is to offer holders of
Shares who prefer not to continue in an equity
position as holders of Capital Stock the
opportunity to obtain a higher current yield on
their investment in the Company through the
exchange of their Shares for Preferred
Securities. The Company expects the Exchange
Offer to result in certain tax efficiencies by
enabling it to deduct interest payable on the
Junior Subordinated Debentures for U.S. Federal
income tax purposes; dividends payable on the
Capital Stock are not deductible. Because the
conversion price of the Preferred Securities is
higher than the current trading price of the
Shares, holders of the Preferred Securities
have reduced participation in any growth in the
value of the Shares. See "Purposes and Effects
of the Exchange Offer" and "Summary Financial
Information."
Acceptance of Shares and
Delivery
of Preferred Securities..... Subject to the terms and conditions of the
Exchange Offer, the Company and the Trust will
accept for exchange up to 2,000,000
7
<PAGE> 8
Shares which are properly tendered in the
Exchange Offer and not withdrawn prior to the
Expiration Date. If the Company and the Trust
accept fewer than all Shares validly tendered
and not withdrawn before the Expiration Date,
whether because of proration or otherwise, the
Shares accepted first will consist of all
Shares tendered by any record or beneficial
owner of an aggregate of fewer than 100 Shares,
including any Shares held in the Company's
Dividend Reinvestment Plan. No fractional
Shares will be accepted by the Company and the
Trust. The Trust will deliver Preferred
Securities issued pursuant to the Exchange
Offer promptly following the Expiration Date.
Shares not accepted because of proration will
be returned to the tendering holders at the
Company's expense as promptly as practicable
following the Expiration Date. See "The
Exchange Offer -- Acceptance of Shares and
Proration" and "-- Odd Lots; Dividend
Reinvestment Plan."
Withdrawal of Tenders......... Tenders may be withdrawn at any time prior to
the Expiration Date or, unless previously
accepted for exchange, after 12:00 midnight,
New York City time, on February 22, 2000. See
"The Exchange Offer -- Withdrawal Rights."
Conditions of the Exchange
Offer......................... The Exchange Offer is subject to certain
conditions, any or all of which may be waived
by the Company and the Trust. See "The Exchange
Offer -- Certain Conditions of the Exchange
Offer."
Certain Federal Income Tax
Considerations.............. An exchange of Shares for Preferred Securities
pursuant to the Exchange Offer will be a
taxable transaction for U.S. Federal income tax
purposes. It is possible that the entire amount
of the Preferred Securities received in the
Exchange Offer will be treated as a dividend
taxable as ordinary income. For a discussion of
the U.S. Federal income tax consequences of the
exchange of Shares, see "U.S. Federal Income
Tax Considerations."
Distributions on the Preferred
Securities.................. Distributions on the Preferred Securities will
be payable on the Preferred Securities at the
annual rate of $2.00 per Preferred Security.
Subject to the Distribution deferral provisions
described below, Distributions will be payable
quarterly in arrears on each March 15, June 15,
September 15 and December 15, commencing March
15, 2000. Because Distributions on the
Preferred Securities constitute interest for
U.S. Federal income tax purposes, corporate
holders thereof will not be entitled to a
dividends-received deduction.
Distribution Deferral
Provisions.................... The ability of the Trust to pay Distributions
on the Preferred Securities is solely dependent
on its receipt of interest payments from the
Company on the Junior Subordinated Debentures.
The Company has the right at any time, and from
time to time, to defer the interest payments
due on the Junior Subordinated Debentures for
successive periods (each, a "Deferral Period")
not exceeding 20 consecutive quarters for each
such Deferral Period. Quarterly Distributions
on the Preferred Securities will be deferred by
the Trust during any Deferral Period, but will
continue to accumulate additional Distributions
thereon, compounded quarterly until the end of
any such Deferral Period. The Company will
cause the Trust to give
8
<PAGE> 9
written notice of its deferral of an interest
payment and the deferral of Distributions on
the Preferred Securities to the holders of the
Preferred Securities not later than ten days
prior to the related record date. The Company
has agreed, among other things, not to declare
or pay any dividend on the Capital Stock
(subject to certain exceptions) during any
Deferral Period. If a deferral of an interest
payment occurs, the holders of the Preferred
Securities will continue to recognize interest
income for U.S. Federal income tax purposes in
advance of the receipt of any corresponding
Distribution. If a holder of Preferred
Securities converts its Preferred Securities
into Capital Stock during any Deferral Period,
the holder will not receive any cash related to
any deferred Distributions. See "Risk
Factors -- Option to Extend Interest Payment
Period; Tax Consequences," "Description of
Preferred Securities -- Distributions,"
"Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment
Date" and "U.S. Federal Income Tax
Considerations -- U.S. Federal Income Tax
Consequences of Holding Preferred
Securities -- Interest Income and Original
Issue Discount."
Conversion into Capital
Stock......................... Each of the Preferred Securities is
convertible, at the option of the holder, into
Shares at the rate of 0.73 of a Share for each
Preferred Security (equivalent to a conversion
price of $37 per Share), subject to adjustment
in certain circumstances. The last reported
sale price of the Shares on the New York Stock
Exchange Composite Tape on December 20, 1999
was $27.94 per Share. In connection with any
conversion of the Preferred Securities, the
Property Trustee, as Conversion Agent, will
exchange such Preferred Securities for a Like
Amount (as defined in "Description of Preferred
Securities -- Liquidation of the Trust and
Distribution of Junior Subordinated
Debentures") of Junior Subordinated Debentures
held by the Trust and immediately convert such
Junior Subordinated Debentures into Shares. No
fractional Shares will be issued as a result of
conversion, but in lieu thereof such fractional
interest will be paid by the Company in cash
based on the then current market value of the
Shares. In addition, no additional Shares will
be issued upon conversion of Preferred
Securities to account for any accrued but
unpaid Distributions on the Preferred
Securities at the time of conversion. See
"Description of Preferred
Securities -- Conversion Rights."
Liquidation Amount............ In the event of any liquidation of the Trust
(after satisfaction of liabilities of creditors
to the Trust), a holder of each of the
Preferred Securities will be entitled to
receive $27 per Preferred Security plus an
amount equal to any accrued and unpaid
Distributions thereon to the date of payment,
unless a Junior Subordinated Debenture is
distributed to such holder. See "Description of
Preferred Securities -- Liquidation of the
Trust and Distribution of Junior Subordinated
Debentures."
Maturity...................... Although the Preferred Securities do not have a
stated maturity, they are subject to mandatory
redemption, at the applicable Redemption Price
(as defined herein), upon the repayment or
redemption, in whole or in part, of the Junior
Subordinated Debentures. The Junior
Subordinated Debentures will mature on March
15, 2030 (the "Stated Maturity"), unless
earlier redeemed as described below.
9
<PAGE> 10
Upon redemption of the Junior Subordinated
Debentures at their Stated Maturity, the
Preferred Securities will be redeemed at their
liquidation amounts plus an amount equal to any
accrued and unpaid Distributions thereon (the
"Stated Maturity Price").
Optional Redemption........... The Junior Subordinated Debentures are
redeemable, at the option of the Company (an
"Optional Redemption"), in whole or in part,
after March 15, 2003, at the prices specified
herein (the "Optional Redemption Price"). See
"-- Effect of Redemption" below and
"Description of Junior Subordinated
Debentures -- Redemption -- Optional
Redemption."
Tax Event or Investment
Company Event Redemption or
Distribution................ Upon the occurrence of a Tax Event (as defined
herein), except in certain limited
circumstances, or an Investment Company Event
(as defined herein), the Company will cause the
Issuer Trustees to liquidate the Trust and
cause the Junior Subordinated Debentures to be
distributed to the holders of the Preferred
Securities. In certain limited circumstances,
the Company will have the right to redeem the
Junior Subordinated Debentures in whole, but
not in part, at a price equal to the aggregate
principal amount thereof plus accrued and
unpaid interest thereon (the "Tax Event
Redemption Price"), in lieu of a distribution
of the Junior Subordinated Debentures. See
"-- Effect of Redemption" below. In the case of
a Tax Event, the Company may also elect to
cause the Preferred Securities to remain
outstanding and pay Additional Sums on the
Junior Subordinated Debentures. See
"Description of the Preferred Securities -- Tax
Event or Investment Company Event Redemption or
Distribution" and "Description of Junior
Subordinated Debentures -- Additional Sums."
Effect of Redemption.......... The "Stated Maturity Price," "Optional
Redemption Price" and "Tax Event Redemption
Price" shall each hereinafter be referred to as
a Redemption Price. Upon the repayment or
redemption of any Junior Subordinated
Debentures (other than following the
distribution of the Junior Subordinated
Debentures to the holders of Trust Securities),
the proceeds from such repayment or redemption
shall concurrently be applied to redeem, at the
applicable Redemption Price, the related Trust
Securities with an aggregate liquidation amount
equal to the aggregate principal amount of such
Junior Subordinated Debentures; provided,
however, that in the case of a Debenture Event
of Default or an Event of Default under the
Declaration, the Preferred Securities will
receive a preference over the Common
Securities. See "Description of Preferred
Securities -- Subordination of Common
Securities" and "Description of Junior
Subordinated Debentures -- Redemption --
Repayment at Maturity; Redemption of Junior
Subordinated Debentures" and "-- Optional
Redemption."
Guarantee..................... The Company will irrevocably guarantee, on a
subordinated basis and to the extent set forth
herein, the payment in full of (i)
Distributions on the Preferred Securities to
the extent of funds of the Trust available
therefor, (ii) the amount payable upon
redemption of the Preferred Securities to the
extent of funds of the Trust available therefor
and (iii) generally, the liquidation amount of
the Preferred Securities to the extent of the
assets of the Trust available
10
<PAGE> 11
for distribution to holders of Preferred
Securities. The Guarantee will be unsecured and
will be subordinate to all Senior Debt of the
Company. Upon the liquidation, dissolution or
winding up of the Company, its obligations
under the Guarantee will rank junior to all of
its Senior Debt, and, as a result, funds may
not be available for payment under the
Guarantee. See "Risk Factors -- Ranking of
Obligations Under the Guarantee and the Junior
Subordinated Debentures" and "-- Rights Under
the Guarantee" and "Description of Guarantee."
Effectively, the Company has, through the
Guarantee, the Junior Subordinated Debentures,
the Indenture and the Declaration, taken
together, fully, irrevocably and
unconditionally guaranteed 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 "Description of Guarantee" and
"Relationship among the Preferred Securities,
the Junior Subordinated Debentures and the
Guarantee."
Liquidation of the Trust...... The Company, as the holder of the outstanding
Common Securities, has the right at any time
(including upon the occurrence of a Tax Event
or Investment Company Act Event) to terminate
the Trust (subject to certain conditions). In
the event of such termination of the Trust,
after satisfaction of liabilities to creditors
of the Trust as required by applicable law, the
holders of the Trust Securities generally will
be entitled to receive per related Trust
Security the liquidation amount plus
accumulated and unpaid Distributions thereon to
the date of payment, which may be in the form
of a distribution of related Junior
Subordinated Debentures in certain
circumstances on a pro rata basis in accordance
with the respective liquidation amounts of such
Trust Securities. See "Description of Preferred
Securities -- Liquidation of the Trust and
Distribution of Junior Subordinated
Debentures."
Voting Rights................. Generally, holders of the Preferred Securities
will not have any voting rights. However, if
(i) an Event of Default with respect to the
Junior Subordinated Debentures occurs and is
continuing or (ii) the Company defaults under
the Guarantee with respect to the Preferred
Securities, the holders of the Preferred
Securities will be entitled, by majority vote,
to appoint a Special Trustee of the Trust. See
"Description of the Preferred
Securities -- Voting Rights; Amendment of the
Declaration."
Ranking....................... Payments on the Preferred Securities will be
made pro rata with the Common Securities except
as described under "Description of the
Preferred Securities -- Subordination of Common
Securities." The Junior Subordinated Debentures
will be unsecured and subordinate and junior in
right of payment in the manner set forth in the
Indenture to all Senior Debt of the Company.
See "Description of Junior Subordinated
Debentures -- Subordination." At November 30,
1999, the Company had approximately $89,792,000
of Senior Debt. In addition, the Junior
Subordinated Debentures are effectively
11
<PAGE> 12
subordinated to all existing and future
liabilities of the Company's subsidiaries,
which totaled $89,769,000 at November 30, 1999.
Listing....................... Application will be made to list the Preferred
Securities on the NYSE.
Absence of Market for the
Preferred Securities........ The Preferred Securities will be a new issue of
securities for which there is currently no
market and there can be no assurance as to the
development or liquidity of any market for the
Preferred Securities.
Capital Stock Dividends....... Each Share is entitled to receive dividends if,
as and when declared by the Board of Directors.
Since December 10, 1997, the Company has paid a
quarterly dividend of $0.53 per Share. The
Board of Directors has proposed to reduce the
quarterly dividends on the Shares in 2000 and
beyond. See "Market and Price Ranges of Capital
Stock; Dividends."
Information Agent............. D.F. King & Co., Inc., telephone: (800)
848-2998. If calling from outside the U.S. or
Canada, call collect: (212) 269-5550.
Exchange Agent................ Norwest Bank Minnesota, N.A., telephone: (800)
380-1372.
Further Information........... For further information, contact the
Information Agent.
12
<PAGE> 13
RISK FACTORS
Prospective exchanging holders of the Shares should carefully review the
information contained elsewhere in this Offering Circular and should
particularly consider the following matters.
ABSENCE OF PUBLIC MARKET FOR THE PREFERRED SECURITIES
There is no existing market for the Preferred Securities (or the Junior
Subordinated Debentures) and there can be no assurance as to the liquidity of
any markets that may develop for the Preferred Securities (or the Junior
Subordinated Debentures), the ability of the holders to sell their Preferred
Securities (or Junior Subordinated Debentures) or at what price holders of the
Preferred Securities (or the Junior Subordinated Debentures) will be able to
sell such securities. Future trading prices of the Preferred Securities (and the
Junior Subordinated Debentures) will depend on many factors including, among
other things, prevailing interest rates, the Company's operating results and the
market for similar securities. The Company and the Trust will apply to have the
Preferred Securities listed on NYSE. If the Minimum Distribution Condition is
not satisfied and the Company and the Trust waive the Minimum Distribution
Condition, the Preferred Securities issued in the Exchange Offer will be
ineligible for listing on the NYSE, which will adversely affect the liquidity
and trading prices of the Preferred Securities.
RANKING OF OBLIGATIONS UNDER THE GUARANTEE AND THE JUNIOR SUBORDINATED
DEBENTURES
The obligations of the Company arising and accruing under the Guarantee
issued by the Company for the benefit of the holders of Preferred Securities and
under the Junior Subordinated Debentures are general unsecured obligations of
the Company which are subordinate and junior in right of payment, to the extent
and in the manner set forth in the Guarantee and the Indenture, to all Senior
Debt of the Company. At November 30, 1999, the aggregate outstanding Senior Debt
of the Company was $89,792,000.
Because the Company is principally a holding company, the right of the
Company to participate in any distribution of assets of any subsidiary upon such
subsidiary's dissolution, winding-up, liquidation or reorganization or otherwise
(and thus the ability of holders of the Preferred Securities to benefit
indirectly from such distribution), is subject to the prior claims of creditors
of that subsidiary, except to the extent that the Company may itself be a
creditor of that subsidiary and its claims are recognized. Accordingly, the
Junior Subordinated Debentures and the Guarantee will at all times be
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Junior Subordinated Debentures and the Guarantee
should look only to the assets of the Company for payments on the Junior
Subordinated Debentures and the Guarantee. None of the Indenture, the Guarantee
and the Declaration places any limitation on the amount of secured or unsecured
debt, including Senior Debt, that may be incurred by the Company or the amount
of debt that may be incurred by the Company's subsidiaries. At November 30,
1999, the Company's subsidiaries had Debt and other liabilities of approximately
$89,769,000. See "Description of Guarantee -- Status of the Guarantee" and
"Description of Junior Subordinated Debentures -- Subordination." The ability of
the Trust to pay amounts due on the Preferred Securities is solely dependent
upon the Company making payments on the Junior Subordinated Debentures as and
when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
Provided that no Event of Default (as defined in the Indenture) has
occurred and is continuing with respect to the Junior Subordinated Debentures (a
"Debenture Event of Default"), the Company has the right under the Indenture to
defer the payment of interest on the Junior Subordinated Debentures accruing at
any time or from time to time for a period not exceeding 20 consecutive quarters
with respect to each Deferral Period; provided, however, that no Deferral Period
may extend beyond the Stated Maturity of the Junior Subordinated Debentures. See
"Description of Junior Subordinated Debentures -- Option to Extend Interest
Payment Date." As a consequence of any such deferral, quarterly Distributions on
the Preferred Securities by the Trust will be deferred (and the amount of
Distributions to which holders of the Preferred Securities are entitled will
accumulate additional Distributions thereon, compounded quarterly from the
relevant payment date for such Distributions) during any such Deferral Period.
During any such Deferral Period, the Company may not (i) declare or pay any
13
<PAGE> 14
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Capital Stock other than stock
dividends paid by the Company which consist of stock of the same class as that
on which the dividend is being paid or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that then rank pari passu in all respects with or
junior in interest to the Junior Subordinated Debentures (other than (a)
dividends or distributions in Capital Stock, (b) any declaration of a dividend
in connection with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee, (d) purchases or acquisitions of shares of Capital Stock in
connection with the satisfaction by the Company of its obligations under any
employee benefit plan or any other contractual obligation of the Company (other
than a contractual obligation ranking pari passu with or junior to the Junior
Subordinated Debentures), (e) as a result of a reclassification of the Company's
capital stock or the exchange or conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock or (f) the purchase of fractional interests in shares of the Company's
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged). A Deferral Period will terminate
upon the payment by the Company of all amounts then accrued and unpaid on the
Junior Subordinated Debentures (together with interest thereon compounded
quarterly, to the extent permitted by applicable law). Upon the termination of
any Deferral Period, and subject to the foregoing limitations, the Company may
elect to begin a new Deferral Period subject to the above conditions. There is
no limitation on the number of times that the Company may elect to begin a
Deferral Period. See "Description of the Preferred Securities -- Distributions"
and "Description of Convertible Junior Subordinated Debentures -- Option to
Extend Interest Payment Date."
Because the Company believes that the likelihood of its exercising its
option to defer payments of interest is remote, it will treat the Junior
Subordinated Debentures as issued without "original issue discount" ("OID") for
U.S. Federal income tax purposes in accordance with applicable Treasury
regulations. As a result, holders of the Preferred Securities generally will
include their allocable share of the interest on the Junior Subordinated
Debentures in taxable income under their own methods of tax accounting (i.e.,
cash or accrual). Under applicable Treasury regulations, however, if the Company
were to exercise its right to defer payments of interest, those Junior
Subordinated Debentures would be treated as reissued for OID purposes with OID
in an amount equal to the remaining interest payments thereon and would remain
OID instruments for as long as the Junior Subordinated Debentures remained
outstanding. Consequently, for U.S. Federal income tax purposes, holders of the
related Preferred Securities would be required to include their pro rata share
of OID in gross income as it accrues in advance of the receipt of cash
attributable to such interest income. Such holders would not receive the cash
related to such income if they dispose of the Preferred Securities prior to the
record date for payment of distributions thereafter. See "U.S. Federal Income
Tax Considerations -- U.S. Federal Income Tax Consequences of Holding Preferred
Securities -- Interest Income and Original Issue Discount" and "-- Sale of
Preferred Securities."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Preferred Securities may be
adversely affected. A holder that disposes of its Preferred Securities during a
Deferral Period, therefore, might not receive the same return on its investment
as a holder that continues to hold its Preferred Securities. In addition, as a
result of the existence of the Company's right to defer interest payments on the
Junior Subordinated Debentures the market price of the Preferred Securities may
be more volatile than the market prices of other securities on which original
issue discount accrues, that are not subject to such deferrals.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Tax Event (except in certain limited
circumstances) or Investment Company Event, the Company will cause the Issuer
Trustees to liquidate the Trust and cause Junior Subordinated Debentures to be
distributed pro rata to the holders of the Preferred Securities. In certain
limited circumstances upon the occurrence of a Tax Event, the Company will have
the right to redeem the Junior Subordinated Debentures, in whole, but not in
part, for the principal amount thereof plus accrued and unpaid interest thereon,
in lieu of a
14
<PAGE> 15
distribution of the Junior Subordinated Debentures, in which event the Preferred
Securities will be redeemed in whole at the liquidation amount of $27 per each
of the Preferred Securities plus accrued and unpaid Distributions. In the case
of a Tax Event, the Company may also elect to cause the Preferred Securities to
remain outstanding and pay Additional Sums on the Junior Subordinated
Debentures. See "Description of Preferred Securities -- Tax Event or Investment
Company Event Redemption or Distribution" and "Description of Junior
Subordinated Debentures -- Additional Sums."
There can be no assurance as to the market prices for the Preferred
Securities or for Junior Subordinated Debentures that may be distributed in
respect of the Preferred Securities if a liquidation of the Trust occurs.
Accordingly, the Preferred Securities, or the Junior Subordinated Debentures
that a holder of Preferred Securities may receive upon liquidation of the Trust,
may trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby. Because holders of Preferred Securities may
receive Junior Subordinated Debentures upon termination of the Trust,
prospective purchasers of Preferred Securities are also making an investment
decision with regard to the Junior Subordinated Debentures and should carefully
review all the information regarding the Junior Subordinated Debentures
contained herein. See "Description of Junior Subordinated Debentures."
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Company, as holder of all of the outstanding Common Securities, has the
right at any time to terminate the Trust and, after satisfaction of liabilities
to creditors of the Trust in accordance with applicable law, to cause the Junior
Subordinated Debentures to be distributed to the holders of the Preferred
Securities and Common Securities in liquidation of the Trust; provided, however,
that the Issuer Trustees shall have received an opinion of tax counsel to the
effect that holders of Preferred Securities will not recognize any income, gain
or loss on such distribution for U.S. Federal income tax purposes. The Junior
Subordinated Debentures, if distributed, may be subject to restrictions on
transfer as described under "Transfer Restrictions."
RIGHTS UNDER THE GUARANTEE
Firstar Bank will act as the Guarantee Trustee and will hold the Guarantee
for the benefit of the holders of the Preferred Securities. Firstar Bank will
also act as Debenture Trustee for the Junior Subordinated Debentures and as
Property Trustee under the Declaration. The Guarantee guarantees to the holders
of the Preferred Securities the following payments, to the extent not paid by
the Trust: (i) any accumulated and unpaid Distributions required to be paid on
the Preferred Securities, to the extent that the Trust has funds on hand
available therefor at such time; (ii) the Redemption Price with respect to any
Preferred Securities called for redemption, to the extent that the Trust has
funds on hand available therefor at such time; and (iii) upon a voluntary or
involuntary termination, dissolution or liquidation of the Trust (unless the
Junior Subordinated Debentures are distributed to holders of the Trust
Securities), the lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions to the date of payment, to the extent that
the Trust has funds on hand available therefor at such time, and (b) the amount
of assets of the Trust remaining available for distribution to holders of the
Preferred Securities on liquidation of the Trust. The Company's obligations
arising or accruing under the Guarantee will be general unsecured obligations
and will be subordinated as described under "Description of Guarantee -- Status
of the Guarantee." The holders of at least a majority in aggregate liquidation
amount of the outstanding Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of the Guarantee or to direct the exercise of
any trust power conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity. If the Company defaults on its obligation to pay
amounts payable under the Junior Subordinated Debentures, the Trust will lack
funds for the payment of Distributions or amounts payable on redemption of the
Preferred Securities or otherwise, and, in such event, holders of the Preferred
Securities will not be able to rely upon the Guarantee for payment of such
amounts. Instead, if a Debenture Event of Default has occurred and is continuing
and such event is attributable to the failure of the Company to pay any amounts
payable in respect of the Junior Subordinated Debentures on the payment date on
which such payment is due,
15
<PAGE> 16
then a holder of Preferred Securities may institute a legal proceeding directly
against the Company for enforcement of payment to such holder of any amounts
payable in respect of such Junior Subordinated Debentures having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder (a "Direct Action"). In connection with such Direct Action, the
Company will have a right of set-off under the Indenture to the extent of any
payment made by the Company to such holder of Preferred Securities in the Direct
Action. Except as described herein, holders of the Preferred Securities will not
be able to exercise directly any other remedy available to the holders of the
Junior Subordinated Debentures or assert directly any other rights in respect of
the Junior Subordinated Debentures. See "Description of Junior Subordinated
Debentures -- Debenture Events of Default" and "-- Enforcement of Certain Rights
by Holders of Preferred Securities" and "Description of Guarantee." The
Declaration provides that each holder of Preferred Securities by acceptance
thereof agrees to the provisions of the Guarantee and the Indenture.
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights relating
generally to the modification of the Preferred Securities and the Guarantee and
the exercise of the Trust's rights as holder of Junior Subordinated Debentures.
Holders of Preferred Securities will not be entitled to appoint, remove or
replace the Property Trustee or the Delaware Trustee except upon the occurrence
of certain events described herein. The Property Trustee and the Company may,
subject to certain conditions, amend the Declaration without the consent of any
holders of Preferred Securities to cure any ambiguity or to make other
provisions not inconsistent with existing provisions of the Declaration or to
ensure that the Trust will not be classified for U.S. Federal income tax
purposes as an association subject to taxation as a corporation or will be
classified as a grantor trust. See "Description of Preferred
Securities -- Voting Rights; Amendment of the Declaration" and "-- Removal of
Trustees."
TRADING CHARACTERISTICS OF THE PREFERRED SECURITIES
If the Preferred Securities are subject to the OID rules, a holder who
disposes of its Preferred Securities between record dates for payments of
Distributions thereon will be required to include OID on the Junior Subordinated
Debentures through the date of disposition in income as ordinary income, and to
add such amount to its adjusted tax basis. To the extent the selling price is
less than the holder's adjusted tax basis (which basis will include all accrued
but unpaid OID), a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for U.S. Federal income tax purposes. See "U.S. Federal Income Tax
Considerations."
PREFERRED SECURITIES RECEIVED IN THE EXCHANGE OFFER MAY BE TAXABLE AS A DIVIDEND
FOR U.S. FEDERAL INCOME TAX PURPOSES
The entire value of the Preferred Securities received in the Exchange Offer
may be treated as a dividend taxable as ordinary income. The likelihood of this
result may increase if a holder tenders less than all its Shares in the Exchange
Offer or because of proration in the Exchange Offer or both. See "U.S. Federal
Income Tax Considerations -- U.S. Federal Income Tax Consequences of the
Exchange Offer -- Tests for Capital Gain or Loss Treatment."
WITHHOLDING OF U.S. FEDERAL INCOME TAX TO FOREIGN HOLDERS
The Company will withhold U.S. Federal income tax at a rate of 30% in
connection with a foreign holder's exchange of Shares for Preferred Securities
pursuant to the Exchange Offer unless such foreign holder can demonstrate to the
Company that such withholding is not required. See "U.S. Federal Income Tax
Considerations -- U.S. Federal Income Tax Consequences of the Exchange
Offer -- Foreign Holders." The Company will follow the same procedure in
connection with Distributions paid on the Preferred Securities to foreign
holders. See "U.S. Federal Income Tax Considerations -- U.S. Federal Income Tax
Consequences of Holding Preferred Securities -- Foreign Holders."
16
<PAGE> 17
THE COMPANY
The Company is engaged in several different businesses including
residential and industrial plumbing and sewer, drain and pipe-cleaning services
through its wholly owned subsidiary, Roto-Rooter, Inc.; home healthcare services
through its wholly owned subsidiary, Patient Care, Inc.; and major appliance and
heating, ventilating and air conditioning repair through its wholly owned
subsidiary, Service America Systems, Inc.
Investors are encouraged to read the Company's 1998 Form 10-K and the
Company's Report on Form 10-Q for the quarter ended September 30, 1999 (the
"Third Quarter Form 10-Q"), which are incorporated herein by reference, for a
detailed description of the Company's business.
The Company's executive offices are located at 2600 Chemed Center, 255 East
Fifth Street, Cincinnati, Ohio 45202-4726, and its telephone number is (513)
762-6900.
RECENT DEVELOPMENTS
Reduction of Dividends. On November 3, 1999, the Board of Directors
declared a quarterly cash dividend of $0.53 per Share, payable on December 10,
1999, to stockholders of record on November 19, 1999. The Board of Directors
also adopted a new dividend policy for the year 2000 and beyond. The Board of
Directors expects to declare quarterly dividends in 2000 in the range of $0.10
per Share, down from the current rate of $0.53 per Share.
Certain Forecast Information. The Company expects to report earnings per
Share before capital gains of $1.60 in 1999 and currently projects earnings per
Share before capital gains of $2.05 in 2000. Neither the 1999 nor the 2000
forecast has been adjusted for the Exchange Offer.
The Company does not as a matter of course make public any forecasts as to
future performance or earnings. The Company expressly disclaims any obligation
to update these forecasts after the expiration or termination of the Exchange
Offer.
The forecasts were prepared by the Company and were not prepared with a
view to public disclosure or compliance with the published guidelines of the SEC
or the guidelines established by the American Institute of Certified Public
Accountants regarding projections or forecasts. THESE FORWARD-LOOKING STATEMENTS
ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THE FORECASTS. THE FORECASTS REFLECT NUMEROUS
ASSUMPTIONS (NOT ALL OF WHICH ARE STATED HERE), ALL MADE BY MANAGEMENT OF THE
COMPANY, WITH RESPECT TO INDUSTRY PERFORMANCE, GENERAL BUSINESS, ECONOMIC,
MARKET AND FINANCIAL CONDITIONS AND OTHER MATTERS, ALL OF WHICH ARE DIFFICULT TO
PREDICT, MANY OF WHICH ARE BEYOND THE COMPANY'S CONTROL. ACCORDINGLY, THERE CAN
BE NO ASSURANCE THAT THE ASSUMPTIONS MADE IN PREPARING THE FORECASTS WILL PROVE
ACCURATE, AND ACTUAL RESULTS MAY BE MATERIALLY GREATER OR LESS THAN THOSE
CONTAINED IN THE FORECASTS.
17
<PAGE> 18
SUMMARY FINANCIAL INFORMATION
The summary financial information presented below has been derived from the
consolidated financial statements and notes thereto as of and for the two year
period ended December 31, 1998, which are included in the Company's 1998 Form
10-K and the consolidated financial statements as of September 30, 1999 and for
the nine month periods ended September 30, 1999 and 1998, which are included in
the Company's Third Quarter Form 10-Q. The financial results as of and for the
year ended December 31, 1998 and the nine months ended September 30, 1999 have
also been presented below on a pro forma basis to give effect to the issuance of
the Preferred Securities in exchange for Shares pursuant to the Exchange Offer.
The 1998 pro forma balance sheet data gives effect to the Exchange Offer as if
the Exchange Offer had been completed as of December 31, 1998, and the 1998 pro
forma income statement data gives effect to the Exchange Offer as if the
Exchange Offer had been completed as of January 1, 1998. The September 30, 1999
pro forma balance sheet data gives effect to the Exchange Offer as if the
Exchange Offer had been completed as of September 30, 1999, and the September
30, 1999 pro forma income statement data gives effect to the Exchange Offer as
if the Exchange Offer had been completed as of January 1, 1999. The pro forma
financial information has been included for comparative purposes only and does
not purport to be indicative of the results which would have occurred if these
transactions had actually occurred on the dates or for the periods indicated or
which may occur in the future.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------ ------------------------------
PRO PRO
FORMA FORMA
1997 1998 1998(1) 1998 1999 1999(1)
-------- -------- -------- -------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA AND
THE RATIO OF EARNINGS TO FIXED CHARGES)
<S> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Service revenues and sales................ $341,729 $381,283 $381,283 $279,872 $326,313 $326,313
======== ======== ======== ======== ======== ========
Income from continuing operations before
distributions on Company-obligated
Preferred Securities of the Trust....... $ 17,077 $ 19,909 $ 19,909 $ 16,509 $ 14,881 $ 14,881
Distributions on Company-obligated
Preferred Securities of the
Trust(2)(3)............................. -- -- (2,404) -- -- (1,803)
-------- -------- -------- -------- -------- --------
Income from continuing operations......... 17,077 19,909 17,505 16,509 14,881 13,078
Discontinued operations................... 13,160 -- -- -- -- --
-------- -------- -------- -------- -------- --------
Net income................................ $ 30,237 $ 19,909 $ 17,505 $ 16,509 $ 14,881 $ 13,078
======== ======== ======== ======== ======== ========
PER SHARE DATA
Earnings per Share:
Income from continuing operations....... $ 1.72 $ 1.98 $ 2.17 $ 1.65 $ 1.42 $ 1.54
Net income.............................. 3.04 1.98 2.17 1.65 1.42 1.54
Average Shares outstanding.............. 9,940 10,058 8,058 9,999 10,476 8,476
Diluted earnings per Share:
Income from continuing operations....... $ 1.71 $ 1.97 $ 2.08 $ 1.64 $ 1.41 $ 1.49
Net income.............................. 3.02 1.97 2.08 1.64 1.41 1.49
Average Shares outstanding.............. 10,014 10,100 9,559 10,041 10,519 9,978
Book value per Share...................... $ 22.64 $ 21.45 $ 20.13 $ 22.53 $ 20.56 $ 19.03
BALANCE SHEET DATA
Working capital........................... $ 83,103 $ 33,533 $ 33,533 $ 70,929 $ 23,098 $ 23,098
Total assets less goodwill................ 305,835 273,739 273,739 278,993 256,006 256,006
Total assets.............................. 448,838 429,704 429,704 431,108 420,093 420,093
Long-term debt............................ 83,720 80,407 80,407 82,079 84,764 84,764
Company-obligated Preferred Securities of
the Trust(2)(4)......................... -- -- 54,000 -- -- 54,000
Stockholders' equity...................... 228,120 223,356 169,356 224,027 214,782 160,782
RATIO OF EARNINGS TO FIXED CHARGES.......... 3.64 5.52 3.53 6.03 5.82 3.67
</TABLE>
18
<PAGE> 19
NOTES TO SUMMARY FINANCIAL INFORMATION
(1) Assumes that 2,000,000 Shares are exchanged for 2,000,000 Preferred
Securities.
(2) The assets of the Trust will consist principally of the Junior Subordinated
Debentures, and payments under the Junior Subordinated Debentures will be
the sole revenue of the Trust. The Trust exists for the exclusive purposes
of (i) issuing the Trust Securities representing undivided beneficial
interests in the assets of the Trust, (ii) investing the gross proceeds of
the Trust Securities in the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto.
Upon redemption of the Junior Subordinated Debentures, the Preferred
Securities will be mandatorily redeemed. The payment of Distributions by the
Trust and payments on liquidation of the Trust and the redemption of
Preferred Securities are guaranteed by the Company. See "Description of
Guarantee."
(3) Assumes that interest payments on the Junior Subordinated Debentures are
deductible for tax purposes and takes such deduction into account.
Distributions on the Preferred Securities will accrue at the annual rate of
$2.00 per Preferred Security.
(4) The liquidation amount per Preferred Security is $27.
19
<PAGE> 20
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Company and its consolidated subsidiaries which should be read in conjunction
with the Company's consolidated financial statements as of and for the nine
months ended September 30, 1999, which are included in the Company's Third
Quarter Form 10-Q.
<TABLE>
<CAPTION>
SEPTEMBER 30, 1999
----------------------------
HISTORICAL AS ADJUSTED(1)
---------- --------------
(DOLLARS IN THOUSANDS,
EXCEPT FOR SHARE AND PER
SHARE DATA)
<S> <C> <C>
TOTAL LONG-TERM DEBT........................................ $ 86,799 $ 86,799
-------- ---------
COMPANY-OBLIGATED PREFERRED SECURITIES OF THE TRUST(2)(3)... -- 54,000
-------- ---------
STOCKHOLDERS' EQUITY
Capital Stock -- authorized 15,000,000 Shares $1 par;
issued 13,664,892 Shares............................... 13,665 13,665
Paid-in capital........................................... 164,533 164,533
Retained earnings......................................... 145,083 145,083
Treasury stock -- 3,216,823 (as adjusted -- 5,216,823)
Shares, at cost........................................ (98,047) (152,047)
Unearned compensation..................................... (18,049) (18,049)
Deferred compensation payable in company stock............ 5,250 5,250
Accumulated other comprehensive income.................... 2,347 2,347
-------- ---------
Total stockholders' equity............................. 214,782 160,782
-------- ---------
Total capitalization................................... $301,581 $ 301,581
======== =========
</TABLE>
- ---------------
(1) Assumes that 2,000,000 Shares are exchanged for 2,000,000 Preferred
Securities.
(2) The assets of the Trust will consist principally of the Junior Subordinated
Debentures, and payments under the Junior Subordinated Debentures will be
the sole revenue of the Trust. The Trust exists for the exclusive purposes
of (i) issuing the Trust Securities representing undivided beneficial
interests in the assets of the Trust, (ii) investing the gross proceeds of
the Trust Securities in the Junior Subordinated Debentures and (iii)
engaging in only those other activities necessary or incidental thereto.
Upon redemption of the Junior Subordinated Debentures, the Preferred
Securities will be mandatorily redeemed. The payment of Distributions by the
Trust and payments on liquidation of the Trust and the redemption of
Preferred Securities are guaranteed by the Company. See "Description of
Guarantee."
(3) The liquidation amount per Preferred Security is $27.
20
<PAGE> 21
MARKET AND PRICE RANGES OF CAPITAL STOCK; DIVIDENDS
The Capital Stock (symbol CHE) is listed and traded on the NYSE. The table
that follows sets forth, for the calendar quarters indicated, the reported high
and low closing sales prices of the Capital Stock on the NYSE Composite Tape,
and dividends paid per Share:
<TABLE>
<CAPTION>
HIGH LOW DIVIDENDS
------ ------ ---------
<S> <C> <C> <C>
1997:
First Quarter............................................. $37.50 $35.50 $0.52
Second Quarter............................................ 37.44 31.50 0.52
Third Quarter............................................. 39.31 35.06 0.52
Fourth Quarter............................................ 43.00 38.06 0.53
1998:
First Quarter............................................. 42.31 38.00 0.53
Second Quarter............................................ 41.25 32.56 0.53
Third Quarter............................................. 34.69 25.56 0.53
Fourth Quarter............................................ 34.88 28.13 0.53
1999:
First Quarter............................................. 33.81 25.75 0.53
Second Quarter............................................ 33.88 26.31 0.53
Third Quarter............................................. 33.44 29.25 0.53
Fourth Quarter (through December 20, 1999)................ 30.13 24.94 0.53
</TABLE>
On December 20, 1999, the reported closing sales price of the Capital Stock
on the NYSE Composite Tape was $27.94 per share. HOLDERS ARE URGED TO OBTAIN A
CURRENT MARKET QUOTATION FOR THE CAPITAL STOCK. On December 20, 1999, there were
approximately 10,398,781 holders of record of the Capital Stock.
On November 3, 1999, the Board of Directors declared a quarterly cash
dividend of $0.53 per Share, payable on December 10, 1999, to stockholders of
record on November 19, 1999. The Board of Directors also adopted a new dividend
policy for the year 2000 and beyond. The Board of Directors expects to declare
quarterly dividends in 2000 in the range of $0.10 per Share, down from the
current rate of $0.53 per Share.
21
<PAGE> 22
PURPOSES AND EFFECTS OF THE EXCHANGE OFFER
PURPOSES
On November 3, 1999, the Board of Directors adopted a new dividend policy,
pursuant to which it expects to declare reduced quarterly dividends on the
Shares in 2000 and beyond. The purpose of the Exchange Offer is to offer holders
of Shares who prefer not to continue in an equity position as holders of Shares
the opportunity to obtain a higher yield on their investment in the Company
through the exchange of their Shares for Preferred Securities. The Company
expects the Exchange Offer to result in certain tax efficiencies by enabling it
to deduct interest payable on the Junior Subordinated Debentures for U.S.
Federal income tax purposes; dividends payable on the Capital Stock are not
deductible. Because the conversion price of the Preferred Securities is higher
than the current trading price of the Shares, holders of the Preferred
Securities have reduced participation in any growth in the value of the Shares.
CERTAIN EFFECTS
The exchange of Preferred Securities for Shares pursuant to the Exchange
Offer will reduce the number of outstanding Shares and the number of holders of
such Shares.
In the event there are fewer than 300 holders of Shares as a result of the
Exchange Offer, the Shares would become eligible for termination of registration
under the Exchange Act.
In addition, the exchange of the Shares pursuant to the Exchange Offer will
reduce the number of outstanding Shares and the number of holders of Shares.
Consequently, the Shares may no longer meet the requirements of the NYSE for
continued listing. According to the NYSE's published guidelines, the NYSE would
consider delisting the Shares if, among other things, the total number of
holders of Shares (including both holders of record and beneficial holders of
Shares held in the name of NYSE member organizations) were to fall below 400,
such number of total holders were to fall below 1,200 and the average monthly
trading volume of the Shares were to fall below 100,000, the number of publicly
held Shares (exclusive of management or other concentrated holdings) were to
fall below 600,000, the aggregate market value of publicly held Shares were not
to exceed $8 million or the aggregate market value of Shares outstanding
(excluding treasury stock) were not to exceed $12 million. If, as a result of
the exchange of Shares pursuant to the Exchange Offer, the Capital Stock no
longer meets the requirements of the NYSE for continued listing and the NYSE
were to delist the Capital Stock, the market therefor could be adversely
affected. The Company does not expect that, following the Exchange Offer, the
NYSE will delist the Capital Stock.
NEITHER THE COMPANY NOR THE BOARD OF DIRECTORS MAKES ANY RECOMMENDATION AS
TO WHETHER ANY HOLDER OF CAPITAL STOCK SHOULD TENDER ANY OF OR ALL SUCH HOLDER'S
SHARES PURSUANT TO THE EXCHANGE OFFER. EACH HOLDER MUST MAKE SUCH HOLDER'S OWN
DECISION WHETHER OR NOT TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO TENDER.
AS OF THE DATE OF THIS OFFERING CIRCULAR, EXECUTIVE OFFICERS AND DIRECTORS OF
THE COMPANY DO NOT INTEND TO TENDER SHARES IN THE EXCHANGE OFFER.
Rule 13e-4 under the Exchange Act generally prohibits the Company, the
Trust and their affiliates from purchasing any Shares, other than pursuant to
the Exchange Offer, or any Preferred Securities for at least ten business days
after the Expiration Date.
22
<PAGE> 23
THE EXCHANGE OFFER
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth herein and in the
Letter of Transmittal, the Trust will exchange its Preferred Securities for up
to 2,000,000 of the outstanding Shares. The Exchange Offer will be effected on a
basis of one Preferred Security for each Share validly tendered and accepted for
exchange. See "-- Procedures for Tendering Shares." Upon the terms and subject
to the conditions set forth herein and in the Letter of Transmittal, the Company
and the Trust will accept up to 2,000,000 Shares validly tendered and not
withdrawn prior to the Expiration Date and, unless the Exchange Offer has been
withdrawn or terminated, will deliver Preferred Securities in exchange therefor
to tendering holders of Shares as promptly as practicable following the
Expiration Date. The Company and the Trust expressly reserve the right, in their
sole discretion, to delay acceptance for exchange of Shares tendered under the
Exchange Offer and the delivery of the Preferred Securities with respect to the
Shares accepted for exchange (subject to Rules 13e-4 and 14e-1 under the
Exchange Act, which require that the Company and the Trust consummate the
Exchange Offer or return the Shares deposited by or on behalf of the holders
thereof promptly after the termination or withdrawal of the Exchange Offer), or
to amend, withdraw or terminate the Exchange Offer at any time prior to the
Expiration Date for any of the reasons set forth in "-- Conditions to the
Exchange Offer" and "-- Expiration Date; Extensions; Amendments; Termination."
In all cases, except to the extent waived by the Company and the Trust,
delivery of Preferred Securities issued with respect to the Shares accepted for
exchange pursuant to the Exchange Offer will be made only after timely receipt
by the Exchange Agent of Shares (or confirmation of book-entry transfer
thereof), a properly completed and duly executed Letter of Transmittal or, in
the case of a book-entry transfer, an Agent's Message, and any other required
documents.
As of December 20, 1999, there were 10,398,781 Shares outstanding. This
Offering Circular, together with the Letter of Transmittal, is being sent to all
registered holders of Shares as of December 20, 1999, including the Company's
Employee Stock Ownership Plan (the "ESOP"). However, under applicable law, the
ESOP may not hold the Preferred Securities and thus will not tender Shares in
the Exchange Offer. See "Certain ERISA Considerations."
The Company and the Trust shall be deemed to have accepted tendered Shares
when, as and if the Company and the Trust have given oral or written notice
thereof to the Exchange Agent. The Exchange Agent will act as agent for the
tendering holders for the purpose of receiving Shares from tendering holders who
are participating in the Exchange Offer. Firstar Bank will remit Preferred
Securities to such tendering holders. Upon the terms and subject to the
conditions of the Exchange Offer, delivery of Preferred Securities to tendering
holders will be made as promptly as practicable following the Expiration Date.
If proration of tendered Shares is required, because of the difficulty in
determining the number of Shares validly tendered (including Shares tendered by
the guaranteed delivery procedures described in "-- Procedures for Tendering
Shares"), the Company and the Trust do not expect that they will be able to
announce the final proration factor or to commence the exchange for any Shares
pursuant to the Exchange Offer until approximately five Business Days after the
Expiration Date. Preliminary results of the proration will be announced by press
release as promptly as practicable after the Expiration Date. Holders of Shares
may obtain such preliminary information from the Information Agent and may also
be able to obtain such information from their brokers.
Until the final proration factor is known, the Trust will not issue any
Preferred Securities in exchange for any Shares accepted for exchange pursuant
to the Exchange Offer or return Shares delivered to the Exchange Agent but not
tendered or return Shares tendered but not accepted for exchange because of
proration. See "-- Acceptance of Shares and Proration."
If any tendered Shares are not accepted for exchange because of an invalid
tender, proration, the occurrence of certain other events set forth herein or
otherwise, unless otherwise requested by the Holder under "Special Delivery
Instructions" in the Letter of Transmittal, such Shares will be returned, at the
Company's expense, to the tendering Holder thereof (or in the case of Shares
tendered by book-entry transfer into the Exchange Agent's
23
<PAGE> 24
account at The Depository Trust Company ("DTC" or the "Book-Entry Transfer
Facility"), such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility designated by the participant therein who so
delivered such Shares), as promptly as practicable after the Expiration Date or
the withdrawal or termination of the Exchange Offer.
Holders of Shares will not have any appraisal or dissenters' rights under
the Delaware General Corporation Law in connection with the Exchange Offer.
Holders who tender Shares in the Exchange Offer will not be required to pay
brokerage commissions or fees or, subject to the instructions in the Letter of
Transmittal, transfer taxes with respect to the exchange of Shares pursuant to
the Offer.
CONDITIONS TO THE EXCHANGE OFFER
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Trust will not be required to deliver
Preferred Securities in respect of any properly tendered Shares and may
terminate the Exchange Offer by oral or written notice to the Exchange Agent and
the holders of Shares, or, at its option, may modify or otherwise amend the
Exchange Offer with respect to such Shares if any of the following conditions
are not satisfied at or prior to the Expiration Date in the case of clauses (a)
and (b) below or if any of the events specified in clauses (c) through (f)
occurs at or prior to the Expiration Date, whether prior to or simultaneously
with the expiration of the Exchange Offer:
(a) a sufficient number of Shares shall have been tendered to satisfy
the Minimum Distribution Condition;
(b) the Declaration, the Indenture and the Guarantee shall have been
qualified under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act");
(c) the daily closing sales price of the Shares, as reported by the
NYSE, shall not exceed $30 or be less than $24;
(d) there shall not have been any action taken or threatened, or any
statute, rule, regulation, judgment, order, stay, decree or injunction
promulgated, enacted, entered, enforced or deemed applicable to the
Exchange Offer, by or before any court or governmental regulatory or
administrative agency or authority or tribunal, domestic or foreign, which
(i) challenges the making of the Exchange Offer, or might directly or
indirectly prohibit, prevent, restrict or delay consummation of the
Exchange Offer, or otherwise and adversely affect in any material manner
the Exchange Offer, or (ii) could materially adversely affect the business,
condition (financial or otherwise), income, operations, properties, assets,
liabilities or prospects of the Company and its subsidiaries, taken as a
whole or materially impair the contemplated benefits of the Exchange Offer
to the Company;
(e) there shall not have occurred or be likely to occur any event
affecting the business or financial affairs of the Company that would or
might prohibit, prevent, restrict or delay consummation of the Exchange
Offer or that will, or is reasonably likely to, materially impair the
contemplated benefits of the Exchange Offer or might be material to holders
of Shares in deciding whether to accept the Exchange Offer; and
(f) there shall not have occurred (i) any general suspension of or
limitation on trading in securities on the NYSE or in the over-the-counter
market (whether or not mandatory), (ii) any significant adverse change in
the price of the Shares or in the United States securities or financial
markets, (iii) a material impairment in the trading market for debt or
equity securities, (iv) a declaration of a banking moratorium or any
suspension of payments in respect of banks by federal or state authorities
in the United States (whether or not mandatory), (v) a commitment of a war,
armed hostilities or other national or international crisis directly or
indirectly relating to the United States, (vi) any limitation (whether or
not mandatory) by any governmental authority on, or other event having a
reasonable likelihood of affecting, the extension of credit by banks or
other lending institutions in the United States or (vii) any significant
adverse change in United States
24
<PAGE> 25
securities or financial markets generally or in the case of any of the
foregoing existing at the time of the commencement of the Exchange Offer, a
material acceleration or worsening thereof.
The foregoing conditions are for the sole benefit of the Company and the
Trust and may be waived by the Company and the Trust, in whole or in part, in
their sole discretion.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The Exchange Offer will expire on the Expiration Date. The Company and the
Trust expressly reserve the right, in their sole discretion, subject to
applicable law, to (i) terminate the Exchange Offer, and not accept for exchange
any Shares and promptly return all Shares upon the failure of any of the
conditions specified above in "-- Conditions to the Exchange Offer," (ii) waive
any condition to the Exchange Offer and accept Shares previously tendered
pursuant to the Exchange Offer, (iii) extend the Expiration Date of the Exchange
Offer and retain all Shares tendered pursuant to such Exchange Offer until the
Expiration Date, subject, however, to all withdrawal rights of holders, (iv)
amend the terms of the Exchange Offer or (v) modify the form of the
consideration to be paid pursuant to the Exchange Offer or (vi) not accept for
exchange the Shares at any time on or prior to the Expiration Date, for any
reason. Any amendment applicable to the Exchange Offer will apply to all Shares
tendered pursuant to the Exchange Offer. During any extension of the Exchange
Offer, all Shares previously tendered pursuant to the Exchange Offer and not
withdrawn will remain subject to the Exchange Offer.
If the Company and the Trust make a material change in the terms of the
Exchange Offer, the Company and the Trust will extend the Exchange Offer. The
minimum period for which the Exchange Offer will be extended following a
material change, other than a change in the amount of Shares sought for
exchange, will depend upon the facts and circumstances, including the relative
materiality of the change. With respect to an increase or decrease in the number
of Shares sought in the Exchange Offer or an increase or decrease in the
consideration offered to holders of Shares, if required, the Exchange Offer will
remain open for a minimum of ten Business Days following public announcement of
such change. In the case of any amendment, withdrawal or termination of the
Exchange Offer, a public announcement will be issued no later than 9:00 a.m.,
New York City time, on the next business day after the previously scheduled
Expiration Date of the Exchange Offer subject to such extension. If the Trust
and the Company withdraw or terminate the Exchange Offer, they will give
immediate notice to the Exchange Agent, and all Shares theretofore tendered
pursuant to the Exchange Offer will be returned promptly to the tendering
Holders thereof. See "-- Withdrawal of Tenders."
PROCEDURES FOR TENDERING SHARES
The tender of Shares by a Holder thereof pursuant to one of the procedures
set forth below will constitute an agreement between such Holder and the Trust
in accordance with the terms and subject to the conditions set forth herein and
in the Letter of Transmittal.
Each Holder of Shares wishing to participate in the Exchange Offer must
(i)(a) properly complete and sign the Letter of Transmittal in accordance with
the instructions contained herein and in the Letter of Transmittal, together
with any required signature guarantees, and deliver the same to the Exchange
Agent, at its address set forth on the back cover page hereof prior to the
Expiration Date and certificates for the Shares must be received by the Exchange
Agent at such address or (b) transfer such Shares pursuant to the procedures for
book-entry transfer described below and a confirmation of such book-entry
transfer must be received by the Exchange Agent, in each case prior to the
Expiration Date, or (ii) comply with the guaranteed delivery procedures
described below.
LETTERS OF TRANSMITTAL, SHARES AND ANY OTHER REQUIRED DOCUMENTS SHOULD BE
SENT ONLY TO THE EXCHANGE AGENT, NOT TO THE TRUST OR THE COMPANY.
THE METHOD OF DELIVERY OF SHARES AND ALL OTHER DOCUMENTS IS AT THE ELECTION
AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL,
RETURN RECEIPT REQUESTED, BE USED, INSURANCE BE OBTAINED, AND THE MAILING BE
MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT DELIVERY TO THE
EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.
25
<PAGE> 26
Special Procedures for Beneficial Owners. Any beneficial owner whose Shares
are registered in the name of a broker, dealer, commercial bank, trust company
or other nominee and who wishes to tender should contact such registered Holder
promptly and instruct such registered Holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on its own behalf,
such owner must, prior to completing and executing the Letter of Transmittal and
delivering its Shares, either make appropriate arrangements to register
ownership of the Shares in such owner's name or obtain a properly completed
stock power from the registered Holder. The transfer of registered ownership may
take considerable time and may not be able to be completed prior to the
Expiration Date.
Signature Guarantees. If tendered Shares are registered in the name of the
signer of the Letter of Transmittal and the Preferred Securities to be issued in
exchange therefor are to be issued (and any untendered Shares are to be
reissued) in the name of the registered Holder, the signature of such signer
need not be guaranteed. If the tendered Shares are registered in the name of
someone other than the signer of the Letter of Transmittal, or if Preferred
Securities issued in exchange therefor are to be issued in the name of any
person other than the signer of the Letter of Transmittal, such tendered Shares
must be endorsed or accompanied by written instruments of transfer in form
satisfactory to the Trust and duly executed by the registered Holder, and the
signature on the endorsement or instrument of transfer must be guaranteed by a
financial institution (including most banks, savings and loans associations and
brokerage houses) that is a participant in the Securities Transfer Agents
Medallion Program, the New York Stock Exchange Medallion Signature Program or
the Stock Exchange Medallion Program (any of the foregoing hereinafter referred
to as an "Eligible Institution"). If the Preferred Securities and/or the Shares
are not exchanged or are to be delivered to an address other than that of the
registered Holder appearing on the register for the Shares, the signature in the
Letter of Transmittal must be guaranteed by an Eligible Institution.
Book-Entry Transfer. The Exchange Agent will make a request promptly after
the date of this Offering Circular to establish accounts with respect to the
Shares at the Book-Entry Transfer Facility for the purpose of facilitating the
Exchange Offer, and subject to the establishment thereof, any financial
institution that is a participant in the Book-Entry Transfer Facility's system
may make book-entry delivery of Shares by causing the Book-Entry Transfer
Facility to transfer such Shares into the Exchange Agent's account with respect
to the Shares in accordance with such Book-Entry Transfer Facility's Automated
Tender Offer Program ("ATOP") procedures for such book-entry transfers. However,
the exchange for the Shares so tendered will only be made after timely
confirmation (a "Book-Entry Confirmation") of such Book-Entry Transfer of Shares
into the Exchange Agent's account, and timely receipt by the Exchange Agent of
an Agent's Message, or a Letter of Transmittal, and any other documents required
by the Letter of Transmittal. The term "Agent's Message" means a message,
transmitted by the Book-Entry Transfer Facility and received by the Exchange
Agent and forming a part of a Book-Entry Confirmation, which states that such
Book-Entry Transfer Facility has received an express acknowledgment from a
participant tendering Shares that is the subject of such Book-Entry Confirmation
that such participant has received and agrees to be bound by the terms of the
Letter of Transmittal, and that the Company and the Trust may enforce such
agreement against such participant.
Guaranteed Delivery. If a Holder desires to participate in the Exchange
Offer and time will not permit a Letter of Transmittal or Shares to reach the
Exchange Agent before the Expiration Date or the procedure for book-entry
transfer cannot be completed on a timely basis, a tender may be effected if the
Exchange Agent has received at its address on the back cover page hereof prior
to the Expiration Date, a letter, telegram or facsimile transmission from an
Eligible Institution setting forth the name and address of the tendering Holder,
the name(s) in which the Shares are registered and, if the Shares are held in
certificated form, the certificate numbers of the Shares to be tendered, and
stating that the tender is being made thereby and guaranteeing that within three
NYSE trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, the Shares in proper form
for transfer together with a properly completed and duly executed Letter of
Transmittal (and any other required documents), or a confirmation of book-entry
transfer of such Shares into the Exchange Agent's account at the Book-Entry
Transfer Facility, will be delivered by such Eligible Institution. Unless the
Shares being tendered by the above-described method are deposited with the
Exchange Agent within the time period set forth above (accompanied or preceded
by a properly completed Letter of Transmittal and any
26
<PAGE> 27
other required documents) or a confirmation of book-entry transfer of such
Shares into the Exchange Agent's account at the Book-Entry Transfer Facility in
accordance with such Book-Entry Transfer Facility's ATOP procedures is received,
the Company and the Trust may, at their option, reject the tender.
Miscellaneous. All questions as to the validity, form, eligibility
(including time of receipt) and acceptance for exchange of any tender of Shares
will be determined by the Trust, whose determination will be final and binding.
The Company and the Trust reserve the absolute right to reject any or all
tenders not in proper form or the acceptance for exchange of which may, in the
opinion of their counsel, be unlawful. The Company and the Trust also reserve
the absolute right to waive any defect or irregularity in the tender of any
Shares, and the Trust's interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding. None of the Trust, the Company, the Exchange Agent or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.
Tenders of Shares involving any irregularities will not be deemed to have
been made until such irregularities have been cured or waived. Shares received
by the Exchange Agent that are not validly tendered and as to which the
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering Holder (or in the case of Shares tendered by book-entry
transfer into the Exchange Agent's account at the Book-Entry Transfer Facility,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility designated by the participant therein who so delivered such Shares),
unless otherwise requested by the Holder in the Letter of Transmittal, as
promptly as practicable after the Expiration Date or the withdrawal or
termination of the Exchange Offer.
LETTER OF TRANSMITTAL
The Letter of Transmittal contains, among other things, the following terms
and conditions, which are part of the Exchange Offer.
The party tendering Shares for exchange (the "Transferor") exchanges,
assigns and transfers the Shares to the Trust, and irrevocably constitutes and
appoints the Exchange Agent as the Transferor's agent and attorney-in-fact to
cause the Shares to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer the Shares and to acquire Preferred Securities
issuable upon the exchange of such tendered Shares and that, when such
Transferor's Shares are accepted for exchange, the Trust will acquire good and
unencumbered title to such tendered Shares, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim. The
Transferor also warrants that it will, upon request, execute and deliver any
additional documents deemed by the Trust to be necessary or desirable to
complete the exchange, assignment and transfer of tendered Shares or transfer
ownership of such Shares on the account books maintained by the Book-Entry
Transfer Facility. All authority conferred by the Transferor will survive the
death, bankruptcy or incapacity of the Transferor and every obligation of the
Transferor shall be binding upon the heirs, legal representatives, successors,
assigns, executors and administrators of such Transferor.
WITHDRAWAL OF TENDERS
Tenders of Shares pursuant to the Exchange Offer may be withdrawn at any
time prior to the Expiration Date and, unless accepted for exchange by the
Trust, may be withdrawn at any time after February 22, 2000.
To be effective, a written notice of withdrawal delivered by mail, hand
delivery or facsimile transmission must be timely received by the Exchange Agent
at its address set forth on the back cover page hereof. The method of
notification is at the risk and election of the Holder. Any such notice of
withdrawal must specify (i) the Holder named in the Letter of Transmittal as
having tendered Shares to be withdrawn, (ii) if the Shares are held in
certificated form, the certificate numbers of the Shares to be withdrawn, (iii)
that such Holder is withdrawing its election to have such Shares exchanged and
(iv) the name of the registered Holder of such Shares, and must be signed by the
Holder in the same manner as the original signature on the Letter of Transmittal
(including any required signature guarantees) or be accompanied by evidence
satisfactory to the Company and the Trust that the
27
<PAGE> 28
person withdrawing the tender has succeeded to the beneficial ownership of the
Shares being withdrawn. The Exchange Agent will return the properly withdrawn
Shares promptly following receipt of notice of withdrawal. If Shares have been
tendered pursuant to the procedures for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at the Book-Entry
Transfer Facility to be credited with the withdrawn Shares and otherwise comply
with such Book-Entry Transfer Facility procedures. All questions as to the
validity of notice of withdrawal, including time of receipt, will be determined
by the Company and the Trust, and such determination will be final and binding
on all parties. Withdrawals of tenders of Shares may not be rescinded and any
Shares withdrawn will thereafter be deemed not validly tendered for purposes of
the Exchange Offer. Properly withdrawn Shares, however, may be retendered by
following the procedures therefor described elsewhere herein at any time prior
to the Expiration Date. See "-- Procedures for Tendering Shares."
ACCEPTANCE OF SHARES AND PRORATION
Upon the terms and subject to the conditions of the Exchange Offer, if
2,000,000 or fewer Shares have been validly tendered and not withdrawn prior to
the Expiration Date, the Trust will accept for exchange all such Shares. Upon
the terms and subject to the conditions of the Exchange Offer, if more than
2,000,000 Shares have been validly tendered and not withdrawn prior to the
Expiration Date, the Trust will accept for exchange Shares from each tendering
Holder on a pro rata basis. Fractional Shares resulting from proration will be
rounded up or down, as appropriate, to the nearest full Share before being
accepted for exchange.
All Shares not accepted pursuant to the Exchange Offer, including Shares
not purchased because of proration, will be returned to the tendering Holders,
at the Company's expense, as promptly as practicable following the Expiration
Date.
ODD LOTS; DIVIDEND REINVESTMENT PLAN
If the Company and the Trust accept fewer than all Shares validly tendered
before the Expiration Date and not withdrawn, whether because of proration or
otherwise, the Shares accepted first will consist of all Shares tendered by any
record or beneficial holder of an aggregate of fewer than 100 Shares (an "Odd
Lot Holder"), including any Shares held in the Company's Dividend Reinvestment
Plan (the "Dividend Reinvestment Plan"). Beneficial holders of 100 or more
Shares are not eligible for this preference, even if such holders have separate
stock certificates or accounts representing fewer than 100 Shares.
Fractional Shares are not eligible for exchange in the Exchange Offer.
Participants in the Dividend Reinvestment Plan should note that if at any time a
participant's ownership of Capital Stock falls below 25 Shares, such participant
will be automatically terminated from the Dividend Reinvestment Plan. A
participant in the Dividend Reinvestment Plan who is also an Odd Lot Holder and
who completes the boxes captioned "Dividend Reinvestment Plan Shares" and "Odd
Lots" in the Letter of Transmittal should note that any fractional Share
remaining in the participant's account in the Dividend Reinvestment Plan upon
completion of the Exchange Offer will be sold by the administrator of the
Dividend Reinvestment Plan. The proceeds of such sale will be remitted to the
participant following the participant's termination from the Dividend
Reinvestment Plan in accordance with the administrator's usual procedures and
the terms and conditions of the Dividend Reinvestment Plan.
28
<PAGE> 29
INFORMATION AGENT AND EXCHANGE AGENT
D.F. King & Co., Inc. has been retained as the Information Agent to assist
in connection with the Exchange Offer. Questions and requests for assistance
regarding the Exchange Offer, requests for additional copies of this Offering
Circular, the Letter of Transmittal and requests for Notice of Guaranteed
Delivery may be directed to the Information Agent, telephone: (800) 848-2998. If
calling from outside the U.S. or Canada, call collect: (212) 269-5550.
Norwest Bank Minnesota, N.A. has been appointed as Exchange Agent for the
Exchange Offer.
By Mail:
Norwest Bank Minnesota, N.A.
P.O. Box 64858
St. Paul, Minnesota 55164-0858
Attention: Reorganization Department
By Hand or Overnight Courier:
Norwest Bank Minnesota, N.A.
161 North Concord Exchange Street
South St. Paul, Minnesota 55075-1139
Attention: Reorganization Department
By Facsimile Transmission
(For Eligible Institutions Only):
(651) 450-4163
Confirm Receipt of Notice of Guaranteed Delivery
by Telephone:
(651) 450-4110
The Company will pay the Information Agent and Exchange Agent reasonable
and customary fees for their services and will reimburse them for all their
reasonable out-of-pocket expenses in connection therewith.
29
<PAGE> 30
CHEMED CAPITAL TRUST
Chemed Capital Trust is a statutory business trust that was formed under
Delaware law on December 21, 1999. The Trust's original declaration of trust
will be amended and restated in its entirety by the Company, as sponsor of the
Trust, and the trustees of the Trust (the "Issuer Trustees") (as so amended and
restated, the "Declaration"), as of or prior to the date the Trust issues the
Trust Securities representing undivided beneficial interests in the assets of
the Trust and invests the gross proceeds of the Trust Securities in the Junior
Subordinated Debentures. The Company will directly or indirectly acquire Common
Securities in an aggregate liquidation amount equal to 3% of the total capital
of the Trust. Payment on the Common Securities will be made pro rata with the
Preferred Securities except that upon the occurrence and during the continuance
of an event of default under the Declaration, the rights of the holders of the
Common Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise will be subordinated to the rights of the
holders of the Preferred Securities. The assets of the Trust will consist
principally of the Junior Subordinated Debentures, and payments under the Junior
Subordinated Debentures will be the sole revenue of the Trust. The Trust exists
for the exclusive purposes of (i) issuing the Trust Securities representing
undivided beneficial interests in the assets of the Trust, (ii) investing the
gross proceeds of the Trust Securities in the Junior Subordinated Debentures and
(iii) engaging in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Issuer Trustees will initially
be five. Three of the Issuer Trustees (the "Administrative Trustees") will be
individuals who are employees or officers of or who are affiliated with the
Company. The fourth trustee will be a financial institution that is unaffiliated
with the Company (the "Property Trustee"). The fifth trustee will be an entity
which maintains its principal place of business in the State of Delaware (the
"Delaware Trustee"). Initially, Firstar Bank will act as Property Trustee and
First Union Trust Company will act as Delaware Trustee until, in each case,
removed or replaced by the holder of the Common Securities. Firstar Bank will
also act as indenture trustee under the Guarantee (the "Guarantee Trustee") and
under the Indenture (the "Debenture Trustee"). See "Description of Guarantee"
and "Description of Junior Subordinated Debentures." In certain circumstances,
the holders of a majority of the Preferred Securities will be entitled to
appoint one additional trustee of the Trust (a "Special Trustee"), who need not
be an officer or employee of or otherwise affiliated with the Company, who will
have the same rights, powers and privileges as the Administrative Trustees. See
"Description of Preferred Securities -- Voting Rights; Amendment of the
Declaration."
The Property Trustee will hold title to the Junior Subordinated Debentures
for the benefit of the holders of the Trust Securities and the Property Trustee
will have the power to exercise all rights, powers and privileges under the
Indenture as the holder of the Junior Subordinated Debentures. In addition, the
Property Trustee will maintain exclusive control of a segregated non-interest
bearing bank account (the "Property Account") to hold all payments made in
respect of the convertible Junior Subordinated Debentures for the benefit of the
holders of the Trust Securities. The Guarantee Trustee will hold the Guarantee
for the benefit of the holders of the Preferred Securities. Subject to the right
of the holders of the Preferred Securities to appoint a Special Trustee, the
Company, as the direct or indirect holder of all the Common Securities, will
have the right to appoint, remove or replace any of the Issuer Trustees and to
increase or decrease the number of trustees; provided, however, that the number
of Issuer Trustees shall be at least three, a majority of whom shall be
Administrative Trustees. The Company will pay all fees and expenses related to
the Trust and the offering of the Preferred Securities. See "Description of
Junior Subordinated Debentures."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are as set forth in the
Declaration and the Delaware Business Trust Act, as amended (the "Trust Act").
See "Description of Preferred Securities." It is a condition to the Exchange
Offer that the Declaration, the Indenture and the Guarantee be qualified under
the Trust Indenture Act.
The place of business and the telephone number of the Trust are the
principal executive offices and telephone number of the Company. See
"Incorporation of Certain Documents by Reference."
30
<PAGE> 31
DESCRIPTION OF PREFERRED SECURITIES
Pursuant to the terms of the Declaration, the Issuer Trustees on behalf of
the Trust will issue the Preferred Securities and the Common Securities in fully
registered form without interest coupons. The Preferred Securities will
represent preferred undivided beneficial ownership interests in the Trust and
the holders thereof will be entitled to a preference in certain circumstances
with respect to Distributions and amounts payable on redemption of the Trust
Securities or liquidation of the Trust over the Common Securities, as well as
other benefits as described in the Declaration. See "-- Subordination of Common
Securities." The Declaration will be qualified under the Trust Indenture Act.
This summary of certain provisions of the Preferred Securities, the Common
Securities and the Declaration does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, all the provisions of the
Declaration, including the definitions therein of certain terms. The form of the
Declaration is available upon request from the Issuer Trustees.
GENERAL
Payments on the Preferred Securities will be made pro rata with payments on
the Common Securities, except as described under "-- Subordination of Common
Securities." Legal title to the Junior Subordinated Debentures will be held by
the Property Trustee on behalf of the Trust in trust for the benefit of the
holders of the Preferred Securities and Common Securities. The Guarantee
executed by the Company for the benefit of the holders of the Preferred
Securities will provide for the guarantee on a subordinated basis with respect
to the Preferred Securities but will not guarantee payment of Distributions or
amounts payable on redemption of the Preferred Securities or on liquidation of
the Trust when the Trust does not have funds on hand available to make such
payments. See "Description of Guarantee."
DISTRIBUTIONS
Distributions will accrue on the Preferred Securities at the annual rate of
$2.00 for each Preferred Security, and be payable quarterly in arrears on each
March 15, June 15, September 15 and December 15 (each, a "Distribution Date"),
to the person in whose name each of the Preferred Securities is registered,
subject to certain exceptions, at the close of business on the first of the
month in which the applicable Distribution Date occurs. The first Distribution
Date is expected to be on March 15, 2000. The amount of Distributions payable
for any period will be computed on the number of days elapsed in a 360-day year
consisting of twelve 30-day months, except that the Distribution payable on
March 15, 2000, will be $0.50 for each Preferred Security. In the event that any
Distribution Date is not a Business Day, payment of the Distributions payable on
such date will be made on the next succeeding day that is a Business Day (and
without any additional Distributions or other payments in respect to any such
delay) with the same force and effect as if made on the date such payment was
originally payable. Accrued Distributions that are not paid on the applicable
Distribution Date will accrue additional Distributions on the amount thereof (to
the extent permitted by law), compounded quarterly from the relevant
Distribution Date. "Distribution" as used herein shall include quarterly
distributions, additional distributions on quarterly distributions not paid on
the applicable Distribution Date, Special Distributions and Additional Sums (as
defined herein), as applicable. See "Description of Junior Subordinated
Debentures -- Additional Sums." A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to remain closed, or a
day on which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarters with respect to each Deferral
Period; provided, however, that no Deferral Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures -- Option to Extend Interest Payment Date." As a
consequence of any such election, quarterly Distributions on the Preferred
Securities by the Trust will be deferred during any such Deferral Period.
Deferred Distributions to which holders of the Preferred Securities are entitled
will accumulate additional Distributions thereon, compounded quarterly from the
relevant payment date for such Distributions during any such Deferral Period, to
the extent permitted by applicable law. During any such Deferral Period, the
Company may not (i) declare or pay any dividends or distributions on, or redeem,
purchase,
31
<PAGE> 32
acquire or make a liquidation payment with respect to, any of the Capital Stock
other than stock dividends paid by the Company which consist of stock of the
same class as that on which the dividend is being paid, (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Junior Subordinated Debentures, or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks pari passu with or junior in interest to
the Junior Subordinated Debentures (other than (a) dividends or distributions in
Capital Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Capital Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plan or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debentures), (e) as
a result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (f) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged). A Deferral Period will terminate upon the payment by the Company of
all amounts then accrued and unpaid on the Junior Subordinated Debentures
(together with interest thereon compounded quarterly, to the extent permitted by
applicable law). Upon the termination of any Deferral Period, and subject to the
foregoing limitations, the Company may elect to begin a new Deferral Period. No
interest or other amounts shall be due and payable during a Deferral Period,
except at the end thereof. The Company must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its election of any
such Deferral Period and shall cause the Trust to give such notice (which shall
include notice of the deferral of Distributions on Preferred Securities) to
holders of Preferred Securities not later than ten days prior to the related
record date for Distributions on Preferred Securities. There is no limitation on
the number of times that the Company may elect to begin a Deferral Period. See
"Description of Junior Subordinated Debentures -- Option to Extend Interest
Payment Date" and "U.S. Federal Income Tax Considerations -- U.S. Federal Income
Tax Consequences of Holding Preferred Securities -- Interest Income and Original
Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest on the Junior Subordinated Debentures.
The revenue of the Trust available for distribution to holders of the
Preferred Securities will be limited to payments under the Junior Subordinated
Debentures in which the Trust will invest the proceeds from the issuance and
sale of the Trust Securities. See "Description of Junior Subordinated
Debentures -- General." If the Company does not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will not have funds
available to pay Distributions on the Preferred Securities. The payment of
Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Company on a limited basis as set forth herein under
"Description of Guarantee."
CONVERSION RIGHTS
General. Preferred Securities will be convertible at any time prior to 5:00
p.m., New York City time, on the Stated Maturity date (except that Preferred
Securities called for redemption will be convertible at any time prior to 5:00
p.m., New York City time, on any Optional Redemption Date), at the option of the
holder thereof and in the manner described below, into Shares. Each of the
Preferred Securities is convertible, at the option of the holder, into 0.73 of a
Share for each of the Preferred Securities (equivalent to a conversion price
(the "Initial Conversion Price") of $37 per Share). The conversion ratio and the
equivalent conversion price will be subject to adjustment as described under
"-- Conversion Price Adjustments" below, and the conversion price and equivalent
conversion ratio in effect at any time after giving effect to all such
adjustments are hereinafter referred to as the Applicable Conversion Price and
the Applicable Conversion Ratio, respectively. The Trust will not convert Junior
Subordinated Debentures held by it except pursuant to a notice of conversion
delivered to the Property Trustee, as Conversion Agent, by a holder of Preferred
Securities. A holder of each of the Preferred Securities wishing to exercise its
conversion right must deliver an irrevocable conversion notice, together, if
each
32
<PAGE> 33
of the Preferred Securities is in certificated form with such certificated
security, to the Conversion Agent which shall, on behalf of such holder,
exchange such Preferred Securities for a Like Amount of Junior Subordinated
Debentures and immediately convert such Junior Subordinated Debentures into
Shares. Holders may obtain copies of the required form of the conversion notice
from the Conversion Agent.
Holders of Preferred Securities at the close of business on a Distribution
record date will be entitled to receive the Distribution payable on such
Preferred Securities on the corresponding Distribution Date notwithstanding the
conversion of such Preferred Securities following such Distribution record date
but prior to such Distribution Date. Except as provided in the immediately
preceding sentence, neither the Company nor the Trust will make, or be required
to make, any payment, allowance or adjustment for accrued and unpaid
Distributions, whether or not in arrears, on converted Preferred Securities. The
Company will make no payment or allowance for distributions on the Shares issued
upon such conversion, except to the extent that such Shares are held of record
on the record date for any such distributions. Each conversion will be deemed to
have been effected immediately prior to the close of business on the day on
which the related conversion notice was received by the Trust.
No fractional Shares will be issued as a result of conversion, but in lieu
thereof such fractional interest will be paid by the Company in cash based on
the then current market value of the Shares.
Conversion Price Adjustments -- General. The Applicable Conversion Price
will be subject to adjustment in certain events including, without duplication:
(i) the payment of dividends (and other distributions) payable in Capital Stock
on the Capital Stock; (ii) the issuance to all holders of Capital Stock of
rights or warrants; (iii) subdivisions and combinations of Capital Stock; (iv)
the payment of dividends (and other distributions) to all holders of Capital
Stock consisting of evidences of indebtedness of the Company, securities or
capital stock, cash or assets (including securities, but excluding those rights,
warrants, dividends and distributions referred to in clauses (i) and (ii) and
dividends and distributions paid exclusively in cash); (v) the payment of
dividends (and other distributions) on Capital Stock paid exclusively in cash,
excluding cash dividends if the annualized per Share amount thereof does not
exceed 12 1/2% of the current market price of Capital Stock as of the trading
day immediately preceding the date of declaration of such dividend; and (vi)
payment to holders of Capital Stock in respect of a tender or exchange offer
(other than an odd-lot offer) by the Company or any subsidiary of the Company
for Capital Stock at a price in excess of 110% of the current market price of
Capital Stock as of the trading day next succeeding the last date tenders or
exchanges may be made pursuant to such tender or exchange offer.
The Company may, at its option, make such reductions in the Applicable
Conversion Price as the Company's Board of Directors deems advisable to avoid or
diminish any income tax to holders of Capital Stock resulting from any dividend
or distribution of stock (or rights to acquire stock) or from any event treated
as such for income tax purposes. See "U.S. Federal Income Tax
Considerations -- U.S. Federal Income Tax Consequences of Holding Preferred
Securities -- Adjustment of Conversion Price."
No adjustment of the Applicable Conversion Price will be made upon the
issuance of any Shares pursuant to any present or future plan providing for the
reinvestment of dividends or interest payable on securities of the Company and
the investment of additional optional amounts in Shares under any such plan or
the issuance of any Shares or options or rights to purchase such Shares pursuant
to any present or future employee, director or consultant benefit plan or
program of the Company or pursuant to any option, warrant, right, or
exercisable, exchangeable or convertible security outstanding as of the date the
Preferred Securities were first issued. There shall also be no adjustment of the
Applicable Conversion Price in case of the issuance of any Capital Stock (or
securities convertible into or exchangeable for Capital Stock), except as
specifically described above. If any action would require adjustment of the
Applicable Conversion Price pursuant to more than one of the anti-dilution
provisions, only one adjustment shall be made and such adjustment shall be the
amount of adjustment that has the highest absolute value to holders of the
Preferred Securities. No adjustment in the Applicable Conversion Price will be
required unless such adjustment would require an increase or decrease of at
least 1% of the Applicable Conversion Price, but any adjustment that would
otherwise be required to be made shall be carried forward and taken into account
in any subsequent adjustment.
33
<PAGE> 34
Conversion Price Adjustments -- Merger, Consolidation or Sale of Assets of
the Company. In the event that the Company is a party to any transaction
(including a merger, consolidation, sale of all or substantially all of the
assets of the Company, recapitalization or reclassification of Capital Stock or
any compulsory share exchange (each of the foregoing being referred to as a
"Company Transaction")), in each case, as a result of which Shares shall be
converted into the right to receive other securities, cash or other property,
then lawful provision shall be made as part of the terms of such Company
Transaction whereby the holder of each of the Preferred Securities then
outstanding shall have the right thereafter to convert each of the Preferred
Securities only into (i) in the case of any Company Transaction other than a
Company Transaction involving a Capital Stock Fundamental Change (as defined
herein), the kind and amount of securities, cash and other property receivable
upon the consummation of such Company Transaction by a holder of that number of
Shares into which each of the Preferred Securities was convertible immediately
prior to such Company Transaction, or (ii) in the case of a Company Transaction
involving a Capital Stock Fundamental Change, common stock of the kind received
by holders of Capital Stock (but in each case after giving effect to any
adjustment discussed below relating to a Fundamental Change (as defined herein)
if such Company Transaction also constitutes a Fundamental Change). The holders
of Preferred Securities will have no voting rights with respect to any Company
Transaction described in this section.
In the case of any Company Transaction involving a Fundamental Change, the
Applicable Conversion Price will be adjusted immediately after such Fundamental
Change as follows:
(i) in the case of a Non-Stock Fundamental Change (as defined herein),
the Applicable Conversion Price will thereupon become the lower of (a) the
Applicable Conversion Price immediately prior to such Non-Stock Fundamental
Change and (b) the result obtained by multiplying the greater of the
Relevant Price (as defined herein) or the then applicable Reference Market
Price (as defined herein) by the Optional Redemption Ratio (as defined
herein) (such product shall hereinafter be referred to as the "Adjusted
Relevant Price" or the "Adjusted Reference Market Price," as the case may
be); and
(ii) in the case of a Capital Stock Fundamental Change, the Applicable
Conversion Price will thereupon be adjusted by multiplying such Applicable
Conversion Price by a fraction of which the numerator is the Purchaser
Stock Price (as defined herein) and the denominator is the Relevant Price;
provided, however, that in the event of a Capital Stock Fundamental Change
in which (a) 100% of the value of the consideration received by a holder of
Capital Stock is common stock of the successor, acquiror or other third
party (and cash, if any, is paid only with respect to any fractional
interests in such common stock resulting from such Capital Stock
Fundamental Change) and (b) all the Capital Stock is exchanged for,
converted into, or acquired for common stock (and cash with respect to
fractional interests) of the successor, acquiror or other third party, the
Applicable Conversion Price will thereupon be adjusted by multiplying such
conversion price by a fraction of which the numerator is one and the
denominator is the number of shares of common stock of the successor,
acquiror, or other third party received by a holder of one Share of Capital
Stock as a result of such Capital Stock Fundamental Change.
In the absence of the adjustments to the Applicable Conversion Price after
a Fundamental Change, in the case of a Company Transaction each of the Preferred
Securities would become convertible into the securities, cash, or other property
receivable by a holder of the number of shares of Capital Stock into which each
of the Preferred Securities was convertible immediately prior to such Company
Transaction. Thus, in the absence of the Fundamental Change provisions, a
Company Transaction could substantially lessen or eliminate the value of the
conversion privilege associated with the Preferred Securities. For example, if
the Company were acquired in a cash merger, each of the Preferred Securities
would become convertible solely into cash and would no longer be convertible
into securities whose value would vary depending on the future prospects of the
Company and other factors.
In Non-Stock Fundamental Change transactions, the foregoing conversion
price adjustments are designed to increase the securities, cash or other
property into which each of the Preferred Securities is convertible. In a Non-
Stock Fundamental Change transaction in which the initial value received per
Share (measured as described in the definition of Adjusted Relevant Price) is
lower than the then Applicable Conversion Price of each of the Preferred
Securities but greater than or equal to the Adjusted Reference Market Price, the
Applicable Conversion Price will be adjusted as described above with the effect
that each of the Preferred Securities will be convertible into
34
<PAGE> 35
securities, cash or other property of the same type received by the holders of
Capital Stock in such transaction with the Applicable Conversion Price adjusted
as though such initial value had been the Adjusted Relevant Price. In a
Non-Stock Fundamental Change transaction in which the initial value received per
Share (measured as described in the definition of Adjusted Relevant Price) is
lower than both the Applicable Conversion Price of each of the Preferred
Securities and the Adjusted Reference Market Price, the Applicable Conversion
Price will be adjusted as described above but calculated as though such initial
value had been the Adjusted Reference Market Price.
In Capital Stock Fundamental Change transactions, the foregoing adjustments
are designed to provide in effect that (i) where Capital Stock is converted
partly into such common stock and partly into other securities, cash or
property, each of the Preferred Securities will be convertible solely into a
number of shares of such common stock determined so that the initial value of
such shares (measured as described in the definition of Purchaser Stock Price)
equals the value of the Shares into which each of the Preferred Securities was
convertible immediately before the transaction (measured as aforesaid) and (ii)
where Capital Stock is converted solely into such common stock, each of the
Preferred Securities will be convertible into the same number of shares of such
common stock receivable by a holder of the number of Shares into which each of
the Preferred Securities was convertible immediately before such transaction.
"Capital Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Capital
Stock consists of common stock that for each of the ten consecutive trading days
immediately prior to and including the Entitlement Date (as defined herein) has
been admitted for listing or admitted for listing subject to notice of issuance
on a national securities exchange or quoted on the National Market System of the
Nasdaq Stock Market or any successor national automated interdealer quotation
system (the "NNM").
"Closing Price" of any security on any day means the last reported sale
price of such security on such day, or in case no sale takes place on such day,
the average of the closing bid and asked prices in each case on the principal
national securities exchange on which such securities are listed or admitted to
trading or, if not listed or admitted to trading on any national securities
exchange, on the NNM or, if such securities are not listed or admitted to
trading on any national securities exchange or quoted on the NNM, the average of
the closing bid and asked prices of such security in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected by the Company
for such purpose.
"Entitlement Date" means the record date for determination of the holders
of Capital Stock entitled to receive securities, cash or other property in
connection with a Non-Stock Fundamental Change or a Capital Stock Fundamental
Change or, if there is no such record date, the date upon which holders of
Capital Stock shall have the right to receive such securities, cash or other
property.
"Fundamental Change" means the occurrence of any transaction or event in
connection with a plan pursuant to which all or substantially all the Capital
Stock is exchanged for, converted into, acquired for or constitute solely the
right to receive securities, cash or other property (whether by means of an
exchange offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, that, in
the case of a plan involving more than one such transaction or event, for
purposes of adjustment of the Applicable Conversion Price, such Fundamental
Change shall be deemed to have occurred when substantially all the Capital Stock
has been exchanged for, converted into, or acquired for or constitute solely the
right to receive securities, cash, or other property, but the adjustment shall
be based upon the highest weighted average per share consideration that a holder
of Capital Stock could have received in such transactions or events as a result
of which more than 50% of the Capital Stock has been exchanged for, converted
into, or acquired for or constitute solely the right to receive securities, cash
or other property.
"Non-Stock Fundamental Change" means any Fundamental Change other than a
Capital Stock Fundamental Change.
"Optional Redemption Ratio" means a fraction of which the numerator will be
$27 and the denominator will be the then current Optional Redemption Price or,
prior to March 15, 2003, an amount per each of the Preferred Securities
determined by the Company in its sole discretion, after consultation with an
investment
35
<PAGE> 36
banking firm, to be the equivalent of the hypothetical redemption price that
would have been applicable if the Preferred Securities had been redeemable
during such period.
"Purchaser Stock Price" means, with respect to any Capital Stock
Fundamental Change, the average of the Closing Prices for the common stock
received in such Capital Stock Fundamental Change for the ten consecutive
trading days prior to and including the Entitlement Date, as adjusted in good
faith by the Company to appropriately reflect any of the events referred to in
clauses (i) through (vi) of the first paragraph under "-- Conversion Price
Adjustments -- General."
"Reference Market Price" initially means on the date of original issuance
of the Preferred Securities, $18.00 (which is an amount equal to 66 2/3% of the
liquidation amount per Preferred Security), and, in the event of any adjustment
to the Applicable Conversion Price, other than as a result of a Non-Stock
Fundamental Change, the Reference Market Price shall also be adjusted so that
the ratio of the Reference Market Price to the Applicable Conversion Price after
giving effect to any such adjustment shall always be the same as the ratio of
$18.00 to the Initial Conversion Price.
"Relevant Price" means (i) in the case of a Non-Stock Fundamental Change in
which the holder of Capital Stock receives only cash, the amount of cash
received by the holder of one Share of Capital Stock and (ii) in the event of
any other Non-Stock Fundamental Change or any Capital Stock Fundamental Change,
the average of the daily Closing Prices for Capital Stock during the ten
consecutive trading days prior to and including the Entitlement Date, in each
case as adjusted in good faith by the Company to appropriately reflect any of
the events referred to in clauses (i) through (vi) of the first paragraph under
"-- Conversion Price Adjustments -- General."
MANDATORY REDEMPTION
Upon the repayment in full of the Junior Subordinated Debentures at the
Stated Maturity or a redemption in whole or in part of the Junior Subordinated
Debentures (other than following any distribution of the Junior Subordinated
Debentures to the holders of the Trust Securities), the proceeds from such
repayment or redemption shall be applied by the Property Trustee to redeem, on a
pro rata basis, a Like Amount of Trust Securities, on the Redemption Date, in an
amount per Trust Security equal to the applicable Redemption Price, which
Redemption Price will be equal to (i) the liquidation amount of each of the
Preferred Securities plus any accrued and unpaid Distributions thereon (A) in
the case of the repayment of the Junior Subordinated Debentures at Stated
Maturity (the "Stated Maturity Price"), or (B) in the case of the redemption of
the Junior Subordinated Debentures in certain limited circumstances upon the
occurrence of a Tax Event or (ii) in the case of an Optional Redemption on or
after March 15, 2003, the Optional Redemption Price (as defined under
"Description of Junior Subordinated Debentures -- Redemption -- Optional
Redemption").
REDEMPTION PROCEDURES
Preferred Securities shall be redeemed, if at all, at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
redemption of the Junior Subordinated Debentures. Redemptions of the Preferred
Securities shall be made and the applicable Redemption Price shall be payable on
each Redemption Date only to the extent that the Trust has funds on hand
available for the payment of such Redemption Price. See also "-- Subordination
of Common Securities."
If the Trust gives a notice of redemption in respect of the Preferred
Securities, then, by 12:00 noon, New York City time, on the date fixed for
redemption (the "Redemption Date"), to the extent funds are available, with
respect to the Preferred Securities held in global form, the Property Trustee
will deposit irrevocably with DTC funds sufficient to pay the applicable
Redemption Price and will give DTC irrevocable instructions and authority to pay
the applicable Redemption Price to the holders of the Preferred Securities. See
"-- Form, Book-Entry Procedures and Transfer." With respect to the Preferred
Securities held in certificated form, the Property Trustee, to the extent funds
are available, will irrevocably deposit with the paying agent for the Preferred
Securities funds sufficient to pay the applicable Redemption Price and will give
such paying agent irrevocable instructions and authority to pay the Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Preferred Securities. See "-- Payment and Paying Agency." Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date shall be
payable to the holders of the Preferred Securities on the
36
<PAGE> 37
relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of the holders of the Preferred Securities will
cease, except the right of the holders of the Preferred Securities to receive
the applicable Redemption Price, but without interest on such Redemption Price,
and the Preferred Securities will cease to be outstanding. In the event that any
Redemption Date is not a Business Day, then payment of the applicable Redemption
Price payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day. In the event
that payment of the applicable Redemption Price is improperly withheld or
refused and not paid either by the Trust or by the Company pursuant to the
Guarantee as described under "Description of Guarantee," Distributions on
Preferred Securities will continue to accrue from the Redemption Date originally
established by the Trust to the date such Redemption Price is actually paid, in
which case the actual payment date will be the date fixed for redemption for
purposes of calculating the Redemption Price.
Subject to applicable law (including United States Federal securities law),
the Company or its subsidiaries may at any time and from time to time purchase
outstanding Preferred Securities by tender, in the open market or by private
agreement.
If the Company desires to consummate an Optional Redemption it must send a
notice to each holder of Trust Securities at its registered address in
accordance with the notice procedures set forth under "Description of Junior
Subordinated Debentures -- Redemption -- Optional Redemption." Notice of a Tax
Event Redemption will be mailed at least 20 days but not more than 60 days
before the Redemption Date to each holder of Preferred Securities. Notice of
repayment at Stated Maturity is not required.
TAX EVENT OR INVESTMENT COMPANY EVENT REDEMPTION OR DISTRIBUTION
If a Tax Event occurs, the Company shall cause the Issuer Trustees to
liquidate the Trust and cause Junior Subordinated Debentures to be distributed
to the holders of the Preferred Securities in liquidation of the Trust within 90
days following the occurrence of such Tax Event; provided, however, that such
liquidation and distribution shall be conditioned on (i) the Issuer Trustees'
receipt of an opinion of nationally recognized independent tax counsel
(reasonably acceptable to the Issuer Trustees) experienced in such matters (a
"No Recognition Opinion"), which opinion may rely on published revenue rulings
of the Internal Revenue Service, to the effect that the holders of the Preferred
Securities will not recognize any income, gain or loss for U.S. Federal income
tax purposes as a result of such liquidation and distribution of Junior
Subordinated Debentures, and (ii) the Company being unable to avoid such Tax
Event within such 90-day period by taking some ministerial action or pursuing
some other reasonable measure that, in the sole judgment of the Company, will
have no adverse effect on the Trust, the Company or the holders of the Preferred
Securities and will involve no material cost. Furthermore, if (i) the Company
has received an opinion (a "Redemption Tax Opinion") of nationally recognized
independent tax counsel (reasonably acceptable to the Issuer Trustees)
experienced in such matters that, as a result of a Tax Event, there is more than
an insubstantial risk that the Company would be precluded from deducting the
interest on the Junior Subordinated Debentures for U.S. Federal income tax
purposes, even after the Junior Subordinated Debentures were distributed to the
holders of the Preferred Securities upon liquidation of the Trust as described
above, or (ii) the Issuer Trustees shall have been informed by such tax counsel
that it cannot deliver a No Recognition Opinion, the Company shall have the
right, upon not less than 20 nor more than 60 days' notice and within 90 days
following the occurrence and continuation of the Tax Event, to redeem the Junior
Subordinated Debentures, in whole, but not in part, for cash, for the principal
amount thereof plus accrued and unpaid interest thereon and, following such
redemption, all the Preferred Securities will be redeemed by the Trust at the
aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon; provided, however, that, if at the time there is available to the
Company or the Trust the opportunity to eliminate, within such 90-day period,
the Tax Event by taking some ministerial action or pursuing some other
reasonable measure that, in the sole judgment of the Company, will have no
adverse effect on the Company, the Trust or the holders of the Preferred
Securities and will involve no material cost, the Company or the Trust will
pursue such measure in lieu of redemption. See "-- Mandatory Redemption." In
lieu of the foregoing options, the Company will also have the option of causing
the Preferred Securities to remain outstanding and pay Additional Sums, if
37
<PAGE> 38
any, on the Junior Subordinated Debentures. See "Description of Junior
Subordinated Debentures -- Additional Sums."
"Tax Event" means the receipt by the Property Trustee of an opinion of a
nationally recognized independent tax counsel to the Company (reasonably
acceptable to the Issuer Trustees) experienced in such matters (a "Dissolution
Tax Opinion") to the effect that, as a result of (i) any amendment to or change
(including any announced prospective change (which shall not include a proposed
change), provided that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein, (ii) any judicial decision or official
administrative pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action"), (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, or (iv) any current or future audit, examination or
proceeding relating to the Company or any related party, in each case, on or
after the date of original issuance of the Junior Subordinated Debentures or the
issue date of the Preferred Securities issued by the Trust, there is more than
an insubstantial risk that (a) if the Junior Subordinated Debentures are held by
the Property Trustee, (I) the Trust is, or will be within 90 days of the date of
such opinion, subject to U.S. Federal income tax with respect to interest
accrued or received on the Junior Subordinated Debentures or subject to more
than a de minimis amount of other taxes, duties or other governmental charges as
determined by such counsel, or (II) any portion of interest payable by the
Company to the Trust on the Junior Subordinated Debentures is not, or within 90
days of the date of such opinion will not be, deductible by the Company in whole
or in part for U.S. Federal income tax purposes or (b) with respect to Junior
Subordinated Debentures which are no longer held by the Property Trustee, any
portion of interest payable by the Company on the Junior Subordinated Debentures
is not, or within 90 days of the date of such opinion will not be, deductible by
the Company in whole or in part for U.S. Federal income tax purposes.
If an Investment Company Event occurs, the Company shall cause the Issuer
Trustees to liquidate the Trust and cause the Junior Subordinated Debentures to
be distributed to the holders of the Preferred Securities in liquidation of the
Trust within 90 days following the occurrence of such Investment Company Event.
"Investment Company Event" means the occurrence of a change in law or
regulation or a written change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority or any advice to the Company from any regulatory authority (a "Change
in 1940 Act Law") to the effect that the Trust is or will be considered an
"investment company" which is required to be registered under the Investment
Company Act of 1940, as amended (the "1940 Act"), which Change in 1940 Act Law
becomes effective on or after the date of this Offering Circular.
The distribution by the Company of the Junior Subordinated Debentures will
effectively result in the cancelation of the Preferred Securities. See
"-- Liquidation of the Trust and Distribution of Junior Subordinated
Debentures."
LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
The Company, as the holder of the outstanding Common Securities, will have
the right at any time (including upon the occurrence of a Tax Event or
Investment Company Act Event) to terminate the Trust and cause a Like Amount of
the Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities upon liquidation of the Trust; provided, however, that (a) the Issuer
Trustees shall have received a No Recognition Opinion prior to the liquidation
of the Trust and (b) following such distribution of the Junior Subordinated
Debentures, the Company must use its best efforts to maintain a rating of such
Junior Subordinated Debentures by any nationally recognized rating agency for so
long as any such Junior Subordinated Debentures are outstanding.
The Trust shall automatically terminate upon the first to occur of (i)
certain events of bankruptcy, dissolution or liquidation of the Company; (ii)
the distribution of a Like Amount of the Junior Subordinated Debentures to
38
<PAGE> 39
the holders of the Trust Securities if the Company, as Depositor, has given
written direction to the Property Trustee to terminate the Trust (which
direction is optional and, except as described above, wholly within the
discretion of the Company, as Depositor); (iii) redemption of all the Trust
Securities as described under "-- Mandatory Redemption"; (iv) expiration of the
term of the Trust; and (v) the entry of an order for the dissolution of the
Trust by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv) or
(v) above, the Trust shall be liquidated by the Issuer Trustees as expeditiously
as the Issuer Trustees determine to be possible by distributing, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, to the holders of such Trust Securities a Like Amount of the Junior
Subordinated Debentures, unless such distribution would not be practical, in
which event such holders will be entitled to receive out of the assets of the
Trust available for distribution to holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to, in
the case of holders of Preferred Securities, the aggregate liquidation amount
thereof plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"). If such Liquidation
Distribution can be paid only in part because the Trust has insufficient assets
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Preferred Securities shall be paid
on a pro rata basis. The Company, as holder of the Common Securities, will be
entitled to receive distributions upon any such liquidation pro rata with the
holders of the Preferred Securities, except that if a Debenture Event of Default
(or an event that, with notice or passage of time, would become such a Debenture
Event of Default) or an Event of Default under the Declaration has occurred and
is continuing, the Preferred Securities shall have a priority over the Common
Securities with respect to any such distributions. See "-- Subordination of
Common Securities."
"Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
liquidation amounts of such classes and the proceeds of which will be used to
pay the applicable Redemption Price of the Preferred Securities and (ii) with
respect to a distribution of Junior Subordinated Debentures to holders of
Preferred Securities in connection with a dissolution or liquidation of the
Trust, Junior Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Trust Securities of the holder to whom such
Junior Subordinated Debentures are distributed.
If the Company does not redeem the Junior Subordinated Debentures prior to
Stated Maturity and the Trust is not liquidated and the Junior Subordinated
Debentures are not distributed to holders of the Trust Securities, the Preferred
Securities will remain outstanding until the repayment of the Junior
Subordinated Debentures at the Stated Maturity and the distribution of the
Liquidation Distribution to the holders of the Preferred Securities.
On and after the liquidation date fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities, (i) the Preferred
Securities will no longer be deemed to be outstanding, (ii) DTC or its nominee,
as the record holder of the Preferred Securities, will receive a registered
global certificate or certificates representing the Junior Subordinated
Debentures to be delivered upon such distribution with respect to Preferred
Securities held by DTC or its nominee and (iii) any certificates representing
Preferred Securities not held by DTC or its nominee will be deemed to represent
Junior Subordinated Debentures having a principal amount equal to the
liquidation amount of such Preferred Securities and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Preferred Securities until such certificates are presented to the Administrative
Trustees or their agent for cancelation, whereupon the Company will issue to
such holder, and the Debenture Trustee will authenticate, a certificate
representing such Junior Subordinated Debentures.
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Preferred Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Preferred Securities offered hereby.
39
<PAGE> 40
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata to the
holders of Preferred Securities and Common Securities based on the liquidation
amount of the Trust Securities; provided, however, that, if on any Distribution
Date or Redemption Date any Debenture Event of Default (or an event that, with
notice or passage of time, would become such an Event of Default) or an Event of
Default under the Declaration shall have occurred and be continuing, no payment
of any Distribution on, or applicable Redemption Price of, any of the Common
Securities, and no other payment on account of the redemption, liquidation or
other acquisition of such Common Securities, shall be made unless payment in
full in cash of all accrued and unpaid Distributions on all of the outstanding
Preferred Securities for all Distribution periods terminating on or prior
thereto, or, in the case of payment of the applicable Redemption Price, the full
amount of such Redemption Price on all of the outstanding Preferred Securities,
shall have been made or provided for, and all funds available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the applicable Redemption Price of, the Preferred
Securities then due and payable.
In the case of any Event of Default under the Declaration resulting from a
Debenture Event of Default, the Company as holder of the Common Securities will
be deemed to have waived any right to act with respect to any such Event of
Default under the Declaration until the effect of all such Events of Default
have been cured, waived or otherwise eliminated. Until all such Events of
Default under the Declaration have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Preferred Securities and not on behalf of the Company as holder of the
Common Securities, and only the holders of the Preferred Securities will have
the right to direct the Property Trustee to act on their behalf.
EVENTS OF DEFAULT; NOTICE
Any one of the following events constitutes an "Event of Default" under the
Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see "Description
of Junior Subordinated Debentures -- Debenture Events of Default");
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days (subject to the deferral of any due date in the case of a Deferral
Period);
(iii) default by the Trust in the payment of any Redemption Price of
any Trust Security when it becomes due and payable;
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Issuer Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of which
or the breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding Preferred Securities, a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the
Declaration; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within three Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, unless such Event of Default shall have
been cured or waived. The Company and the Administrative Trustees are required
to file annually with the Property Trustee a
40
<PAGE> 41
certificate as to whether or not they are in compliance with all the conditions
and covenants applicable to them under the Declaration.
If a Debenture Event of Default (or an event that with notice or the
passage of time, would become such an Event of Default) or an Event of Default
under the Declaration has occurred and is continuing, the Preferred Securities
shall have a preference over the Common Securities as described above. See
"-- Liquidation of the Trust and Distribution of Junior Subordinated Debentures"
and "-- Subordination of Common Securities."
REMOVAL OF ISSUER TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in liquidation amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of the Delaware Trustee or the Property
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Declaration.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
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's property
may at the time be located, the Company, as the holder of the Common Securities,
and the Administrative Trustees shall have power to appoint one or more persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such Trust's property, or 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 such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the Declaration. In case a Debenture Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to make such
appointment.
MERGER OR CONSOLIDATION OF ISSUER TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any person succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Declaration, provided such person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE TRUST
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below or as otherwise set forth in the Declaration. The Trust may, at
the request of the Company, as Depositor, with the consent of the Administrative
Trustees but without the consent of the holders of the Preferred Securities, the
Property Trustee or the Delaware Trustee, merge with or into, consolidate,
amalgamate or be replaced by, or convey, transfer or lease its properties and
assets substantially as an entirety to, a trust organized as such under the laws
of any State; provided, however, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
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 Company expressly appoints
a trustee of such successor entity possessing the same powers and duties as the
Property Trustee as the holder of the Junior Subordinated Debentures, (iii) the
Successor Securities are listed or traded, or any Successor Securities will be
listed or traded upon notification of issuance, on any national securities
exchange, national automated quotation system or other organization on which the
Preferred Securities are then listed or traded, if any, (iv) such merger,
41
<PAGE> 42
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 identical and limited
to that of the Trust, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to the Trust experienced in such matters to the effect
that (a) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the holders of the Preferred Securities (including any Successor
Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, neither
the Trust nor such successor entity will be required to register as an
investment company under the 1940 Act, (viii) the Company or any permitted
successor or assignee owns all of the common securities of such successor entity
and guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee and (ix) such
merger, consolidation, amalgamation, replacement or lease is not a taxable event
for holders of the Preferred Securities. Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100% in aggregate
liquidation amount of the Trust Securities, consolidate, amalgamate, merge with
or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it, if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as an association
taxable as a corporation (or to substantially increase the likelihood that the
Trust or the successor entity would be classified as other than a grantor trust)
for U.S. Federal income tax purposes.
VOTING RIGHTS; AMENDMENT OF THE DECLARATION
Except as provided below and under "Description of Guarantee -- Amendments
and Assignment" and as otherwise required by law and the Declaration, the
holders of the Preferred Securities will have no voting rights.
In addition to the rights of the holders of Preferred Securities with
respect to the enforcement of payment to the Trust of principal of or interest
on the Junior Subordinated Debentures as provided under "Description of Junior
Subordinated Debentures -- Debenture Events of Default," if (i) a Debenture
Event of Default occurs and is continuing or (ii) the Company defaults under the
Guarantee with respect to the Preferred Securities (each an "Appointment
Event"), then the holders of the Preferred Securities, acting as a single class,
will be entitled by the majority vote of such holders to appoint a Special
Trustee. Any holder of Preferred Securities (other than the Company or any of
its affiliates) shall be entitled to nominate any person to be appointed as
Special Trustee. Not later than 30 days after such right to appoint a Special
Trustee arises, the Issuer Trustees shall convene a meeting of the holders of
Preferred Securities for the purpose of appointing a Special Trustee. If the
Issuer Trustees fail to convene such meeting within such 30-day period, the
holders of not less than 10% of the aggregate stated liquidation amount of the
outstanding Preferred Securities will be entitled to convene such meeting. The
provisions of the Declaration relating to the convening and conduct of the
meetings of the holders will apply with respect to any such meeting. Any Special
Trustee so appointed shall cease to be a Special Trustee if the Appointment
Event pursuant to which the Special Trustee was appointed and all other
Appointment Events cease to be continuing. Notwithstanding the appointment of
any such Special Trustee, the Company shall retain all rights under the
Indenture, including the right to defer payments of interest by extending the
interest payment period as provided under "Description of Junior Subordinated
Debentures -- Option to Extend Interest Payment Date." If such an extension
occurs, there will be no Debenture Event of Default and, consequently, no Event
of Default for failure to make any scheduled interest payment during the
Deferral Period on the date originally scheduled.
The Declaration may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, (i) to cure any ambiguity, correct or
supplement any provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to ministerial
matters or questions arising under the Declaration, which shall not be
inconsistent with the other provisions of the Declaration, or (ii) to modify,
eliminate or add to any
42
<PAGE> 43
provisions of the Declaration to such extent as shall be necessary to ensure
that the Trust will not be taxable as a corporation or will be classified for
U.S. Federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust will not be required to
register as an "investment company" under the 1940 Act; provided, however, that
in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any holder of Trust Securities, and any
amendments of the Declaration shall become effective when notice thereof is
given to the holders of the Trust Securities. The Declaration may also be
amended by the Issuer Trustees and the Company with (i) the consent of holders
representing not less than a majority (based upon liquidation amounts) of the
outstanding Preferred Securities, and (ii) receipt by the Issuer Trustees of an
opinion of counsel to the effect that such amendment or the exercise of any
power granted to the Issuer Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for U.S. Federal income tax
purposes or the Trust's exemption from status as an "investment company" under
the 1940 Act. In addition, without the consent of each holder of Trust
Securities, the Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise adversely affect
the amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a holder of
Trust Securities to institute suit for the enforcement of any such payment on or
after such date.
So long as any Junior Subordinated Debentures are held by the Trust, the
Issuer Trustees shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to the Junior
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Junior Subordinated Debentures shall be due and payable or
(iv) consent to any amendment, modification or termination of the Indenture or
the Junior Subordinated Debentures, where such consent shall be required,
without, in each case, obtaining the prior approval of the holders of a majority
in aggregate liquidation amount of all outstanding Preferred Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior consent of
each holder of the Preferred Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Preferred Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Preferred Securities of any notice of
default with respect to the Junior Subordinated Debentures. In addition to
obtaining the foregoing approvals of such holders of the Preferred Securities,
prior to taking any of the foregoing actions, the Issuer Trustees shall obtain
an opinion of counsel experienced in such matters to the effect that such action
will not affect the Trust's status as a grantor trust for U.S. Federal income
tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Preferred Securities are entitled to vote, or of any matter upon
which action by written consent of such holders is to be taken, to be given to
each holder of record of Preferred Securities in the manner set forth in the
Declaration.
No vote or consent of the holders of Preferred Securities will be required
for the Trust to redeem and cancel the Preferred Securities in accordance with
the Declaration.
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 the Company, the Issuer Trustees or any
affiliate of the Company or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
EXPENSES AND TAXES
In the Indenture, the Company has agreed to pay all debts and other
obligations (other than with respect to payments of Distributions, amounts
payable upon redemption and the liquidation amount of the Trust Securities) and
all costs and expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the Issuer Trustees and
the costs and expenses relating to the operation of the Trust) and the
43
<PAGE> 44
offering of the Preferred Securities, and to pay any and all taxes and all costs
and expenses with respect to the foregoing (other than United States withholding
taxes) to which the Trust might become subject. The foregoing obligations of the
Company under the Indenture are for the benefit of, and shall be enforceable by,
any person to whom any such debts, obligations, costs, expenses and taxes are
owed (a "Creditor") whether or not such Creditor has received notice thereof.
Any such Creditor may enforce such obligations of the Company directly against
the Company, and the Company has irrevocably waived any right or remedy to
require that any such Creditor take any action against the Trust or any other
person before proceeding against the Company. The Company has also agreed in the
Indenture to execute such additional agreement(s) as may be necessary or
desirable to give full effect to the foregoing.
FORM, BOOK-ENTRY PROCEDURES AND TRANSFER
Preferred Securities will be issued in fully registered form. Investors may
elect to hold their Preferred Securities directly or, subject to the rules and
procedures of DTC, hold their interest in a global certificate (the "Global
Preferred Securities") registered in the name of Cede & Co., as nominee of DTC.
However, tendering holders of Shares held in global form shall initially receive
an interest in the Global Preferred Securities and tendering holders of Shares
held directly in certificated form shall initially receive Preferred Securities
in certificated form. See "The Exchange Offer -- Procedures for Tendering."
Except as set forth below, the Global Preferred Securities may be transferred,
in whole and not in part, only to DTC or another nominee of DTC. Investors may
hold their beneficial interests in the Global Preferred Securities directly
through DTC if they have an account with DTC or indirectly through organizations
which have accounts with DTC.
DTC has advised the Company as follows: DTC is a limited-purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the New
York Uniform Commercial Code, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities of institutions that have accounts with DTC ("participants") and to
facilitate the clearance and settlement of securities transactions among its
participants in such securities through electronic book-entry changes in
accounts of the participants, thereby eliminating the need for physical movement
of securities certificates. DTC's participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. Access to DTC's book-entry system is also available to others
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a participant, whether directly or
indirectly.
Upon the issuance of the Global Preferred Securities, DTC will credit, on
its book-entry registration and transfer system, the principal amount of the
Preferred Securities represented by such Global Preferred Securities to the
accounts of participants. Ownership of beneficial interests in the Global
Preferred Securities will be limited to participants or persons that may hold
interests through participants. Ownership of beneficial interests in the Global
Preferred Securities will be shown on, and the transfer of those ownership
interests will be effected only through, records maintained by DTC (with respect
to participants' interests) and such participants (with respect to the owners of
beneficial interests in the Global Preferred Securities other than
participants). The laws of some jurisdictions may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and laws may impair the ability to transfer or pledge
beneficial interests in the Global Preferred Securities.
So long as DTC or its nominee is the registered holder and owner of the
Global Preferred Securities, DTC or such nominee, as the case may be, will be
considered the sole legal owner and holder of the related Preferred Securities
for all purposes of the Declaration, the Guarantee and the Indenture. The
Company understands that under existing industry practice, in the event an owner
of a beneficial interest in the Global Preferred Securities desires to take any
action that DTC, as the holder of the Global Preferred Securities, is entitled
to take, DTC would authorize the participants to take such action, and that the
participants would authorize beneficial owners owning through such participants
to take such action or would otherwise act upon the instructions of beneficial
owners owning through them.
44
<PAGE> 45
Payment of amounts with respect to the Preferred Securities represented by
the Global Preferred Securities registered in the name of and held by DTC or its
nominee will be made to DTC or its nominee, as the case may be, as the
registered owner and holder of the Global Preferred Securities.
The Company expects that DTC or its nominee, upon receipt of payment of
amounts with respect to the Global Preferred Securities, will credit
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the Global Preferred
Securities as shown on the records of DTC or its nominee. The Company also
expects that payments by participants to owners of beneficial interests in the
Global Preferred Securities held through such participants will be governed by
standing instructions and customary practices and will be the responsibility of
such participants. Neither the Company nor the Trust 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
Preferred Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests or for any other aspect of the
relationship between DTC and its participants or the relationship between such
participants and the owners of beneficial interests in the Global Preferred
Securities owning through such participants.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Preferred Securities among participants of
DTC, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Company nor the Trust will have any responsibility for the performance by DTC or
its participants or indirect participants of their respective obligations under
the rules and procedures governing their operations.
Neither the Company nor the Trust shall be liable for any delay by DTC or
any participant or indirect participant in identifying the beneficial owners of
the Preferred Securities, and the Company and the Trust may conclusively rely
on, and shall be protected in relying on, instructions from DTC for all purposes
(including with respect to the registration and delivery, and their respective
principal amounts, of the Preferred Securities to be issued).
The information in this Offering Circular concerning DTC and DTC's
book-entry system has been obtained from such sources that the Company believes
to be reliable. Neither the Company nor the Trust will have any responsibility
for the performance by DTC or its participants of their respective obligations
as described hereunder or under the rules and procedures governing their
respective operations.
PAYMENT AND PAYING AGENCY
Payments in respect of the Global Preferred Securities shall be made to
DTC, which shall credit the relevant accounts at DTC on the applicable
Distribution Dates, or, in respect of the Preferred Securities that are not held
by DTC, such payments shall be made by check mailed to the address of the holder
entitled thereto as such address shall appear on the register. The paying agent
(the "Paying Agent") shall initially be the Property Trustee and any co-paying
agent chosen by the Property Trustee and acceptable to the Administrative
Trustees and the Company. The Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and the Company. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Company) to act as Paying Agent.
The Property Trustee has informed the Trust that so long as it serves as
paying agent for the Preferred Securities, it anticipates that information
regarding Distributions on the Preferred Securities, including payment date,
record date and redemption information, will be made available through Firstar
Bank.
REGISTRAR, CONVERSION AGENT AND TRANSFER AGENT
The Property Trustee will act as registrar, conversion agent and transfer
agent for the Preferred Securities.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Declaration and, during the existence of an Event of
45
<PAGE> 46
Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in the
Declaration or is unsure of the application of any provision of the Declaration,
and the matter is not one on which holders of the Preferred Securities or the
Common Securities are entitled under the Declaration to vote, then the Property
Trustee shall take such action as is directed by the Company and, if not so
directed, shall take such action as it deems advisable and in the best interests
of the holders of the Trust Securities and will have no liability except for its
own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the 1940
Act or classified as an association taxable as a corporation for U.S. Federal
income tax purposes (or in a way that would substantially increase the risk that
the Trust would be classified as other than a grantor trust for U.S. Federal
income tax purposes), and so that the Junior Subordinated Debentures will be
treated as indebtedness of the Company for U.S. Federal income tax purposes. In
this connection, the Company and the Administrative Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of the Trust or the Declaration, that the Company and the Administrative
Trustees determine in their discretion to be necessary or desirable for such
purposes, as long as such action does not materially adversely affect the
interests of the holders of the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under the Indenture
between the Company and Firstar Bank, as trustee (the "Debenture Trustee"). The
Indenture will be qualified under the Trust Indenture Act. This summary of
certain terms and provisions of the Junior Subordinated Debentures and the
Indenture does not purport to be complete, and where reference is made to
particular provisions of the Indenture, such provisions, including the
definitions of certain terms, some of which are not otherwise defined herein,
are qualified in their entirety by reference to all of the provisions of the
Indenture and those terms made a part of the Indenture by incorporation of the
Trust Indenture Act.
GENERAL
Interest will accrue on the Junior Subordinated Debentures at the annual
rate of $2.00 for each $27 principal amount thereof and will be payable
quarterly in arrears on each of March 15, June 15, September 15 and December 15
(each, an "Interest Payment Date"), commencing March 15, 2000, to the person in
whose name each Convertible Junior Subordinated Debenture is registered, subject
to certain exceptions, at the close of business on the first of the month in
which the applicable Interest Payment Date occurs. It is anticipated that, until
the liquidation of the Trust, each Convertible Junior Subordinated Debenture
will be registered in the name of the Trust and held by the Property Trustee for
the benefit of the holders of the Trust Securities. The amount of interest
payable for any period will be computed on the basis of the number of days
elapsed in a 360-day year consisting of twelve 30-day months, except that the
interest payment payable on March 15, 2000, will be $0.50 for each $27 principal
amount. In the event that any Interest Payment Date is not a Business Day, then
payment of the interest payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay), with the same force and effect as if made on the applicable
Interest Payment Date. Accrued interest that is not paid on the applicable
Interest Payment Date will bear additional interest on the amount thereof (to
the extent permitted by law), compounded quarterly from the
46
<PAGE> 47
relevant Interest Payment Date. The term "interest" as used herein shall include
quarterly interest payments, interest on quarterly interest payments not paid on
the applicable Interest Payment Date, Special Interest and Additional Sums, as
applicable. See "-- Additional Sums."
Unless previously redeemed or repurchased in accordance with the Indenture,
the Junior Subordinated Debentures will mature on March 15, 2030 (the "Stated
Maturity"). See "-- Redemption -- Repayment at Maturity; Redemption of Junior
Subordinated Debentures."
The Junior Subordinated Debentures will be unsecured and will rank junior
and be subordinate in right of payment to all Senior Debt. Because the Company
is principally a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Preferred
Securities to benefit indirectly from such distribution), is subject to the
prior claims of creditors of such subsidiary, except to the extent that the
Company may itself be recognized as a creditor of such subsidiary. Accordingly,
the Junior Subordinated Debentures will be subordinated to all Senior Debt and
effectively subordinated to all existing and future liabilities of the Company's
subsidiaries, and holders of Junior Subordinated Debentures should look only to
the assets of the Company for payments on the Junior Subordinated Debentures.
The Indenture does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Debt, whether under the
Indenture or any existing or other indenture that the Company may enter into in
the future or otherwise. See "Risk Factors -- Ranking of Obligations Under the
Guarantee and the Junior Subordinated Debentures" and "-- Subordination."
OPTION TO EXTEND INTEREST PAYMENT DATE
As long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture to defer the payment of interest
on the Junior Subordinated Debentures at any time or from time to time for a
period not exceeding 20 consecutive quarters with respect to each Deferral
Period, provided, however, that no Deferral Period may extend beyond the Stated
Maturity of the Junior Subordinated Debentures. At the end of a Deferral Period,
the Company must pay all interest then accrued and unpaid on the Junior
Subordinated Debentures (together with interest accrued thereon compounded
quarterly from the relevant Interest Payment Date, to the extent permitted by
applicable law). During a Deferral Period and for so long as the Junior
Subordinated Debentures remain outstanding, interest will continue to accrue and
holders of Junior Subordinated Debentures (and holders of the Preferred
Securities) will be required to accrue interest income (in the form of OID) for
U.S. Federal income tax purposes. See "U.S. Federal Income Tax
Considerations -- U.S. Federal Income Tax Consequences of Holding Preferred
Securities -- Interest Income and Original Issue Discount."
During any Deferral Period, the Company may not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock other
than stock dividends paid by the Company which consist of stock of the same
class as that on which the dividend is being paid and (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Junior Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks pari passu with or junior in interest to
the Junior Subordinated Debentures (other than (a) dividends or distributions in
Capital Stock, (b) any declaration of a dividend in connection with the
implementation of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, (d) purchases or
acquisitions of shares of Capital Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plan or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior to the Junior Subordinated Debentures), (e) as
a result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock or (f) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged). A Deferral Period will terminate upon the payment by the Company of
all interest then accrued and unpaid on the Junior Subordinated Debentures
(together with interest accrued thereon, compounded quarterly, to the extent
permitted by applicable law). Upon the termination of any Deferral Period, and
subject to the foregoing limitations, the
47
<PAGE> 48
Company may elect to begin a new Deferral Period. No interest shall be due and
payable during a Deferral Period, except at the end thereof. The Company must
give the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of its election of any Deferral Period at least ten days prior to the
record date for the Distributions on the Preferred Securities that would have
been payable except for the election to begin or extend such Deferral Period.
The Debenture Trustee shall give notice of the Company's election to begin or
extend a new Deferral Period to the holders of the Preferred Securities. There
is no limitation on the number of times that the Company may elect to begin a
Deferral Period.
REDEMPTION
Repayment at Maturity; Redemption of Junior Subordinated Debentures
The Junior Subordinated Debentures must be repaid at Stated Maturity,
unless earlier redeemed. The circumstances in which the Company may redeem the
Junior Subordinated Debentures prior to Stated Maturity are described below.
Upon the repayment in full at maturity or redemption, in whole or in part, of
the Junior Subordinated Debentures (other than following the distribution of the
Junior Subordinated Debentures to the holders of the Trust Securities), the
proceeds from such repayment or redemption shall concurrently be applied to
redeem, at the applicable Redemption Price, a Like Amount of Trust Securities,
upon the terms and conditions described herein. See "Description of Preferred
Securities -- Mandatory Redemption."
Optional Redemption
The Company shall have the right to redeem the Junior Subordinated
Debentures, in whole or in part, at any time or from time to time after March
15, 2003, upon not less than 30 nor more than 60 days' notice, at a redemption
price equal to $27.27 per $27 principal amount of the Junior Subordinated
Debentures to be redeemed plus any accrued and unpaid interest, including
Additional Sums, if any, to the date of redemption, if redeemed on or before
March 15, 2004, and thereafter at $27 per $27 principal amount of Junior
Subordinated Debentures plus, in each case, accrued and unpaid interest,
including Additional Sums, if any, to the redemption date.
In the event of any redemption in part, the Company shall not be required
(i) to issue, register the transfer of or exchange any Junior Subordinated
Debenture during a period beginning at the opening of business 15 days before
any selection for redemption of Junior Subordinated Debentures and ending at the
close of business on the earliest date on which the relevant notice of
redemption is deemed to have been given to all holders of Junior Subordinated
Debentures to be so redeemed and (ii) to register the transfer of or exchange
any Junior Subordinated Debentures so selected for redemption, in whole or in
part, except the unredeemed portion of any Junior Subordinated Debenture being
redeemed in part.
Tax Event Redemption
The Company may also, under certain limited circumstances within 90 days of
the occurrence and continuation of a Tax Event, redeem (a "Tax Event
Redemption") the Junior Subordinated Debentures in whole, but not in part, at
the aggregate principal amount thereof plus accrued and unpaid interest thereon
to the date of redemption (the "Tax Event Redemption Price"). See "Description
of Preferred Securities -- Tax Event or Investment Company Event Redemption or
Distribution."
If the Company is permitted to consummate a Tax Event Redemption and it
desires to do so, it must mail notice to holders of Preferred Securities at
least 20 days but not more than 60 days before the Redemption Date.
ADDITIONAL SUMS
If (i) the Property Trustee is the sole holder of all Junior Subordinated
Debentures and (ii) the Trust is required to pay any additional taxes, duties,
assessments or other governmental charges as a result of a Tax Event or
otherwise ("Additional Sums"), the Company will pay as additional amounts on the
Junior Subordinated Debentures such amounts as shall be required so that the
Distributions payable by the Trust in respect of the Trust Securities shall not
be reduced as a result of any such Additional Sums.
48
<PAGE> 49
RESTRICTIONS ON CERTAIN PAYMENTS
If (i) a Debenture Event of Default has occurred and is continuing, (ii)
the Company is in default with respect to its payment of any obligations under
the Guarantee or (iii) the Company has have given notice of its election of a
Deferral Period as provided in the Indenture and has not rescinded such notice,
or such Deferral Period is continuing, the Company may not (a) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock other
than stock dividends paid by the Company which consist of stock of the same
class as that on which the dividend is being paid, (b) make any payment of
principal, interest or premium, if any, on or repay or repurchase or redeem any
debt securities of the Company that rank pari passu with or junior in interest
to the Junior Subordinated Debentures or (c) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks pari passu with or junior in interest to
the Junior Subordinated Debentures (in each case other than (A) dividends or
distributions in Capital Stock, (B) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (C) payments under the Guarantee, (D) purchases or
acquisitions of shares of Capital Stock in connection with the satisfaction by
the Company of its obligations under any employee benefit plan or any other
contractual obligation of the Company (other than a contractual obligation
ranking pari passu with or junior in interest to the Junior Subordinated
Debentures), (E) as a result of a reclassification of the Company's capital
stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock or (F)
the purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged).
MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interest of the holders of Junior
Subordinated Debentures or the holders of the Preferred Securities so long as
they remain outstanding) and qualifying, or maintaining the qualification of,
the Indenture under the Trust Indenture Act. The Indenture contains provisions
permitting the Company and the Debenture Trustee, with the consent of the
holders of not less than a majority in principal amount of Junior Subordinated
Debentures, to modify the Indenture in a manner affecting the rights of the
holders of Junior Subordinated Debentures; provided, however, that no such
modification may, without the consent of the holder of each outstanding
Convertible Junior Subordinated Debenture so affected, change the Stated
Maturity, or reduce the principal amount of the Junior Subordinated Debentures,
or reduce the rate or extend the time of payment of interest thereon or reduce
the percentage of principal amount of Junior Subordinated Debentures the consent
of whose holders is required to amend, waive or supplement the Indenture, or
have certain other effects as set forth in the Indenture.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures that has occurred and
is continuing constitutes a "Debenture Event of Default":
(i) failure for 30 days to pay any interest on the Junior Subordinated
Debentures when due (subject to the deferral of any due date in the case of
a Deferral Period);
(ii) failure to pay any principal or premium, if any, on the Junior
Subordinated Debentures when due, whether at maturity, upon redemption, by
declaration of acceleration or otherwise;
(iii) failure to observe or perform certain other covenants contained
in the Indenture for 90 days after written notice to the Company from the
Debenture Trustee or the holders of at least 25% in aggregate outstanding
principal amount of the Junior Subordinated Debentures;
49
<PAGE> 50
(iv) failure by the Company to issue and deliver shares of Capital
Stock upon an election by a holder of Preferred Securities to convert such
Preferred Securities;
(v) certain events in bankruptcy, insolvency or reorganization of the
Company; or
(vi) the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the distribution of the
Junior Subordinated Debentures to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of
the Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee. The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Junior Subordinated Debentures may declare
the principal due and payable immediately upon a Debenture Event of Default and,
should the Debenture Trustee or such holders of Junior Subordinated Debentures
fail to make such declaration, the holders of at least 25% in aggregate
liquidation amount of the Preferred Securities shall have such right. 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) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of Junior Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation amount of the Preferred Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of the
Junior Subordinated Debentures affected thereby may, on behalf of the holders of
all the Junior Subordinated Debentures, waive any past default, except a default
in the payment of principal of (or premium, if any) or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Junior Subordinated Debenture. Should the holders
of such Junior Subordinated Debentures fail to annul such declaration and waive
such default, the holders of a majority in aggregate liquidation amount of the
Preferred Securities shall have such right. The Company is required to file
annually with the Debenture Trustee a certificate as to whether or not the
Company is in compliance with all the conditions and covenants applicable to it
under the Indenture.
In case a Debenture Event of Default occurs and is continuing, the Property
Trustee will have the right to declare the principal of and the interest on the
Junior Subordinated Debentures, and any other amounts payable under the
Indenture, to be forthwith due and payable and to enforce its other rights as a
creditor with respect to the Junior Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Company to pay interest or principal
on the Junior Subordinated Debentures on the date such interest or principal is
otherwise payable, a holder of Preferred Securities may institute a Direct
Action. The Company may not amend the Indenture to remove the foregoing right to
bring a Direct Action without the prior written consent of the holders of all
the Preferred Securities. Notwithstanding any payments made to a holder of
Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Junior Subordinated Debentures, and the Company shall be subrogated to the
rights of the holders of such Preferred Securities with respect to payments on
the Preferred Securities to the extent of any payments made by the Company to
such holder in any Direct Action.
The holders of the Preferred Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debentures unless there
shall
50
<PAGE> 51
have been an Event of Default under the Declaration. See "Description of
Preferred Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
with or into any other person or convey, transfer or lease its properties and
assets substantially as an entirety to any person, and no person shall
consolidate with or merge with or into the Company or convey, transfer or lease
its properties and assets substantially as an entirety to the Company, unless
(i) in case the Company consolidates with or merges with or into another person
or conveys or transfers its properties and assets substantially as an entirety
to any person, the successor person is organized under the laws of the United
States or any State of the United States or the District of Columbia, and such
successor person expressly assumes the Company's obligations on the Junior
Subordinated Debentures issued under the Indenture and shall have provided for
conversion rights in accordance with Article XIII of the Indenture; (ii)
immediately after giving effect thereto, no Debenture Event of Default, and no
event which, after notice or lapse of time or both, would become a Debenture
Event of Default, shall have occurred and be continuing; (iii) if at the time
any Preferred Securities are outstanding, such transaction is permitted under
the Declaration and the Guarantee and does not give rise to any breach or
violation of the Declaration or the Guarantee; and (iv) certain other conditions
as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the Junior
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Junior Subordinated Debentures.
SUBORDINATION
The Junior Subordinated Debentures are subordinate and junior in right of
payment to all Senior Debt to the extent provided in the Indenture. Upon any
payment or distribution of assets to creditors upon any liquidation,
dissolution, winding-up, reorganization, assignment for the benefit of
creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, the holders of Senior Debt will first be
entitled to receive payment in full of principal of, and premium and interest,
if any, on, such Senior Debt before the holders of Junior Subordinated
Debentures, or the Property Trustee on behalf of the holders, will be entitled
to receive or retain any payment or distribution in respect thereof.
In the event of the acceleration of the maturity of the Junior Subordinated
Debentures, the holders of all Senior Debt outstanding at the time of such
acceleration will first be entitled to receive payment in full of all amounts
due thereon (including any amounts due upon acceleration) before the holders of
the Junior Subordinated Debentures will be entitled to receive or retain any
payment in respect of the principal of, and premium and interest, if any, on,
the Junior Subordinated Debentures.
If the Company defaults in the payment of any principal of, or premium or
interest, if any, on, any Senior Debt when the same becomes due and payable,
whether at maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, and such default continues beyond the period of
grace, if any, specified in the instrument evidencing such Senior Debt, then,
unless and until such default has been cured or waived or has ceased to exist or
all Senior Debt has been paid, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made for
principal of, and premium and interest, if any, on, the Junior Subordinated
Debentures, or in respect of any redemption, repayment, retirement, purchase or
other acquisition of any of the Junior Subordinated Debentures.
"Senior Debt" means (i) the principal of, and premium and interest, if any,
on, all indebtedness of the Company for money borrowed, whether outstanding on
the date of execution of the Indenture or thereafter created, assumed or
incurred, (ii) all obligations to make payment pursuant to the terms of
financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments, except, in the case of
51
<PAGE> 52
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Junior Subordinated Debentures; (iii) indebtedness or obligations of
others of the kind described in both (i) and (ii) above for the payment of which
the Company is responsible or liable as guarantor or otherwise and (iv) any
deferrals, renewals or extensions of any such Senior Debt; provided, however,
that Senior Debt shall not be deemed to include (a) any Debt of the Company
which, when incurred and without respect to any election under Section 1111(b)
of the United States Bankruptcy Code of 1978, was without recourse to the
Company, (b) trade accounts payable and accrued liabilities arising in the
ordinary course of business, (c) any Debt of the Company to any of its
subsidiaries, (d) Debt to any employee of the Company and (e) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Junior Subordinated Debentures as a
result of the subordination provisions of the Indenture would be greater than
such payments otherwise would have been as a result of any obligation of such
holders of such Debt to pay amounts over to the obligees on such trade accounts
payable or accrued liabilities arising in the ordinary course of business as a
result of subordination provisions to which such Debt is subject.
"Debt" means (i) the principal of, and premium and interest, if any, on,
indebtedness for money borrowed, (ii) purchase money and similar obligations,
(iii) obligations under capital leases, (iv) guarantees, assumptions or purchase
commitments relating to, or other transactions as a result of which the Company
is responsible for the payment of such indebtedness of others, (v) renewals,
extensions and refunding of any such indebtedness, (vi) interest or obligations
in respect of any such indebtedness accruing after the commencement of any
insolvency or bankruptcy proceedings and (vii) obligations associated with
derivative products such as interest rate and currency exchange contracts,
foreign exchange contracts, commodity contracts and similar arrangements.
The Indenture places no limitation on the amount of Senior Debt that may be
incurred by the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt. At November 30, 1999, the
aggregate outstanding Senior Debt of the Company was approximately $89,792,000.
The Indenture also places no limitation on the Debt of the Company's
subsidiaries, which is effectively senior in right of payment to the Junior
Subordinated Debentures. As of November 30, 1999, the Company's subsidiaries had
Debt and other liabilities of approximately $89,769,000 .
REGISTRATION AND TRANSFER
Unless and until distributed to holders of the Trust Securities, the Junior
Subordinated Debentures will be registered in the name of and held by the
Property Trustee. Should the Junior Subordinated Debentures be distributed to
holders of the Trust Securities, such Junior Subordinated Debentures will be
issued in fully registered form. In such event, investors may elect to hold
their Junior Subordinated Debentures directly or, subject to the rules and
procedures of DTC, hold interests in a global certificate deposited with DTC and
registered in the name of Cede & Co., as nominee of DTC.
Payments on Junior Subordinated Debentures held in global form will be made
to DTC, as the depositary for the Junior Subordinated Debentures. In the case of
Junior Subordinated Debentures 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 denominations of a like aggregate
principal amount, at the corporate office of the Debenture Trustee in New York,
New York, or at the offices of any paying agent or transfer agent appointed by
the Company; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the address of the persons entitled
thereto or by wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Preferred Securities -- Form, Book-Entry
Procedures and Transfer." If the Junior Subordinated Debentures are distributed
to the holders of the Trust Securities upon the termination of the Trust, the
form, book-entry and transfer procedures with respect to the Preferred
Securities as described under "Description of Preferred Securities -- Form,
Book-Entry Procedures and Transfer," shall apply to the Junior Subordinated
Debentures mutatis mutandis.
52
<PAGE> 53
PAYMENT AND PAYING AGENTS
Payment of the principal of, and premium and interest, if any, on, the
Junior Subordinated Debentures will be made at the office or agency of the
Company maintained for that purpose in New York, New York, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that, at the
option of the Company, payment of interest may be made (except in the case of
Junior Subordinated Debentures that are held in global form) by check mailed to
each registered holder or by wire transfer. Payment of any interest on any
Junior Subordinated Debenture will be made to the person in whose name such
Junior Subordinated Debenture is registered at the close of business on the
record date for such interest, except in the case of defaulted interest.
GOVERNING LAW
The Indenture and the Junior Subordinated Debentures will be governed by
and construed in accordance with the laws of the State of Delaware.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall 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 Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debentures, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The Debenture Trustee is not required to expend
or risk its own funds or otherwise incur personal financial liability in the
performance of its duties if the Debenture Trustee reasonably believes that
repayment or adequate indemnity is not reasonably assured to it.
DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by the Company concurrently
with the issuance by the Trust of the Preferred Securities for the benefit of
the holders from time to time of such Preferred Securities. Firstar Bank will
act as trustee (the "Guarantee Trustee") under the Guarantee. The Guarantee will
be qualified under the Trust Indenture Act. This summary of certain provisions
of the Guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the
Guarantee, including the definitions therein of certain terms, and the Trust
Indenture Act. The Guarantee Trustee will hold the Guarantee for the benefit of
the holders of the Preferred Securities.
GENERAL
Pursuant to the Guarantee, the Company will irrevocably agree to pay in
full on a subordinated basis, to the extent set forth herein, the Guarantee
Payments (as defined herein) to the holders of the Preferred Securities, as and
when due, regardless of any defense, right of set-off or counterclaim that the
Trust may have or assert other than the defense of payment. The following
payments with respect to the Preferred Securities, to the extent not paid by or
on behalf of the Trust (the "Guarantee Payments"), will be subject to the
Guarantee: (i) any accrued and unpaid Distributions required to be paid on the
Preferred Securities, to the extent that the Trust has funds on hand available
therefor at such time, (ii) the applicable Redemption Price with respect to
Preferred Securities called for redemption, to the extent that the Trust has
funds on hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding up or liquidation of the Trust (other than in
connection with the distribution of Junior Subordinated Debentures to the
holders of the Preferred Securities or the redemption of all of the Preferred
Securities) the lesser of (a) the Liquidation Distribution, to the extent the
Trust has funds available therefor and (b) the amount of assets of the Trust
remaining available for distribution to holders of the Preferred Securities upon
liquidation of the Trust after satisfaction of liabilities to creditors of the
Trust as required by applicable law. The Company's obligation to make a
Guarantee Payment may be satisfied by direct payment of the required amounts by
the Company to the holders of the Preferred Securities or by causing the Trust
to pay such amounts to such holders.
53
<PAGE> 54
The Guarantee will be an irrevocable guarantee on a subordinated basis of
the Trust's obligations under the Preferred Securities, although it will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection. If the Company does not make interest
payments on the 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 legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to all
Senior Debt. See "-- Status of the Guarantee." Because the Company is
principally a holding company, the right of the Company to participate in any
distribution of assets of any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of the holders of Preferred
Securities to benefit indirectly from any such distribution), is subject to the
prior claims of creditors of such subsidiary, except to the extent the Company
may itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and claimants
should look only to the assets of the Company for payments thereunder. The
Guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of the Company, including Senior Debt, whether under any
indenture that the Company may enter into in the future or otherwise.
Taken together, the Company's obligations under the Guarantee, the
Declaration, the Junior Subordinated Debentures and the Indenture, including the
Company's obligation to pay the costs. expenses and other liabilities of the
Trust (other than the Trust's obligations to the holders of the Trust Securities
under the Trust Securities), provide, in the aggregate, a full, irrevocable and
unconditional guarantee of all of the Trust's obligations under the Preferred
Securities. No single document standing alone or operating in conjunction with
fewer than all the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Junior Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all Senior Debt in the
same manner as Junior Subordinated Debentures.
The Guarantee will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding directly against
the Company to enforce its rights under the Guarantee without first instituting
a legal proceeding against any other person or entity). The Guarantee will be
held for the benefit of the holders of the Preferred Securities. The Guarantee
will not be discharged except by payment of the Guarantee Payments in full to
the extent not paid by the Trust or upon distribution to the holders of the
Preferred Securities of the Junior Subordinated Debentures. The Guarantee does
not place a limitation on the amount of additional Senior Debt that may be
incurred by the Company. The Company expects from time to time to incur
additional indebtedness constituting Senior Debt.
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 the
outstanding Preferred Securities. The manner of obtaining any such approval will
be as set forth under "Description of Preferred Securities -- Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Company and shall inure to the benefit of the holders of
the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder; provided,
however, that except with respect to a default in payment of any Guarantee
Payment, the Company shall have received notice of default and shall not have
cured such default
54
<PAGE> 55
within 60 days after receipt of such notice. 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 Guarantee Trustee in respect of the Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee.
Any holder of the Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care and
skill as a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to this provision, the Guarantee Trustee is under no obligation
to exercise any of the powers vested in it by the Guarantee at the request of
any holder of the Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby.
TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of the Preferred Securities, upon full
payment of the amounts payable upon liquidation of the Trust or upon
distribution of Junior Subordinated Debentures to the holders of the 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.
55
<PAGE> 56
RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES 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 the Company as and to the extent
set forth under "Description of Guarantee." Taken together, the Company's
obligations under the Junior Subordinated Debentures, the Indenture, the
Declaration and the Guarantee provide, in the aggregate, a full, irrevocable and
unconditional guarantee of payments of Distributions and other amounts due on
the Preferred Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Trust Securities. If and to the extent that the
Company does not make payments on the Junior Subordinated Debentures, the Trust
will not pay Distributions or other amounts due on the 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 Preferred Securities is to institute a Direct Action. The obligations
of the Company under the Guarantee are subordinate and junior in right of
payment to all Senior Debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because: (i) the aggregate principal amount or applicable Redemption Price of
the Junior Subordinated Debentures will be equal to the sum of the aggregate
liquidation amount or applicable Redemption Price, as applicable, of the Trust
Securities; (ii) the interest rate payable on the Junior Subordinated Debentures
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; (iii) the Company shall pay for all costs, expenses and
liabilities of the Trust except the Trust's obligations to holders of Trust
Securities under such Trust Securities; and (iv) the Declaration further
provides that the Trust will not engage in any activity that is not consistent
with the limited purposes thereof.
Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, any payment under the Guarantee used to satisfy
the related payment of indebtedness under the Indenture.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any of the Preferred Securities may institute a legal
proceeding directly against the Company to enforce its rights under the
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the Trust or any other person or entity.
A default or event of default under any Senior Debt would not constitute a
default or Event of Default under the Declaration. However, in the event of
payment defaults under, or acceleration of, Senior Debt, the subordination
provisions of the Indenture provide that no payments may be made in respect of
the Junior Subordinated Debentures until such Senior Debt has been paid in full
or any payment default thereunder has been cured or waived. Failure to make
required payments on Junior Subordinated Debentures would constitute an Event of
Default under the Declaration.
LIMITED PURPOSE OF THE TRUST
The Preferred Securities evidence a beneficial interest in the Trust, and
the Trust exists for the sole purpose of issuing the Preferred Securities and
Common Securities and investing the proceeds of the Trust Securities in Junior
Subordinated Debentures.
56
<PAGE> 57
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
the Trust involving the liquidation of the Junior Subordinated Debentures, after
satisfaction of the liabilities of creditors of the Trust as required by
applicable law, the holders of the Trust Securities will be entitled to receive,
out of assets held by the Trust, the Liquidation Distribution in cash. See
"Description of Preferred Securities -- Liquidation of the Trust and
Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of the Company, the Property Trustee, as
holder of the Junior Subordinated Debentures, would be a subordinated creditor
of the Company, subordinated in right of payment to all Senior Debt as set forth
in the Indenture, but entitled to receive payment in full of principal and
interest, before any stockholders of the Company receive payments or
distributions. Since the Company is the guarantor under the Guarantee and has
agreed to pay for all costs, expenses and liabilities of the Trust (other than
the Trust's obligations to the holders of its Trust Securities), the positions
of a holder of Preferred Securities and a holder of Junior Subordinated
Debentures relative to other creditors and to stockholders of the Company in the
event of liquidation or bankruptcy of the Company are expected to be
substantially the same.
DESCRIPTION OF CAPITAL STOCK
The holders of the Capital Stock are entitled to one vote for each Share on
all matters on which the holders of Capital Stock are entitled to vote and do
not have any cumulative voting rights. The Board of Directors may, in its sole
discretion, declare dividends on the Capital Stock, to be paid out of funds
legally available therefor. Holders of Capital Stock do not have any preemptive,
conversion, redemption or sinking fund rights. All outstanding Shares of the
Capital Stock are fully paid and nonassessable.
The transfer agent and registrar for the Capital Stock is Norwest Bank
Minnesota, N.A.
The Capital Stock is listed on the NYSE under the trading symbol "CHE."
U.S. FEDERAL INCOME TAX CONSIDERATIONS
GENERAL
The following is a summary of the material U.S. Federal income tax
consequences of the Exchange Offer and ownership of Preferred Securities.
However, the summary is limited in the following ways:
- It only applies to Exchanging Holders (as defined below).
- It assumes that the Shares and Preferred Securities are held as capital
assets within the meaning of Section 1221 of the Internal Revenue Code of
1986, as amended (the "Code").
- It is based on the Code, Treasury regulations thereunder (the "Treasury
Regulations") and administrative and judicial interpretations thereof, as
of the date hereof. All of these are subject to change, possibly on a
retroactive basis.
- It does not describe the special tax considerations applicable to special
classes of holders such as banks, thrifts, real estate investment trusts,
regulated investment companies, insurance companies, dealers in
securities or currencies or tax-exempt investors. It also does not apply
to persons who hold or will hold the Shares or Preferred Securities as a
part of a "straddle," "synthetic security," "hedge," "conversion
transaction" or other integrated investment.
- It does not address the tax consequences to persons who have a functional
currency other than the U.S. dollar or the tax consequences to
shareholders, partners or beneficiaries of a holder of Capital Stock or
Preferred Securities.
- It does not apply to a Foreign Holder (as defined below) who or which (a)
owns 10% or more of the Shares or (b) is a "controlled foreign
corporation" with respect to the Company.
57
<PAGE> 58
- It does not describe any alternative minimum tax consequences or the tax
laws of any state, local or foreign government that may be applicable to
the Shares or Preferred Securities.
No rulings have been, or will be, sought from the Internal Revenue Service
("IRS") with respect to the Exchange Offer or ownership of Preferred Securities.
Accordingly, there can be no assurance that the IRS will not challenge the
conclusions expressed in this summary or that a court would not sustain such a
challenge. In particular, if the Junior Subordinated Debentures were considered
equity, rather than indebtedness, for U.S. Federal income tax purposes, the U.S.
Federal income tax consequences would be significantly different than described
below.
For purposes of this summary:
- an "Exchanging Holder" is a holder of Shares that exchanges such Shares
for Preferred Securities in the Exchange Offer.
- a Foreign Holder is any Exchanging Holder who or which is an individual,
a corporation, an estate or a trust that is not a "United States person"
within the meaning of Section 7701(a)(30) of the Code.
CLASSIFICATION OF THE TRUST AS A GRANTOR TRUST
In connection with the issuance of the Preferred Securities, Cravath,
Swaine & Moore, tax counsel to the Company and the Trust, will render its
opinion, under then current law and assuming full compliance with the terms of
the Declaration and the Indenture (and certain other documents), and based on
certain facts and assumptions contained in such opinion, that the Trust will be
classified for U.S. Federal income tax purposes as a grantor trust and not as an
association (or a publicly traded partnership) taxable as a corporation.
Accordingly, for U.S. Federal income tax purposes, each holder of Preferred
Securities generally will be considered the owner of an undivided interest in
the Junior Subordinated Debentures, and each holder will be required to include
in its gross income all income, gain or loss with respect to its allocable share
of those Junior Subordinated Debentures.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES AS INDEBTEDNESS
In connection with the issuance of the Junior Subordinated Debentures,
Cravath, Swaine & Moore will render its opinion under then current law and
assuming full compliance with the terms of the Indenture (and certain other
documents), and based on certain facts and assumptions contained in such
opinion, that the Junior Subordinated Debentures to be held by the Trust should
be classified for U.S. Federal income tax purposes as indebtedness of the
Company. By acceptance of Preferred Securities, each holder covenants to treat
the Junior Subordinated Debentures as indebtedness and the Preferred Securities
as evidence of indirect beneficial ownership interest in the Junior Subordinated
Debentures. The remainder of this discussion assumes, unless specifically
indicated otherwise, that the Junior Subordinated Debentures will be classified
as indebtedness of the Company for U.S. Federal income tax purposes.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE EXCHANGE OFFER
An exchange of Shares for Preferred Securities pursuant to the Exchange
Offer will be a taxable transaction. The U.S. Federal income tax consequences to
an Exchanging Holder will vary and depend on each Exchanging Holder's particular
circumstances. An Exchanging Holder will be treated either as recognizing
capital gain or loss from the exchange of Shares or as receiving a dividend
distribution from the Company.
Capital Gain or Loss Treatment
If the exchange by an Exchanging Holder qualifies for capital gain or loss
treatment under either of the two tests described below, then an Exchanging
Holder will recognize capital gain or loss equal to the difference between (i)
the fair market value of the Preferred Securities, as of the Expiration Date,
received in the Exchange Offer and (ii) its tax basis in the Shares surrendered
therefor. Any such gain or loss will be long-term capital gain or loss if the
Shares were held for more than one year as of the Expiration Date.
58
<PAGE> 59
Dividend Treatment
If the exchange by an Exchanging Holder does not satisfy either of the two
tests described below, the exchange will be deemed to constitute a distribution
taxable as a dividend. Such Exchanging Holder will be required to include the
fair market value of the Preferred Securities, as of the Expiration Date,
received in the Exchange Offer in income as ordinary dividend income. The tax
basis in the Shares surrendered in the Exchange Offer will be added to the tax
basis of the remaining Shares held by the Exchanging Holder. However, if the
amount of the distribution exceeds the Company's current or accumulated earnings
and profits, as calculated for U.S. Federal income tax purposes ("E&P"), the
excess will instead be treated first as a tax-free return of capital (thereby
reducing such Exchanging Holder's basis in its Shares on a dollar-for dollar
basis) to the extent of the Exchanging Holder's basis in its Shares and
thereafter as capital gain.
An Exchanging Holder that is a U.S. corporation may be entitled to claim a
dividends-received deduction under Section 243 of the Code, subject to
applicable limitations. However, it is expected that any such dividend would
constitute an "extraordinary dividend" under Section 1059 of the Code. Corporate
holders are urged to consult with their tax advisors concerning these matters.
Tests for Capital Gain or Loss Treatment
An Exchanging Holder will qualify for capital gain or loss, rather than
dividend, treatment if the exchange of Shares for Preferred Securities either
- is "substantially disproportionate" with respect to the Exchanging Holder
or
- is "not essentially equivalent to a dividend" with respect to the
Exchanging Holder.
The "substantially disproportionate" test is satisfied if the percentage of
the then outstanding Shares actually and constructively owned by the Exchanging
Holder immediately after the exchange is less than 80% of the percentage of the
then outstanding Shares actually and constructively owned by such Exchanging
Holder immediately before such exchange.
The "not essentially equivalent to a dividend test" is satisfied if the
exchange results in a "meaningful reduction" in the Exchanging Holder's
percentage interest in the Shares. The IRS has indicated in published rulings
that even a small reduction in the proportionate interest of a small minority
shareholder in a publicly held corporation who or which exercises no control
over corporate affairs may constitute such a "meaningful reduction." Exchanging
Holders expecting to rely on the "not essentially equivalent to a dividend" test
should consult their own tax advisors as to its application in their particular
situation.
In determining whether an Exchanging Holder will satisfy either of the two
tests for capital gain or loss treatment, an Exchanging Holder must take into
account not only the Shares that it actually owns, but also any Shares which it
will be considered to "constructively" own under Section 318 of the Code. An
Exchanging Holder may be considered to constructively own, among other things,
any Shares that it has a right to acquire by way of the conversion feature of
the Preferred Securities. In addition, an Exchanging Holder may be considered to
own Shares or Preferred Securities actually owned, and in some cases,
constructively owned, by certain related individuals or entities.
In calculating its percentage interest in Shares after the Exchange Offer,
an Exchanging Holder must take into account the following:
- the Exchanging Holder is treated as owning the Capital Stock that it
could acquire by converting its Preferred Securities and
- the total outstanding Shares is reduced by the number of Shares accepted
for exchange in the Exchange Offer, and, as to any Exchanging Holder, is
increased by the Shares that would be issued to that Exchanging Holder on
conversion of its Preferred Securities but is not increased by any Shares
that would be issued to other holders on conversion of their Preferred
Securities.
If an Exchanging Holder exchanges less than all its Shares in the Exchange
Offer, this may adversely affect such Exchanging Holder's ability to satisfy the
tests for capital gain or loss treatment. This result could
59
<PAGE> 60
arise if an Exchanging Holder tenders less than all its Shares in the Exchange
Offer or as a result of proration in the Exchange Offer or both.
If an Exchanging Holder sells or otherwise disposes of Shares at or about
the same time as the Exchange Offer, such sales may be taken into account in
determining whether the Exchanging Holder satisfies either the "substantially
disproportionate" or the "not essentially equivalent to a dividend" test. An
Exchanging Holder should consult with its tax advisor regarding the treatment of
such sales of Capital Stock.
Foreign Holders
A Foreign Holder may not be subject to U.S. Federal income tax on the
exchange if the Foreign Holder satisfies either of the two tests for capital
gain or loss treatment described above, unless:
- the Foreign Holder's gain is effectively connected with a trade or
business of the Foreign Holder within the United States, or
- the Foreign Holder is an individual and is present in the United States
for 183 or more days in the taxable year of the Expiration Date and
certain other conditions are met.
However, if the Foreign Holder does not satisfy either of the two tests for
capital gain or loss treatment described above, its dividend income will be
subject to withholding of U.S. Federal income tax at a rate of 30% or such lower
rate as may be specified in an applicable income tax treaty unless the dividend
is effectively connected with the conduct of a trade or business in the United
States. In addition, in the case of a Foreign Holder that is a corporation, such
Foreign Holder also may be subject to an additional "branch profits tax" at a
rate of 30% or such lower rate as may be specified by an applicable income tax
treaty.
The Company will have no way of knowing whether any Exchanging Holder
satisfies either of the two tests for capital gain or loss treatment described
above. As a result, to protect itself, the Company will withhold U.S. Federal
income tax at a rate of 30% from gross proceeds paid pursuant to the Exchange
Offer to a Foreign Holder or its agent, unless the Exchanging Holder
demonstrates to the Company that no withholding or a reduced rate of withholding
should apply. In order to provide for such withholding, the Company or Firstar
Bank may sell some portion of the Preferred Securities that otherwise would have
been distributed to an Exchanging Holder. A Foreign Holder may apply for a
refund of any excess withholding by filing a claim with the IRS.
Holders of Shares Who Do Not Participate in the Exchange Offer
Holders of Shares who elect not to participate in the Exchange Offer and
who consequently do not exchange their Shares will not recognize gain or loss as
a consequence of the Exchange Offer.
U.S. FEDERAL INCOME TAX CONSEQUENCES OF HOLDING PREFERRED SECURITIES
Tax Basis and Holding Period
A Exchanging Holder's initial tax basis for its Preferred Securities will
equal the fair market value of the Preferred Securities as of the Expiration
Date, and its holding period in the Preferred Securities will commence the day
after the Expiration Date.
Issue Price
The issue price of each $27 principal amount of each Junior Subordinated
Debenture will be equal to the fair market value of a Preferred Security on the
Expiration Date.
Interest Income and Original Issue Discount
Unless the rules applicable to OID or bond premium apply to the Junior
Subordinated Debentures, as discussed below, stated interest on the Preferred
Securities will generally be taxable to a holder as ordinary income when paid or
accrued in accordance with that holder's regular method of accounting for U.S.
Federal income tax purposes. While the existence of an issuer's option to defer
the payment of interest on debt
60
<PAGE> 61
instruments generally results in the application of the OID rules, debt
instruments like the Junior Subordinated Debentures are not considered issued
with OID if there is only a "remote" likelihood of the Company exercising its
option of deferral.
The Company believes, and this discussion assumes, that, as of the date
hereof, the likelihood of deferring payments of interest under the terms of the
Junior Subordinated Debentures is "remote" within the meaning of the applicable
Treasury Regulations. This belief is based in part on the fact that exercising
that option would prevent the Company from declaring dividends on its Capital
Stock and would prevent the Company from making any payments with respect to
debt securities that rank pari passu with or junior to the Junior Subordinated
Debentures. Therefore, although the matter is not free from doubt, the Company
believes that the Junior Subordinated Debentures should not be treated as
subject to the OID rules at the time of their original issuance by reason of the
Company's deferral option. No rulings or other interpretations have been issued
by the IRS which have addressed the meaning of the term "remote" as used in the
applicable Treasury regulations, and it is possible that the IRS could take a
position contrary to the interpretations herein.
If the likelihood of the Company exercising the option to defer any payment
of interest were determined not to be "remote" or if the Company were to
exercise its option to defer payments of interest, the Junior Subordinated
Debentures would be treated as subject to the OID rules at the time of their
original issuance or at the time of such exercise, as the case may be, for the
entire remaining term of the Junior Subordinated Debentures. Under these rules,
OID would accrue on an economic accrual basis and would be includible in income
on the accrual method, including during any interest deferral period, regardless
of the holder's method of accounting for U.S. Federal income tax purposes.
Consequently, holders of the Preferred Securities would be required to include
OID in gross income even though the Company would not make any actual
distributions during the extension period. Actual distributions of interest on
the Junior Subordinated Debentures generally would not be separately taxable. A
holder that disposes of its Preferred Securities prior to the record date for
payment of distributions on the Junior Subordinated Debentures will be subject
to tax on OID accrued through the date of disposition (and not previously
included in income), but will not receive cash from the Trust with respect to
such OID.
OID will also arise on the Junior Subordinated Debentures if the issue
price is less than the principal amount of the Junior Subordinated Debentures by
a percentage amount equal to or greater than the product of (i) 0.25% and (ii)
the number of complete years to its maturity. Such OID would also be required to
be included in income as it accrues over the term of the Junior Subordinated
Debentures.
Holders will not be entitled to the dividends-received deduction with
respect to any amounts received with respect to the Preferred Securities.
Bond Premium
If the issue price of the Junior Subordinated Debentures is greater than
their principal amount, the excess will be bond premium that is amortizable over
the term of the Junior Subordinated Debentures, but only to the extent such
excess is not attributable to the conversion feature of the Preferred Security.
The amount of such bond premium that is amortized in any taxable year will be
treated as a reduction of the holder's interest or OID income on the Junior
Subordinated Debentures for such year and will reduce the holder's tax basis in
the Junior Subordinated Debentures on a dollar-for-dollar basis.
Receipt of Junior Subordinated Debentures or Cash Upon Liquidation of the
Trust
If the Junior Subordinated Debentures are distributed to holders in
exchange for the Preferred Securities and in liquidation of the Trust, a holder
would not be subject to U.S. Federal income tax and would receive an aggregate
tax basis and holding period in the Junior Subordinated Debentures equal to its
aggregate tax basis and holding period in its Preferred Securities.
If the Junior Subordinated Debentures are redeemed for cash and the
proceeds of such redemption distributed to holders in redemption of their
Preferred Securities, a holder would recognize gain or loss as if it sold such
redeemed Preferred Securities for cash. See "Sale of Preferred Securities"
immediately below.
61
<PAGE> 62
Sale of Preferred Securities
A holder who sells Preferred Securities will be considered to have disposed
of all or part of its pro rata share of the Junior Subordinated Debentures and
will recognize gain or loss equal to the difference between the amount realized
on the sale and the holder's adjusted tax basis in such Preferred Securities. A
holder's adjusted tax basis in the Preferred Securities generally will be its
initial purchase price decreased by principal payments received on the Preferred
Securities. If the OID rules apply to the Junior Subordinated Debentures, a
holder's adjusted tax basis is increased by OID includible in income and
decreased by distributions or other payments received on the Junior Subordinated
Debentures (other than interest that is not treated as OID) since and including
the day that the Junior Subordinated Debentures became subject to the OID rules.
Any such gain or loss generally will be capital gain or loss (except to the
extent of any accrued interest with respect to such holder's pro rata share of
the Junior Subordinated Debentures required to be included in income as ordinary
income) and will be long-term capital gain or loss if such holder's holding
period for such Preferred Securities is more than one year at the time of sale.
If the Junior Subordinated Debentures are subject to the OID rules, a
holder who disposes of its Preferred Securities between record dates for
payments of distributions thereon will be required to include OID on the Junior
Subordinated Debentures through the date of disposition in income as ordinary
income, and to add such amount to its adjusted tax basis. To the extent the
amount recognized on the sale is less than the holder's adjusted tax basis
(which basis will include all accrued but unpaid OID), a holder will recognize a
capital loss. Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for U.S. Federal income tax purposes.
Conversion of Preferred Securities into Shares
A holder of Preferred Securities will not recognize income, gain or loss
upon the conversion, through the Property Trustee, as Conversion Agent, of
Junior Subordinated Debentures into Shares (although the holder will be required
to continue to accrue any OID through the date of conversion). The holder will
recognize gain upon the receipt of cash in lieu of a fractional share of Capital
Stock. Such gain will be equal to the amount of cash received less the holder's
tax basis in such fractional share.
A holder's tax basis and holding period in the Shares received upon
conversion of Preferred Securities will generally be equal to the holder's tax
basis and holding period in the Preferred Securities, except that a holder's tax
basis will be reduced by the basis allocated to any fractional shares for which
cash is received.
Adjustment of Conversion Price
Treasury Regulations promulgated under Section 305 of the Code would treat
holders of Preferred Securities as having received a constructive distribution
from the Company if the Applicable Conversion Ratio of the Junior Subordinated
Debentures were adjusted and both (i) as a result of such adjustment, the
proportionate interest (measured by the number of Shares into which the Junior
Subordinated Debentures are convertible) of the holders of the Preferred
Securities in the assets or earnings and profits of Company were increased, and
(ii) the adjustment was not made pursuant to a bona fide, reasonable
antidilution formula. An adjustment in the conversion ratio would not be
considered made pursuant to such a formula if the adjustment was made to
compensate for certain taxable distributions with respect to the Shares. Thus,
under certain circumstances, a reduction in the conversion price for the holders
may result in deemed dividend income to holders to the extent of the current or
accumulated earnings and profits of the Company. Holders of the Preferred
Securities would be required to include their allocable share of such deemed
dividend income in gross income but would not receive any cash related thereto.
Foreign Holders
Payments on the Preferred Securities and Shares
If the Preferred Securities are treated as indebtedness for U.S. Federal
income tax purposes, no withholding tax would be imposed provided that the
Foreign Holder met certain certification requirements.
62
<PAGE> 63
However, if the Preferred Securities constitute equity for U.S. Federal
income tax purposes, payments made on the Preferred Securities to a Foreign
Holder will be subject to withholding of U.S. Federal income tax at a rate of
30% or such lower rate as may be specified in an applicable income tax treaty
unless the dividend is effectively connected with the conduct of a trade or
business in the United States.
Because the Junior Subordinated Debentures may be classified as equity,
rather than indebtedness, of the Company for U.S. Federal income tax purposes,
the Company will withhold U.S. Federal income tax at a rate of 30%, or such
lower rate as may be provided by an applicable income tax treaty.
A Foreign Holder that is eligible for a reduced rate of withholding tax
pursuant to an applicable income tax treaty may submit documentation to the
Company in order to avail itself of such treaty. Foreign Holders may obtain a
refund of any excess amounts withheld by filing an appropriate claim for refund
with the IRS.
If a Foreign Holder is treated as receiving a deemed dividend as a result
of the adjustment of the conversion price of the Preferred Securities as
described above, such deemed dividend will generally be subject to the same
rules.
Under current regulations, dividends paid to an address in a foreign
country are presumed to be paid to a resident of that country for the purpose of
determining the applicable income tax treaty rate. Recently finalized Treasury
regulations contain certain certification requirements with respect to payments
of dividends made after December 31, 2000.
Conversion
A Foreign Holder will be subject to the same rules described above under
"-- Conversion of Preferred Securities Into Shares" on the conversion of the
Preferred Securities into Shares.
Sale of Preferred Securities or Shares
A Foreign Holder will not be subject to tax on any gain (except for gain
attributable to accrued and unpaid interest, which would be treated as interest
subject to the rules described above) recognized upon the sale or other
disposition of the Preferred Securities or Shares unless (i) the Foreign Holder
is an individual who is present in the United States for 183 days or more in the
taxable year of disposition, and certain other conditions apply or (ii) the gain
is effectively connected with the conduct by the Foreign Holder of a trade or
business in the United States.
INFORMATION REPORTING AND BACKUP WITHHOLDING
Annual tax information reporting requirements generally will apply to
interest paid or accrued on the Preferred Securities, distributions made with
respect to the Shares and sale or redemption proceeds received on the Preferred
Securities or the Shares to which it converts, and such amounts may be subject
to a "backup" withholding tax of 31% unless the holder complies with certain
identification requirements. Any withheld amounts will be allowed as a credit
against the holder's U.S. Federal income tax liability, provided the holder
provides the required information to the IRS.
The United States Treasury Department has issued final Treasury regulations
governing information reporting and the certification procedures regarding
withholding and backup withholding on certain amounts paid to Foreign Holders
after December 31, 2000. Such regulations, among other things, may change the
certification procedures relating to the receipt by intermediaries of payments
on behalf of a beneficial owner of Preferred Securities.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR
GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S
PARTICULAR SITUATION. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT
TO THE TAX CONSEQUENCES TO THEM OF THE EXCHANGE OFFER AND OF THE OWNERSHIP OF
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN U.S. FEDERAL OR OTHER
TAX LAWS.
63
<PAGE> 64
CERTAIN ERISA CONSIDERATIONS
The Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
and the Code impose certain requirements on employee benefit plans and certain
other retirement plans and arrangements, including individual retirement
accounts and annuities, that are subject to ERISA and the Code (all of which are
hereinafter referred to as "ERISA Plans") and on persons who are fiduciaries
with respect to such ERISA Plans. In accordance with ERISA's general fiduciary
standards, before acquiring Preferred Securities in the Exchange Offer, an ERISA
Plan fiduciary should determine whether such an acquisition is permitted under
the governing ERISA Plan instruments and is appropriate for the ERISA Plan in
view of its overall investment policy and the composition and diversification of
its portfolio. Other provisions of ERISA and the Code prohibit certain
transactions involving the assets of an ERISA Plan and persons who have certain
specified relationships to the ERISA Plan ("parties in interest" within the
meaning of ERISA or "disqualified persons" within the meaning of the Code).
Thus, an ERISA Plan fiduciary considering acquiring Preferred Securities in the
Exchange Offer should also consider whether such acquisition might constitute or
give rise to a prohibited transaction under ERISA or the Code, or whether any
exemption to the prohibited transaction rules may apply.
In addition, under Section 2510.3-101 of the United States Department of
Labor Regulations (the "Regulation"), if immediately after any acquisition of
Preferred Securities, 25 percent or more of the value of the Preferred
Securities is held by ERISA Plans, employee benefit plans not subject to ERISA
(for example, governmental plans) and entities whose underlying assets include
plan assets by reason of a plan's investment in the entity, then the assets of
the Trust (including the Junior Subordinated Debentures) would be treated as
assets of ERISA Plans holding Preferred Securities, unless another exemption or
exception applied. In such event, the persons providing services with respect to
the assets of the Trust may be subject to the fiduciary responsibility
provisions of Title I of ERISA and the prohibited transaction provisions of
ERISA and Section 4975 of the Code with respect to transactions involving such
assets. In order to avoid certain prohibited transactions that might otherwise
arise in connection with the Trust assets, each investing ERISA Plan, by its
acquisition of Preferred Securities, will be deemed to have directed the Trustee
to acquire the Junior Subordinated Debentures and to have approved all of the
documents relating to the Trust assets. Moreover, the holders of Preferred
Securities will have the right to direct the Property Trustee as to the exercise
of remedies in connection with any Event of Default.
ANY ERISA PLAN PROPOSING TO ACQUIRE PREFERRED SECURITIES IN THE EXCHANGE
OFFER SHOULD CONSULT WITH ITS COUNSEL REGARDING THE APPLICATION OF ERISA, THE
CODE AND THE REGULATION WITH RESPECT TO AN INVESTMENT IN PREFERRED SECURITIES.
64
<PAGE> 65
Any questions or requests for assistance or for additional copies of this
Offering Circular, the Letter of Transmittal or the Notice of Guaranteed
Delivery may be directed to the Information Agent. Holders of Shares may also
contact their broker, dealer, commercial bank, trust company or other nominee
for assistance concerning the Exchange Offer.
THE INFORMATION AGENT FOR THE EXCHANGE OFFER IS:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
TELEPHONE: (800) 848-2998
FROM OUTSIDE THE U.S. OR CANADA, CALL COLLECT: (212) 269-5550
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each holder of the Shares or such
holder's broker, dealer, commercial bank, trust company or other nominee to the
Exchange Agent at its address set forth below.
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
SHAREOWNER SERVICES
161 NORTH CONCORD EXCHANGE STREET
SOUTH SAINT PAUL, MINNESOTA 55075-1139
FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(651) 450-4163
TO CONFIRM RECEIPT OF
NOTICE OF GUARANTEED DELIVERY:
(651) 450-4110
<PAGE> 1
Exhibit a(2)
LETTER OF TRANSMITTAL
TO TENDER SHARES OF CAPITAL STOCK OF
CHEMED CORPORATION
PURSUANT TO THE OFFERING CIRCULAR
DATED DECEMBER 23, 1999
THE EXCHANGE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON JANUARY 21, 2000, UNLESS THE EXCHANGE
OFFER IS EXTENDED.
TO: NORWEST BANK MINNESOTA, N.A., EXCHANGE AGENT
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
NORWEST BANK MINNESOTA, N.A. NORWEST BANK MINNESOTA, N.A.
P.O. BOX 64858 161 NORTH CONCORD EXCHANGE STREET
ST. PAUL, MINNESOTA 55164-0858 SOUTH ST. PAUL, MINNESOTA 55075-1139
ATTENTION: REORGANIZATION DEPARTMENT ATTENTION: REORGANIZATION DEPARTMENT
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN THOSE SHOWN ABOVE DOES
NOT CONSTITUTE A VALID DELIVERY.
This Letter of Transmittal is to be used only if (a) certificates for
Shares (as defined below) are to be delivered with it or (b) unless an Agent's
Message (as defined in the Offering Circular dated December 23, 1999 (the
"Offering Circular")) is utilized, Shares are being delivered by book-entry
transfer to the account maintained by the Exchange Agent at The Depository Trust
Company ("DTC" or the "Book-Entry Transfer Facility") as set forth under the
"The Exchange Offer -- Procedures for Tendering Shares" in the Offering
Circular.
Holders whose certificates for Shares are not immediately available (or who
cannot follow the procedure for book-entry transfer on a timely basis) or who
cannot transmit this Letter of Transmittal and all other required documents to
the Exchange Agent before the Expiration Date (as defined in the Offering
Circular) may nevertheless tender their Shares according to the guaranteed
delivery procedure set forth under "The Exchange Offer -- Procedures for
Tendering Shares" in the Offering Circular. See Instruction 2.
DELIVERY OF THE LETTER OF TRANSMITTAL AND THE OTHER REQUIRED DOCUMENTS TO
THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
- --------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
(SEE INSTRUCTIONS 2, 3 AND 4)
<TABLE>
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN EXACTLY AS NAME(S) APPEAR(S) ON SHARES TENDERED
CERTIFICATE(S)) (ATTACH ADDITIONAL LIST IF NECESSARY)
- ---------------------------------------------------------------------------------------------------------------------
NUMBER OF
SHARES NUMBER OF
CERTIFICATE REPRESENTED BY SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------
[ ] PLEASE CHECK HERE IF CERTIFICATE(S) FOR PART OR ALL OF
YOUR SHARES HAVE BEEN
LOST, STOLEN, MISPLACED OR DESTROYED. SEE INSTRUCTION 2. TOTAL SHARES
- ---------------------------------------------------------------------------------------------------------------------
* NEED NOT BE COMPLETED IF SHARES ARE DELIVERED BY BOOK-ENTRY TRANSFER.
** UNLESS OTHERWISE INDICATED, IT WILL BE ASSUMED THAT ALL SHARES REPRESENTED BY ANY CERTIFICATES DELIVERED TO THE
EXCHANGE AGENT ARE BEING TENDERED. SEE INSTRUCTION 4.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 2
2
IF YOU ARE A PARTICIPANT IN THE DIVIDEND REINVESTMENT PLAN, THE NUMBER OF SHARES
ON THE LABEL AFFIXED TO THIS LETTER OF TRANSMITTAL INCLUDES SHARES HELD BY YOU
IN THE DIVIDEND REINVESTMENT PLAN, IF ANY. IN ORDER TO TENDER ANY SHARES IN THE
DIVIDEND REINVESTMENT PLAN, YOU MUST FILL OUT THE BOX BELOW.
- -----------------------------------------------------------------------------
DIVIDEND REINVESTMENT PLAN SHARES
(SEE INSTRUCTION 12)
This section is to be completed ONLY by participants in the Dividend
Reinvestment Plan who wish to tender Shares held in the Dividend Reinvestment
Plan. Participants in the Dividend Reinvestment Plan should note that if at any
time a participant's ownership of Capital Stock falls below 25 Shares, such
participant will be automatically terminated from the Dividend Reinvestment
Plan. Fractional Shares will not be accepted for exchange in the Exchange Offer.
[ ] Check here to instruct the Exchange Agent to tender on behalf of the
undersigned ALL Shares (except fractional Shares) credited to the Dividend
Reinvestment Plan account of the undersigned (including any Shares purchased
after December 23, 1999 and credited to such account).
[ ] Check here to instruct the Exchange Agent to tender on behalf of the
undersigned the following number of Shares credited to the Dividend
Reinvestment Plan account of the undersigned:
Shares: _____________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 11)
To be completed ONLY if Shares are being tendered by or on behalf of a person
owning beneficially and of record an aggregate of fewer than 100 Shares,
including any Shares held in the Dividend Reinvestment Plan. Participants in the
Dividend Reinvestment Plan should note that if at any time a participant's
ownership of Capital Stock falls below 25 Shares, such participant will be
automatically terminated from the Dividend Reinvestment Plan. Fractional Shares
will not be accepted for exchange in the Exchange Offer. The undersigned either
(check one box):
[ ] is the beneficial or record owner of an aggregate of fewer than 100 Shares,
all of which are being tendered;
OR
[ ] is a broker dealer, commercial bank, trust company, or other nominee that
(a) is tendering for the beneficial owner(s) thereof, Shares with respect to
which it is the record owner and (b) believes, based upon representations
made to it by such beneficial owner(s), that each such person is the
beneficial owner of an aggregate of fewer than 100 Shares and is tendering
all of such Shares.
_____________________________________________________________________________
[ ] CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT AT THE BOOK-ENTRY
TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution: __________________________________________
Account Number at the Book-Entry Transfer Facility: _____________________
Transaction Code Number: ________________________________________________
[ ] CHECK HERE IF CERTIFICATES FOR TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of the Tendering Holder(s): ______________________________________
Date of Execution of Notice of Guaranteed Delivery: ______________________
Name of Institution Which Guaranteed Delivery: ___________________________
If Delivered by Book-Entry Transfer, Give
Account Number at the Book Entry Transfer Facility: ______________________
Transaction Code Number: _________________________________________________
<PAGE> 3
3
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Chemed Corporation, a Delaware
corporation (the "Company"), and Chemed Capital Trust, a Delaware statutory
business trust (the "Trust"), the above-described shares (the "Shares") of
Capital Stock, par value $1 per share (the "Capital Stock"), of the Company, in
exchange for Convertible Trust Preferred Securities representing undivided
beneficial interests in the assets of the Trust (the "Preferred Securities"), on
the basis of one Preferred Security for each Share validly tendered and accepted
for exchange, upon the terms and subject to the conditions set forth in the
Offering Circular, receipt of which is hereby acknowledged, and in this Letter
of Transmittal (which together constitute the "Exchange Offer"). Shares not
accepted for exchange because of proration will be returned. Fractional Shares
will not be accepted in the Exchange Offer. Fractional Shares resulting from
proration will be rounded up or down, as appropriate, to the nearest full Share
before being accepted for exchange.
Subject to and effective upon acceptance for exchange of the Shares
tendered herewith in accordance with the terms of the Exchange Offer (including,
if the Exchange Offer is extended or amended, the terms or conditions of any
such extension or amendment), the undersigned hereby sells, assigns and
transfers to or upon the order of the Company and the Trust all right, title and
interest in and to all the Shares tendered hereby that are exchanged pursuant to
the Exchange Offer and hereby irrevocably constitutes and appoints the Exchange
Agent for the Exchange Offer (the "Exchange Agent") the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Shares, with full
power of substitution (such power of attorney being deemed to be an irrevocable
power coupled with an interest), to:
(a) deliver certificates for such Shares, or transfer ownership of such
Shares on the account books maintained by the Book-Entry Transfer
Facility, together, in any such case, with all accompanying evidence of
transfer and authenticity, to or upon the order of the Company and the
Trust;
(b) present certificates for such Shares for cancellation and transfer of
such Shares on the Company's books; and
(c) receive all benefits and otherwise exercise all rights of beneficial
ownership of such Shares, all in accordance with the terms of the
Exchange Offer.
The undersigned hereby represents and warrants that:
(a) the undersigned "owns" the Shares tendered hereby within the meaning of
Rule 14e-4 promulgated under the Securities Exchange Act of 1934, as
amended, and has full power and authority to validly tender, sell,
assign and transfer the Shares tendered hereby;
(b) the tender of Shares by the undersigned complies with Rule 14e-4;
(c) when and to the extent the Company and the Trust accept the Shares for
exchange, the Company and the Trust will acquire good, marketable and
unencumbered title thereto, free and clear of all security interests,
liens, charges, encumbrances, conditional sales agreements or other
obligations relating to their sale or transfer, and not subject to any
adverse claim;
(d) on request, the undersigned will execute and deliver any additional
documents the Exchange Agent, the Company or the Trust deems necessary
or desirable to complete the assignment, transfer and exchange of the
Shares tendered hereby; and
(e) the undersigned has read and agrees to all the terms of the Exchange
Offer.
The undersigned understands that, upon acceptance by the Company and the
Trust of the Shares tendered hereby, the undersigned will be deemed to have
waived all right with respect to any dividends on such Shares.
The undersigned understands that tenders of Shares pursuant to any one of
the procedures described under "The Tender Offer -- Procedures for Tendering
Shares" in the Offering Circular and in the instructions hereto will constitute
a binding agreement among the undersigned, the Company and the Trust upon the
terms and subject to the conditions of the Exchange Offer.
The undersigned recognizes that, under certain circumstances set forth in
the Offering Circular, the Company and the Trust may terminate or amend the
Exchange Offer or may not be required to accept for exchange any of the Shares.
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall survive the death or incapacity of the undersigned, and any
obligation of the undersigned hereunder shall be binding upon the heirs,
personal representatives, successors and assigns of the undersigned. Except as
stated in the Exchange Offer, this tender is irrevocable.
<PAGE> 4
4
Unless otherwise indicated under "Special Issuance Instructions," please
deliver Preferred Securities and/or return or issue the certificate(s)
evidencing any Shares not tendered or not accepted for exchange in the name(s)
of the registered holder(s) appearing under "Description of Shares Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver Preferred Securities and/or the certificate(s) evidencing any
Shares not tendered or not accepted for exchange (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered". In the event that both the "Special Delivery
Instructions" and the "Special Issuance Instructions" are completed, please
issue Preferred Securities and/or issue or return the certificate(s) evidencing
any Shares not tendered or accepted for exchange in the name(s) of, and deliver
said check and/or certificate(s) to, the person or persons so indicated. In the
case of book-entry delivery of Shares, please credit the account maintained at
the Book-Entry Transfer Facility indicated above with any Shares not accepted
for exchange. The undersigned recognizes that the Company and the Trust have no
obligation pursuant to the "Special Issuance Instructions" to transfer any
Shares from the name(s) of the registered holder(s) thereof if the Company and
the Trust do not accept for exchange any of the Shares so tendered.
- -----------------------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4 AND 8)
To be completed ONLY if certificates for Preferred Securities and/or
certificates for Shares not tendered or not exchanged are to be mailed to
someone other than the undersigned or to the undersigned at an address other
than that shown below the undersigned's signature.
Mail certificates and check to:
Name __________________________________________
(PLEASE PRINT)
Address _______________________________________
________________________________________
_________________________________________
ZIP CODE)
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 4, 5, 6, 7, AND 8)
To be completed ONLY if certificates for Preferred Securities and/or
certificates for Shares not tendered or not exchanged are to be registered and
issued in the name of someone other than the undersigned.
Issue any certificates and check to:
Name __________________________________________
(PLEASE PRINT)
Address _______________________________________
_______________________________________
(ZIP CODE)
_______________________________________
(TAXPAYER IDENTIFICATION NUMBER)
- -----------------------------------------------------------------------------
<PAGE> 5
5
- -----------------------------------------------------------------------------
SIGN HERE
(SEE INSTRUCTIONS 1 AND 5)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 BELOW)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) OF OWNER(S)
Name(s) ________________________________________________________________________
(PLEASE PRINT)
________________________________________________________________________________
Capacity (full title) __________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
Taxpayer Identification Number _________________________________________________
(SEE INSTRUCTION 10)
Dated: _________________________________________________________________________
(Must be signed by registered holder(s) exactly as name(s) appear(s) on
certificate(s) for Shares or on a security position listing or by person(s)
authorized to become registered holder(s) by certificates and documents
transmitted herewith. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, agent, officer of a corporation or other person
acting in a fiduciary or representative capacity, please set forth full title.
See Instruction 5.)
GUARANTEE OF SIGNATURE(S)
(SEE INSTRUCTIONS 1 AND 5)
Authorized Signature ___________________________________________________________
Name ___________________________________________________________________________
(PLEASE PRINT)
Title __________________________________________________________________________
Name of Firm ___________________________________________________________________
Address ________________________________________________________________________
________________________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number _________________________________________________
Dated: _________________________________________________________________________
<PAGE> 6
6
IMPORTANT TAX INFORMATION
Under U.S. Federal income tax law, a holder whose tendered Shares are
accepted for exchange is required by law to provide the Exchange Agent with such
holder's correct taxpayer identification number ("TIN") on the Substitute Form
W-9 below. If the Exchange Agent is not provided with the correct TIN, the
Internal Revenue Service may subject the holder or other payee to a $50 penalty.
In addition, cash payments that are made to such holder or other payee with
respect to Shares exchanged pursuant to the Exchange Offer may be subject to 31%
backup withholding.
Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements and should indicate their status by writing "exempt" across the
face of the Substitute Form W-9. In order for a foreign individual to qualify as
an exempt recipient, the holder must submit a Form W-8, signed under penalties
of perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Exchange Agent. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for more instructions.
If backup withholding applies, 31% of any such cash payments to be made to
the holder or other payee will be withheld. Backup withholding is not an
additional tax. Rather, the tax liability of persons subject to backup
withholding will be reduced by the amount of tax withheld. If withholding
results in an overpayment of taxes, a refund may be obtained from the Internal
Revenue Service.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the 31% will be withheld
on all cash payments made prior to the time a properly certified TIN is provided
to the Exchange Agent.
WHAT NUMBER TO GIVE THE EXCHANGE AGENT
The holder is required to give the Exchange Agent the TIN (e.g., social
security number or employer identification number) of the record owner of the
Shares or of the last transferee appearing on the transfers attached to, or
endorsed on, the certificates evidencing the Shares. If the Shares are
registered in more than one name or are not registered in the name of the actual
owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
<PAGE> 7
7
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
SUBSTITUTE
PART I -- PLEASE PROVIDE YOUR TIN IN THE BOX SOCIAL SECURITY NUMBER(S)
FORM W-9 AT RIGHT AND CERTIFY BY SIGNING AND DATING
BELOW
/ /
PAYER'S REQUEST FOR TAXPAYER -------------------------------
IDENTIFICATION NUMBER (TIN) OR
AND CERTIFICATION EMPLOYER IDENTIFICATION NUMBER(S)
/
-------------------------------
--------------------------------------------------------------------------------
PART II
AWAITING TIN [ ]
CERTIFICATION -- UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE.
NAME ---------------------------------------------------------------------------
(PLEASE PRINT)
ADDRESS-------------------------------------------------------------------------
--------------------------------------------------------------------------------
(INCLUDING ZIP CODE)
SIGNATURE--------------------------------------------------------------------
DATE---------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU
CHECKED THE BOX IN PART 2 OF SUBSTITUTE FORM W-9
-----------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I CERTIFY UNDER PENALTIES OF PERJURY THAT A TAXPAYER IDENTIFICATION NUMBER
HAS NOT BEEN ISSUED TO ME, AND EITHER (a) I HAVE MAILED OR DELIVERED AN
APPLICATION TO RECEIVE A TAXPAYER IDENTIFICATION NUMBER TO THE APPROPRIATE
INTERNAL REVENUE SERVICE CENTER OR SOCIAL SECURITY ADMINISTRATION OFFICE OR (b)
I INTEND TO MAIL OR DELIVER AN APPLICATION IN THE NEAR FUTURE. I UNDERSTAND
THAT, NOTWITHSTANDING THAT I HAVE CHECKED THE BOX IN PART 2 (AND COMPLETED THIS
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER), ALL REPORTABLE CASH
PAYMENTS MADE TO ME BEFORE THE TIME I PROVIDE THE EXCHANGE AGENT WITH A PROPERLY
CERTIFIED TAXPAYER IDENTIFICATION NUMBER WILL BE SUBJECT TO A 31% BACKUP
WITHHOLDING TAX.
- ------------------------------------------- -------------------------
SIGNATURE DATE
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF 31% OF ANY CASH PAYMENT MADE TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
<PAGE> 8
8
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations, and brokerage
houses) that is a participant in the Securities Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Program or the Stock
Exchanges Medallion Program (each such entity being hereinafter referred to as
an "Eligible Institution"). Signatures on this Letter of Transmittal need not be
guaranteed if (a) this Letter of Transmittal is signed by the registered owner
of the Shares (which term, for purposes of this document, shall include any
participant in the Book-Entry Transfer Facility whose name appears on a security
position listing as the owner of Shares) tendered herewith and such owner has
not completed either of the boxes entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on this Letter of Transmittal or (b) such Shares
are tendered for the account of an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Shares; Guaranteed Delivery
Procedures. This Letter of Transmittal is to be used only if (a) certificates
are being forwarded with it to the Exchange Agent or (b) unless an Agent's
Message is utilized, delivery of Shares is to be made by book-entry transfer
pursuant to the procedure set forth under "The Exchange Offer--Procedures for
Tendering Shares" in the Offering Circular. Certificates for all physically
delivered Shares, or a timely confirmation (a "Book-Entry Confirmation") of a
book-entry transfer of all Shares delivered electronically into the Exchange
Agent's account at the Book-Entry Transfer Facility, together in each case with
a properly completed and duly executed Letter of Transmittal (or a facsimile
thereof), with any required signature guarantees, or an Agent's Message in the
case of a book-entry delivery, and any other documents required by this Letter
of Transmittal, must be received by the Exchange Agent at one of its addresses
set forth on the front page of this Letter of Transmittal before the Expiration
Date (as defined in the Offering Circular). Delivery of documents to the
Book-Entry Transfer Facility does not constitute delivery to the Exchange Agent.
Holders whose certificates are not immediately available (or who cannot
follow the procedures for book-entry transfer on a timely basis) or who cannot
transmit this Letter of Transmittal and all other required documents to reach
the Exchange Agent before the Expiration Date, may nevertheless tender their
Shares pursuant to the guaranteed delivery procedures set forth under "The
Exchange Offer -- Procedures for Tendering Shares" in the Offering Circular.
Pursuant to such procedures: (a) such tender must be made by or through an
Eligible Institution, (b) the Exchange Agent must receive (by hand, mail or
facsimile transmission), before the Expiration Date, a properly completed and
duly executed Notice of Guaranteed Delivery substantially in the form the
Company and the Trust have provided with the Offering Circular and (c) the
certificates for all tendered Shares in proper form for transfer (or a
Book-Entry Confirmation), together with a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or an Agent's Message in the case of a book-entry delivery, and any
other documents required by this Letter of Transmittal, must be received by the
Exchange Agent within three New York Stock Exchange trading days after the date
of execution of such Notice of Guaranteed Delivery, all as provided under "The
Exchange Offer -- Procedures for Tendering Shares" in the Offering Circular.
Holders of Shares whose certificates for part or all of their Shares have
been lost, stolen, misplaced or destroyed must so indicate in the box entitled
"Description of Shares Tendered."
THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES FOR SHARES,
THIS LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE ELECTION
AND RISK OF THE TENDERING HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH
RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
No alternative, conditional or contingent tenders will be accepted, and no
fractional Shares will be exchanged. By executing this Letter of Transmittal (or
a facsimile thereof), each tendering holder waives any right to receive any
notice of the acceptance of such holder's tender.
3. Inadequate Space. If the space provided in the box entitled "Description
of Shares Tendered" is inadequate, the certificate numbers and/or the number of
Shares should be listed on a separate signed schedule and attached to this
Letter of Transmittal.
<PAGE> 9
9
4. Partial Tenders and Unpurchased Shares. (Not applicable to holders who
deliver Shares by book-entry transfer.) If fewer than all the Shares evidenced
by any certificate delivered to the Exchange Agent are to be tendered, fill in
the number of Shares that are to be tendered in the box entitled "Description of
Shares Tendered". If such Shares are exchanged, a new certificate for the
remainder of the Shares evidenced by the old certificate(s) will be sent to and
in the name of the registered holder(s) (unless otherwise specified by such
holder(s) having completed either or both of the boxes entitled "Special
Delivery Instructions" or "Special Issuance Instructions" on this Letter of
Transmittal) as soon as practicable following the expiration or termination of
the Exchange Offer. All Shares represented by the certificate(s) listed and
delivered to the Exchange Agent will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal; Stock Powers; and Endorsements.
(a) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, the signature(s) must correspond exactly with the
name(s) as written on the face of the certificates without any change
whatsoever.
(b) If any of the Shares tendered herewith are registered in the names of
two or more joint owners, each such owner must sign this Letter of Transmittal.
(c) If any of the Shares tendered herewith are registered in different
names on different certificates, it will be necessary to complete, sign and
submit as many separate Letters of Transmittal as there are different
registrations of certificates.
(d) If this Letter of Transmittal is signed by the registered holder(s) of
the Shares tendered herewith, no endorsements of certificates or separate stock
powers are required unless Preferred Securities are to be issued and/or
certificates for Shares not tendered or not exchanged are to be issued to a
person other than the registered holder(s). If this Letter of Transmittal is
signed by a person other than the registered holder(s) of the Shares tendered
herewith, however, the certificates must be endorsed or accompanied by
appropriate stock powers, in either case, signed exactly as the name(s) of the
registered holder(s) appear on the certificates for such Shares. Signatures on
any such certificates or stock powers must be guaranteed by an Eligible
Institution. See Instruction 1.
(e) If this Letter of Transmittal or any certificates or stock powers are
signed by a trustee, executor, administrator, guardian, attorney-in-fact, agent,
officer of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing and proper evidence
satisfactory to the Company and the Trust of the authority of such person so to
act must be submitted.
6. Stock Transfer Taxes. The Company and the Trust will pay any stock
transfer taxes with respect to the transfer of Shares to the Trust or its order
pursuant to the Exchange Offer. If, however, Preferred Securities are to be
issued to, or certificates for Shares not tendered or accepted for exchange are
to be registered in the name of, any person other than the registered holder, or
if tendered certificates are registered in the name of any person other than the
person(s) signing this Letter of Transmittal, the amount of any stock transfer
taxes (whether imposed on the registered holder or such person) payable on
account of the transfer to such person will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering holder.
7. Irregularities. All questions as to the number of Shares to be accepted
and the validity, form, eligibility (including time of receipt) and acceptance
for exchange of any tender of Shares will be determined by the Company and the
Trust, in their sole discretion, which determination shall be final and binding
on all parties. The Company and the Trust reserve the absolute right to reject
any or all tenders determined by them not to be in proper form or the acceptance
for exchange of which may, in the opinion of counsel to the Company and the
Trust, be unlawful. The Company and the Trust also reserve the absolute right to
waive any of the conditions of the Exchange Offer and any defect or irregularity
in the tender of any particular Shares. The interpretation of the terms and
conditions of the Exchange Offer (including these instructions) by the Company
and the Trust shall be final and binding on all parties. No tender of Shares
will be deemed properly made until all defects or irregularities have been cured
or waived. None of the Company, the Trust, the Exchange Agent, the Information
Agent or any other person is or will be obligated to give notice of any defects
or irregularities in tenders, and none of them will incur any liability for
failure to give any such notice.
8. Special Issuance and Delivery Instructions. If the Preferred Securities
are to be issued, or any Shares not tendered or not exchanged are to be returned
in the name of, a person other than the person(s) signing this Letter of
Transmittal or if the
<PAGE> 10
10
Preferred Securities or any certificates for Shares not tendered or not
exchanged are to be mailed to someone other than the person(s) signing this
Letter of Transmittal or to the person(s) signing this Letter of Transmittal at
an address other than that shown in the box entitled "Description of Shares
Tendered", the boxes entitled "Special Issuance Instructions" and/or "Special
Delivery Instructions" on this Letter of Transmittal should be completed.
9. Request for Assistance or Additional Copies. Requests for assistance or
additional copies of the Offering Circular, this Letter of Transmittal or the
Notice of Guaranteed Delivery may be directed to the Information Agent at its
addresses or telephone numbers set forth below.
10. Substitute Form W-9. Except as provided above under "Important Tax
Information", each tendering holder is required to provide the Exchange Agent
with a correct TIN on Substitute Form W-9 which is provided under "Important Tax
Information" above. Failure to provide the information on the form may subject
the tendering holder to a $50 penalty and a 31% Federal back-up withholding tax
may be imposed on the cash payments made to the holder or other payee with
respect to Shares exchanged pursuant to the Exchange Offer.
11. Odd Lots. As described in the Offering Circular, if the Company and the
Trust purchase fewer than all Shares tendered before the Expiration Date and not
withdrawn, the Shares purchased first will consist of all Shares tendered by any
holder who owns of record or owns beneficially an aggregate of fewer than 100
Shares, including any Shares held in the Dividend Reinvestment Plan (an "Odd Lot
Holder"). This preference will not be available unless the box entitled "Odd
Lots" is completed. If any Shares tendered by an Odd Lot Holder are held in the
Dividend Reinvestment Plan, the box entitled "Dividend Reinvestment Plan Shares"
must also be completed. Participants in the Dividend Reinvestment Plan should
note that if at any time a participant's ownership of Capital Stock falls below
25 Shares, such participant will be automatically terminated from the Dividend
Reinvestment Plan. Fractional Shares will not be accepted for exchange in the
Exchange Offer. See Instruction 12.
12. Dividend Reinvestment Plan. If a holder of Shares desires to tender
Shares credited to the holder's account under the Dividend Reinvestment Plan,
the box entitled "Dividend Reinvestment Plan Shares" should be completed. A
participant in the Dividend Reinvestment Plan may complete such box on only one
Letter of Transmittal submitted by such participant. If such participant is an
Odd Lot Holder and desires to have all of such participant's Shares purchased,
the box entitled "Odd Lots" must also be completed. Participants in the Dividend
Reinvestment Plan should note that if at any time a participant's ownership of
Capital Stock falls below 25 Shares, such participant will be automatically
terminated from the Dividend Reinvestment Plan. Fractional Shares will not be
accepted for exchange in the Exchange Offer. See Instruction 11.
If a holder tenders Shares held in the Dividend Reinvestment Plan, all such
Shares (except fractional Shares) credited to such holder's account(s)
(including any Shares purchased after December 23, 1999 and credited to such
account(s)), will be tendered, unless otherwise specified above in the box
entitled "Dividend Reinvestment Plan Shares." In the event that the box entitled
"Dividend Reinvestment Plan Shares" is not completed, no Shares held in the
tendering holder's account will be tendered.
<PAGE> 11
11
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each holder of Shares or such holder's
broker, dealer, commercial bank, trust company or other nominee to the Exchange
Agent at one of its addresses set forth below.
THE INFORMATION AGENT FOR THE EXCHANGE OFFER IS:
D.F. KING & CO., INC.
77 WATER STREET
NEW YORK, NEW YORK 10005
TELEPHONE: (800) 848-2998
FROM OUTSIDE THE U.S. OR CANADA, CALL COLLECT: (212) 269-5550
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
NORWEST BANK MINNESOTA, N.A.
BY MAIL: BY HAND OR OVERNIGHT COURIER:
NORWEST BANK MINNE NORWEST BANK MINNESOTA, N.A.
P.O. BOX 64 161 NORTH CONCORD EXCHANGE STREET
ST. PAUL, MINNESOTA SOUTH ST. PAUL, MINNESOTA 55075-1139
ATTENTION: REORGANIZATION ATTENTION: REORGANIZATION DEPARTMENT
TELEPHONE: (800) 380-1372
- -------------------------------------------------------------------------
ANY QUESTIONS OR REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE
OFFERING CIRCULAR, THIS LETTER OF TRANSMITTAL OR THE NOTICE OF GUARANTEED
DELIVERY MAY BE DIRECTED TO THE INFORMATION AGENT. HOLDERS MAY ALSO CONTACT
THEIR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER NOMINEE FOR
ASSISTANCE CONCERNING THE EXCHANGE OFFER.
- -------------------------------------------------------------------------
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYOR Social Security numbers have nine digits separated by two hyphens: i.e.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen, i.e., 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------- ---------------------------------------------------------------
GIVE THE GIVE THE EMPLOYER
FOR THIS TYPE OF ACCOUNT SOCIAL SECURITY FOR THIS TYPE OF ACCOUNT IDENTIFICATION
NUMBER OF -- NUMBER OF --
- --------------------------------------------------------------- ---------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account or,
if combined funds,
any one of the
individuals on the
account(1)
3. Husband and wife The actual owner
(joint account) of the account or,
if joint funds,
either person(1)
4. Custodian account of a minor The minor(2)
(Uniform Gift to Minors Act)
5. Adult and minor The adult or,
(joint account) if the minor is the
only contributor,
the minor(3)
6. Account in the name of The ward, minor,
guardian or committee for or incompetent
a designated ward, minor, person(4)
or incompetent person
7. a. The usual revocable savings The grantor-
trust account (grantor is also trustee(3)
trustee)
b. So-called trust account that is The actual owner(3)
not a legal or valid trust under
State law
8. Sole proprietorship account The owner(5)
9. A valid trust, estate, The legal entity (do
or pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(3)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization account
12. Partnership account held in the The partnership
name of the business
13. Association, club or other The organization
tax-exempt organization
14. A broker or registered nominee The broker or
nominee
15. Account with the Department The public entity
of Agriculture in the name of a
public entity (such as a State or local
government, school district, or prison)
that receives agricultural program
payments
</TABLE>
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------- ------------------------------------------
<S> <C>
</TABLE>
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) List first and circle the name of the legal trust, estate or pension trust.
(4) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(5) Show the name of the owner.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Internal Revenue Service Form SS-5, Application for Social
Security Number Card or Form SS-4, Application for Employer Identification
Number at your local office of the Social Security Administration or the
Internal Revenue Service and apply for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- A corporation.
- A financial institution.
- An organization exempt from tax under Section 501(A), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A state, the District of Columbia, a possession of the United States or any
subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government or any
agency or instrumentality thereof.
- An international organization or any agency or instrumentality thereof.
- A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- A real estate investment trust.
- A common trust fund operated by a bank under Section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
Section 4947(a)(1).
- An entity registered at all times under the Investment Company Act of 1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt interest dividends under
Section 852).
- Payments described in Section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under Section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Substitute Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends that
are not subject to information reporting are also not subject to backup
withholding. For details, see Sections 6041, 6041A(a), 6045, and 6050A.
PRIVACY ACT NOTICE. -- Section 6109 requires most recipients of dividend,
interest or other payments to give taxpayer identification numbers to payers who
must report the payments to the IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1993, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER -- If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS -- If you fail to
properly include any portion of an includible payment for interest, dividends,
or patronage dividends in gross income, such failure will be treated as being
due to negligence and will be subject to a penalty of 5% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING -- If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION -- Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX
CONSULTANT OR THE INTERNAL REVENUE SERVICE.
<PAGE> 1
Exhibit a(3)
NOTICE OF GUARANTEED DELIVERY
FOR SHARES OF CAPITAL STOCK
OF
CHEMED CORPORATION
This form or a facsimile hereof must be used to accept the Exchange Offer
(as defined below) if:
(a) certificates for shares of Capital Stock (the "Shares") of Chemed
Corporation, a Delaware corporation (the "Company"), are not
immediately available; or
(b) the procedure for book-entry transfer (set forth under "The Exchange
Offer--Procedures for Tendering Shares" in the Offering Circular dated
December 23, 1999 (the "Offering Circular")) cannot be followed on a
timely basis; or
(c) time will not permit the Letter of Transmittal and all other required
documents to be delivered to the exchange agent for the Exchange Offer
(the "Exchange Agent") before the Expiration Date (as defined in the
Offering Circular).
This form, properly completed and duly executed, may be delivered by hand,
mail or facsimile transmission to the Exchange Agent. See "The Exchange
Offer -- Procedures for Tendering Shares" in the Offering Circular.
TO: NORWEST BANK MINNESOTA, N.A., EXCHANGE AGENT
<TABLE>
<S> <C>
BY MAIL: BY HAND OR OVERNIGHT COURIER:
NORWEST BANK MINNESOTA, N.A. NORWEST BANK MINNESOTA, N.A.
P.O. BOX 64858 161 NORTH CONCORD EXCHANGE STREET
ST. PAUL, MINNESOTA 55164-0858 SOUTH ST. PAUL, MINNESOTA 55075-1139
ATTENTION: REORGANIZATION DEPARTMENT ATTENTION: REORGANIZATION DEPARTMENT
</TABLE>
FACSIMILE TRANSMISSION:
(FOR ELIGIBLE INSTITUTIONS ONLY)
(651) 450-4163
TO CONFIRM RECEIPT OF
NOTICE OF GUARANTEED DELIVERY:
(651) 450-4110
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS TO A FACSIMILE NUMBER OTHER THAN THE ONES LISTED
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an "Eligible Institution"
(as defined in the Offering Circular) under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the Letter of Transmittal.
<PAGE> 2
Ladies and Gentlemen:
I hereby tender to the Company and Chemed Capital Trust, upon the terms and
subject to the conditions set forth in the Offering Circular and the related
Letter of Transmittal (which together constitute the "Exchange Offer"), receipt
of which I hereby acknowledge, Shares pursuant to the guaranteed delivery
procedure set forth under "The Exchange Offer--Procedures for Tendering Shares"
in the Offering Circular.
No. of Shares tendered:
- -------------------------------------------------
Certificate Nos.(if available):
- -------------------------------------------------
If Shares will be delivered by book-entry transfer:
Name of Tendering Institution:
- -------------------------------------------------
Account No. at the Book-Entry Transfer Facility:
- -------------------------------------------------
SIGN HERE
- -------------------------------------------------
(Signature(s))
- -------------------------------------------------
(Signature(s))
- -------------------------------------------------
(Name(s)) (Please Print)
- -------------------------------------------------
(Address)
- -------------------------------------------------
(Zip Code)
- -------------------------------------------------
(Area Code and Telephone No.)
ODD-LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially and of record an aggregate of fewer than
100 Shares.
Check one:
[ ] I am the owner beneficially and of record of fewer than 100 Shares in
the aggregate, all of which are being tendered, or
[ ] I am a broker, dealer, commercial bank, trust company or other nominee
who (1) is tendering for the beneficial owners thereof, Shares with
respect to which I am the record owner, and (2) believe, based upon
representations made to me by each such beneficial owner, that such
owner owns beneficially and of record fewer than 100 Shares, and is
tendering all such Shares.
<PAGE> 3
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, an "Eligible Institution," guarantees that (a) the above
named person(s) "own(s)" the Shares tendered hereby within the meaning of Rule
14e-4 under the Securities Exchange Act of 1934, as amended, (b) such tender of
Shares complies with Rule 14e-4 and (c) the Exchange Agent will receive either
the certificates representing the Shares tendered hereby, in proper form for
transfer, or confirmation of the book-entry transfer of such Shares into the
Exchange Agent's account at the Book-Entry Transfer Facility, in any such case
together with a properly completed and duly executed Letter of Transmittal (or a
facsimile thereof), with any required signature guarantees, or an Agent's
Message (as defined in the Offering Circular in the case of a book-entry
delivery), and any other required documents, all within three New York Stock
Exchange trading days after the date of execution of this notice.
<TABLE>
<S> <C>
Name of Firm: Address:
- ------------------------------------------ ------------------------------------------
Authorized Signature Zip Code
Area Code and
Name: Telephone No:
- ------------------------------------------ ------------------------------------------
Please Print
Title: Dated:
------------------------------------ -----------------------------------
</TABLE>
DO NOT SEND SHARE CERTIFICATES WITH THIS FORM. YOUR SHARE CERTIFICATES MUST BE
SENT WITH THE LETTER OF TRANSMITTAL.
<PAGE> 1
Exhibit (a)(4)
CONTACT: Timothy S. O'Toole FOR IMMEDIATE RELEASE
(513) 762-6702
Chemed Announces Offer to Exchange
Convertible Trust Preferred Securities
for Up to Two Million Common Shares
CINCINNATI, December 23, 1999--Chemed Corporation (NYSE:CHE)
today announced the commencement of an exchange offer whereby Convertible Trust
Preferred Securities will be offered to Chemed's common shareholders in exchange
for up to two million outstanding common shares. The offering documents relating
to the exchange offer are being mailed to shareholders today. The exchange offer
is scheduled to expire at midnight on January 24, 2000.
The preferred securities will be exchanged for Chemed common
shares on a one-to-one ratio and will have a liquidation value of $27.00 per
preferred security. The preferred securities will be convertible, at the option
of holders, into Chemed common shares at a conversion price equivalent to $37.00
per common share. Each preferred security will have an annual cash distribution
of $2.00, which is payable quarterly. The offering circular and ancillary
documents contain numerous additional important terms relating to the preferred
securities and the exchange offer.
On November 3, 1999, the new Chemed dividend policy was
announced for the Year 2000 and beyond. Under the new dividend policy, quarterly
dividends
- more -
<PAGE> 2
Chemed, pg. 2
beginning with the March 2000 quarter are expected to be in the range of 10
cents per common share, down from the current rate of 53 cents.
Commenting on the plan, Chemed Chairman and Chief Executive
Officer Edward L. Hutton said, "We look forward to completing the exchange
offer. With Chemed's new dividend policy, the company is solidifying its
position as a growth company and is increasing its commitment to an
already-successful growth strategy. At the same time, the new preferred security
gives our current yield-oriented stockholders an opportunity to maintain a
high-yielding security, along with an appropriate participation in the upside
potential of our various businesses."
The information agent for the offer is D. F. King & Co., Inc.
(telephone: 800-848-2998). Additional copies of the offering documents, if
required, may be obtained from D. F. King. The exchange agent is Norwest Bank
Minnesota, N. A.
Chemed Corporation (www.chemed.com), headquartered in
Cincinnati, is a New York Stock Exchange-listed corporation with strategic
positions in plumbing and drain cleaning; home healthcare services; and
residential appliance and air-conditioning repair.
###
<PAGE> 1
Exhibit a(5)
CHEMED CORPORATION
CHEMED CAPITAL TRUST
OFFER TO EXCHANGE
CHEMED CAPITAL TRUST CONVERTIBLE TRUST PREFERRED SECURITIES
FOR UP TO 2,000,000 OUTSTANDING SHARES OF
CAPITAL STOCK OF CHEMED CORPORATION
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
Chemed Corporation, a Delaware corporation (the "Company"), and Chemed
Capital Trust, a Delaware statutory business trust (the "Trust"), are offering
to exchange Convertible Trust Preferred Securities representing preferred
undivided beneficial interests in the assets of the Trust (the "Preferred
Securities"), for up to 2,000,000 of the outstanding shares (the "Shares") of
Capital Stock, par value $1 per share (the "Capital Stock"), of the Company,
upon the terms and subject to the conditions set forth in the Offering Circular
dated December 23, 1999 (the "Offering Circular"), and in the related Letter of
Transmittal (which together constitute the "Exchange Offer"). Shares not
accepted for exchange because of proration will be returned. The Company and the
Trust enclose herewith the materials listed below relating to the Exchange
Offer.
THE EXCHANGE OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE "THE EXCHANGE
OFFER--CERTAIN CONDITIONS OF THE EXCHANGE OFFER" IN THE OFFERING CIRCULAR.
For your information and for forwarding to your clients for whom you hold
Shares registered in your name or in the name of your nominee, we are enclosing
the following documents:
(1) Offering Circular dated December 23, 1999;
(2) Letter of Transmittal for your use and for the information of your
clients, together with Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 providing information
relating to backup federal income tax withholding;
(3) Notice of Guaranteed Delivery to be used to accept the Exchange Offer
if certificates for Shares are not immediately available (or the
procedure for book-entry transfer cannot be followed on a timely basis)
or time will not permit the Letter of Transmittal and all other
required documents to reach the exchange agent for the Exchange Offer
(the "Exchange Agent") before the Expiration Date (as defined in the
Offering Circular);
(4) Letter to Clients which may be sent to your clients for whose accounts
you hold Shares registered in your name (or in the name of your
nominee), with space provided for obtaining such clients' instructions
with regard to the Exchange Offer; and
(5) Return envelope addressed to Norwest Bank Minnesota, N.A., the Exchange
Agent.
PLEASE BRING THE EXCHANGE OFFER TO THE ATTENTION OF YOUR CLIENTS AS PROMPTLY AS
POSSIBLE. THE EXCHANGE OFFER, THE PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON MONDAY, JANUARY 24, 2000,
UNLESS THE EXCHANGE OFFER IS EXTENDED.
NONE OF THE COMPANY, THE BOARD OF DIRECTORS OF THE COMPANY, THE TRUST NOR THE
ISSUER TRUSTEES (AS DEFINED IN THE OFFERING CIRCULAR) MAKES ANY RECOMMENDATION
AS TO WHETHER ANY HOLDER OF CAPITAL STOCK SHOULD TENDER ANY OR ALL OF SUCH
HOLDER'S SHARES PURSUANT TO THE EXCHANGE OFFER. EACH HOLDER OF CAPITAL STOCK
MUST MAKE SUCH HOLDER'S OWN DECISION WHETHER OR NOT TO TENDER SHARES AND, IF SO,
HOW MANY SHARES TO TENDER. AS OF THE DATE OF THIS OFFERING CIRCULAR, EXECUTIVE
OFFICERS AND DIRECTORS OF THE COMPANY DO NOT INTEND TO TENDER SHARES IN THE
EXCHANGE OFFER.
<PAGE> 2
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Exchange Offer. The Company and
the Trust will, however, upon request, reimburse you for customary mailing and
handling expenses incurred by you in forwarding any of the enclosed materials to
your clients. The Company and the Trust will pay any stock transfer taxes with
respect to the transfer and sale of Shares to the Company and the Trust or their
order pursuant to the Exchange Offer, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
In order to take advantage of the Exchange Offer, a duly executed and
properly completed Letter of Transmittal and any other required documents should
be sent to the Exchange Agent with either certificate(s) representing the
tendered Shares or confirmation of their book-entry transfer, all in accordance
with the instructions set forth in the Letter of Transmittal and the Offering
Circular.
As described under "The Exchange Offer--Procedures for Tendering Shares" in
the Offering Circular, tenders may be made even though certificates are not
immediately available (or the procedure for book-entry transfer cannot be
followed on a timely basis) or time will not permit the Letter of Transmittal
and all other required documents to reach the Exchange Agent before the
Expiration Date, if such tenders are made by or through an "Eligible
Institution" (as defined in the Offering Circular). Certificates for Shares so
tendered in proper form for transfer (or a confirmation of a book-entry transfer
of such Shares into the Exchange Agent's account at the "Book-Entry Transfer
Facility" described in the Offering Circular), together with a properly
completed and duly executed Letter of Transmittal (or a facsimile thereof), with
any required signature guarantees, or an Agent's Message (as defined in the
Offering Circular) in the case of a book-entry delivery, and any other documents
required by the Letter of Transmittal, must be received by the Exchange Agent
within three New York Stock Exchange trading days after the date of execution of
a properly completed and duly executed Notice of Guaranteed Delivery.
Any questions you have or requests for additional copies of the enclosed
material may be directed to the Information Agent at its addresses and telephone
numbers set forth on the back cover of the enclosed Offering Circular.
Very truly yours,
Chemed Corporation
Chemed Capital Trust
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON THE AGENT OF THE COMPANY, THE TRUST, THE EXCHANGE AGENT OR
THE INFORMATION AGENT OR AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY
STATEMENTS OR USE ANY MATERIAL ON BEHALF OF ANY OF THEM WITH RESPECT TO THE
EXCHANGE OFFER, OTHER THAN THE MATERIAL ENCLOSED HEREWITH AND THE STATEMENTS
SPECIFICALLY CONTAINED IN SUCH MATERIAL.
<PAGE> 1
Exhibit a(6)
CHEMED CORPORATION
CHEMED CAPITAL TRUST
OFFER TO EXCHANGE
CONVERTIBLE TRUST PREFERRED SECURITIES OF CHEMED CAPITAL TRUST
FOR UP TO 2,000,000 OUTSTANDING SHARES OF
CAPITAL STOCK OF CHEMED CORPORATION
To Our Clients:
Enclosed for your consideration are the Offering Circular dated December
23, 1999 (the "Offering Circular"), and the related Letter of Transmittal (which
together constitute the "Exchange Offer") in connection with the offer by Chemed
Corporation, a Delaware corporation (the "Company"), and Chemed Capital Trust, a
Delaware statutory business trust (the "Trust"), to exchange Convertible Trust
Preferred Securities representing preferred undivided beneficial interests in
the assets of the Trust (the "Preferred Securities"), for up to 2,000,000 of the
outstanding shares (the "Shares") of Capital Stock, par value $1 per share (the
"Capital Stock"), of the Company, upon the terms and subject to the conditions
of the Exchange Offer. In connection with the Exchange Offer, the Company will
deposit in the Trust as trust assets its Convertible Junior Subordinated
Debentures due 2030 as set forth in the Offering Circular.
Pursuant to the Exchange Offer, exchanges will be made on the basis of one
Preferred Security for each Share validly tendered and accepted for exchange in
the Exchange Offer. Shares not accepted for exchange because of proration will
be returned.
The Company and the Trust will accept for exchange up to 2,000,000 Shares
validly tendered and not withdrawn, upon the terms and subject to the conditions
of the Exchange Offer, including the provisions thereof relating to proration
described in the Offering Circular.
We are the holder of record of Shares held for your account. As such, we
are the only ones who can tender your Shares, and then only pursuant to your
instructions. THE LETTER OF TRANSMITTAL IS FOR YOUR INFORMATION ONLY AND CANNOT
BE USED BY YOU TO TENDER SHARES WE HOLD FOR YOUR ACCOUNT.
Please instruct us as to whether you wish us to tender any of or all the
Shares we hold for your account upon the terms and subject to the conditions of
the Exchange Offer.
We call your attention to the following:
1. You may tender any portion of or all your Shares.
2. The Exchange Offer is subject to certain conditions. See "The Exchange
Offer-- Conditions to the Exchange Offer" in the Offering Circular.
3. The Exchange Offer, the proration period and withdrawal rights will
expire at 12:00 midnight, New York City time, on Monday, January 24,
2000, unless the Exchange Offer is extended.
4. The Trust and the Company expressly reserve the right, in their sole
discretion, subject to applicable law, to (i) terminate the Exchange
Offer, and not accept for exchange any Shares and promptly return all
Shares upon the failure of any of the conditions specified in "The
Exchange Offer--Conditions to the Exchange Offer" in the Offering
Circular, (ii) waive any condition to the Exchange Offer and accept
Shares previously tendered pursuant to the Exchange Offer, (iii) extend
the Expiration Date (as defined in the Offering Circular) of the
Exchange Offer and retain all Shares tendered pursuant to such Exchange
Offer until the Expiration Date, subject, however, to all withdrawal
rights of holders, (iv) amend the terms of the Exchange Offer, (v)
modify the form of the consideration to be paid pursuant to the Exchange
Offer or (vi) not accept for exchange the Shares at any time on or prior
to the Expiration Date, for any reason. Any amendment applicable to the
Exchange Offer will apply to all Shares tendered pursuant to the
Exchange Offer. During any extension of the Exchange Offer, all Shares
previously tendered pursuant to the Exchange Offer and not withdrawn
will remain subject to the Exchange Offer.
<PAGE> 2
5. Tendering holders will not be obligated to pay any brokerage
commissions, solicitation fees, or, subject to Instruction 6 of the
Letter of Transmittal, any stock transfer taxes with respect to the
transfer of Shares to the Company and the Trust pursuant to the Exchange
Offer.
If you wish to have us tender any of or all your Shares, please so instruct
us by completing, executing and returning to us the attached instruction form.
An envelope to return your instruction form to us is enclosed. If you authorize
us to tender your Shares, we will tender all such Shares unless you specify
otherwise on the instruction form.
YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT US TO SUBMIT
A TENDER ON YOUR BEHALF BEFORE THE EXPIRATION DATE. THE EXCHANGE OFFER, THE
PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MONDAY, JANUARY 24, 2000, UNLESS THE EXCHANGE OFFER IS EXTENDED.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY AND THE TRUST
ACCEPT TENDERS FROM OR ON BEHALF OF, OWNERS OF SHARES RESIDING IN ANY
JURISDICTION IN WHICH THE MAKING OF THE EXCHANGE OFFER OR ITS ACCEPTANCE WOULD
NOT BE IN COMPLIANCE WITH THE LAWS OF SUCH JURISDICTION.
<PAGE> 3
INSTRUCTIONS
WITH RESPECT TO THE
OFFER TO EXCHANGE CONVERTIBLE TRUST PREFERRED SECURITIES OF CHEMED CAPITAL TRUST
FOR UP TO 2,000,000 OUTSTANDING SHARES OF
CAPITAL STOCK OF CHEMED CORPORATION
The undersigned acknowledge(s) receipt of your letter and the enclosed Offering
Circular dated December 23, 1999 and the related Letter of Transmittal (which
together constitute the "Exchange Offer"), in connection with the offer by
Chemed Corporation, a Delaware corporation (the "Company"), and Chemed Capital
Trust, a Delaware statutory business trust (the "Trust"), to exchange
Convertible Trust Preferred Securities representing preferred undivided
beneficial interests in the assets of the Trust, for up to 2,000,000 of the
outstanding shares (the "Shares") of Capital Stock, par value $1 per share, of
the Company.
The undersigned hereby instruct(s) you to tender to the Company and the Trust
the number of Shares indicated below or, if no number is indicated, all Shares
you hold for the account of the undersigned, upon the terms and subject to the
conditions of the Exchange Offer.
AGGREGATE NUMBER OF SHARES TO BE TENDERED BY YOU FOR THE ACCOUNT OF THE
UNDERSIGNED:*
____________ SHARES
*Unless otherwise indicated, all the Shares held for the account of the
undersigned will be tendered.
SIGNATURE BOX
Signature(s)
- ----------------------------------------------------------------
Dated __________________________________________________________
Name(s) and Address(es) ________________________________________
(Please Print)
- ----------------------------------------------------------------
- ----------------------------------------------------------------
Area Code and Telephone Number _________________________________
Taxpayer Identification or
Social Security Number _________________________________________
<PAGE> 1
Exhibit (b)(1)
------------------------------
DECLARATION OF TRUST
Chemed Capital Trust
Dated as of December 21, 1999
------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
Definitions
SECTION 1.01. Definitions.................................... 1
ARTICLE II
Organization
SECTION 2.01. Name........................................... 4
SECTION 2.02. Office......................................... 4
SECTION 2.03. Purpose........................................ 4
SECTION 2.04. Authority...................................... 4
SECTION 2.05. Title to Property of the Trust................. 5
SECTION 2.06. Powers of the Trustees......................... 5
SECTION 2.07. Filing of Certificate of Trust................. 6
SECTION 2.08. Duration of Trust.............................. 6
SECTION 2.09. Responsibilities of the Sponsor................ 6
SECTION 2.10. Declaration Binding on Securities
Holders.......................... 7
ARTICLE III
Trustees
SECTION 3.01. Trustees....................................... 7
SECTION 3.02. Administrative Trustees........................ 7
SECTION 3.03. Delaware Trustee............................... 8
SECTION 3.04. Property Trustee............................... 8
SECTION 3.05. Not Responsible for Recitals or
Sufficiency of Declaration....... 8
ARTICLE IV
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 4.01. Exculpation.................................... 9
SECTION 4.02. Fiduciary Duty................................. 9
SECTION 4.03. Indemnification................................ 10
SECTION 4.04. Outside Businesses............................. 14
ARTICLE V
Amendments, Termination, Miscellaneous
i
<PAGE> 3
SECTION 5.01. Amendments..................................... 14
SECTION 5.02. Termination of Trust........................... 15
SECTION 5.03. Governing Law.................................. 15
SECTION 5.04. Headings....................................... 15
SECTION 5.05. Successors and Assigns......................... 15
SECTION 5.06. Partial Enforceability......................... 16
SECTION 5.07. Counterparts................................... 16
ii
<PAGE> 4
DECLARATION OF TRUST
OF
Chemed Capital Trust
December 21, 1999
DECLARATION OF TRUST ("Declaration") dated and effective as of
December 21, 1999, by the Trustees (as defined herein), the Sponsor (as defined
herein), and by the holders, from time to time, of undivided beneficial
interests in the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a
trust (the "Trust") pursuant to the Delaware Business Trust Act for the sole
purpose of issuing and offering to exchange Preferred Securities (as defined
herein) representing undivided beneficial interests in the assets of the Trust
for outstanding shares of capital stock $1 par value, of the Parent ("Parent
Stock") and exchanging these shares and Common Securities (as defined herein)
for certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the exclusive benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
Definitions
SECTION 1.01. Definitions. Unless the context otherwise
requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.01;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
<PAGE> 5
2
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration of Trust as modified, supplemented or amended
from time to time;
(d) all references in this Declaration to Articles and
Sections are to Articles and Sections of this Declaration unless
otherwise specified; and
(e) a reference to the singular includes the plural and vice
versa.
"Administrative Trustee" means any Trustee other than the
Delaware Trustee and the Property Trustee (as hereinafter defined).
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking
institutions in New York, New York or Wilmington, Delaware are authorized or
required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code Section 3801 et seq., as it may be amended from time
to time, or any successor legislation.
"Certifcate of Trust" means the Certificate of Trust of Chemed
Capital Trust, substantially in the form attached hereto as Exhibit A, to be
filed pursuant to Section 3810 of the Business Trust Act.
"Commission" means the Securities and Exchange
Commission.
"Common Security" means a security representing an undivided
beneficial interest in the assets of the Trust with such terms as may be set out
in any amendment to this Declaration.
"Company Indemnified Person" means (a) any Administrative
Trustee; (b) any Affiliate of any Administrative Trustee; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Administrative Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means (a) any trustee, officer, director,
shareholder, partner, member, representative,
<PAGE> 6
3
employee or agent of (i) the Trust or (ii) the Trust's Affiliates and (b) any
holder of Securities.
"Debenture Issuer" means the Parent in its capacity as the
issuer of the Debentures under the Indenture.
"Debentures" means the series of Debentures to be issued by
the Debenture Issuer pursuant to the Indenture and acquired by the Trust.
"Debenture Trustee" means the trustee under the Indenture
until a successor is appointed thereunder, and thereafter means such successor
trustee.
"Delaware Secretary of State" means the officer of the
Secretary of the State of Delaware.
"Delaware Trustee" has the meaning set forth in Section 3.01.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time or any successor legislation.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 4.03(b).
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the indenture to be entered into between the
Parent and the Debenture Trustee and any indenture supplemental thereto
pursuant to which the Debentures are to be issued.
"Parent" means Chemed Corporation, a Delaware corporation, or
any successor entity in a merger.
"Parent Stock" has the meaning set forth in the Whereas clause
at the beginning of the Declaration of 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 Security" means a security representing an
undivided beneficial interest in the assets of the Trust
<PAGE> 7
4
with such terms as may be set out in any amendment to this Declaration.
"Property Trustee" has the meaning set forth in Section 3.04.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Sponsor" means the Parent in its capacity as sponsor of the
Trust.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with
the provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
Organization
SECTION 2.01. Name. The Trust created by this Declaration is
named "Chemed Capital Trust". The Trust's activities may be conducted under the
name of the Trust or any other name deemed advisable by the Administrative
Trustees.
SECTION 2.02. Office. The address of the principal office of
the Trust is c/o Chemed Corporation, 2600 Chemed Center, 255 East Fifth Street,
Cincinnati, Ohio 45202-4726. At any time, the Administrative Trustees may
designate another principal office.
SECTION 2.03. Purpose. The exclusive purposes and functions of
the Trust are (a) to issue and offer Preferred Securities in exchange for
outstanding shares of Parent Stock and to exchange such shares of Parent
Stock,and issue shares of Common Securities,for Debentures, and (b) except as
otherwise limited herein, to engage in only those other activities necessary or
incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any
<PAGE> 8
5
activity that would cause the Trust not to be classified for United States
Federal income tax purposes as a grantor trust.
SECTION 2.04. Authority. Subject to the limitations provided
in this Declaration, the Administrative Trustees shall have exclusive and
complete authority to carry out the purposes of the Trust. An action taken by
the Administrative Trustees in accordance with their powers shall constitute the
act of and serve to bind the Trust. In dealing with the Administrative Trustees
acting on behalf of the Trust, no person shall be required to inquire into the
authority of the Administrative Trustees to bind the Trust. Persons dealing with
the Trust are entitled to rely conclusively on the power and authority of the
Administrative Trustees as set forth in this Declaration.
SECTION 2.05. Title to Property of the Trust. Legal title to
all assets of the Trust shall be vested in the Trust or the Property Trustee on
behalf of the Trust.
SECTION 2.06. Powers of the Trustees. The Administrative
Trustees shall have the exclusive power and authority to cause the Trust to
engage in the following activities:
(a) to issue and offer for exchange the Preferred Securities
and issue the Common Securities in accordance with this Declaration;
provided, however, that the Trust may issue no more than one series of
Preferred Securities and no more than one series of Common Securities,
and, provided further, that there shall be no interests in the Trust
other than the Securities and the issuance of the Securities shall be
limited to a one-time, simultaneous issuance of both Preferred
Securities and Common Securities;
(b) in connection with the issue and offer for exchange of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission a tender
offer statement on Schedule 13E-4 prepared by the Sponsor,
including any amendments thereto in relation to the Preferred
Securities;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the Sponsor to be
necessary in order to qualify or register all or part of the
Preferred Securities in any State in which the Sponsor has
determined
<PAGE> 9
6
to qualify or register such Preferred Securities for sale;
(iii) execute and file an application, prepared by
the Sponsor, to the New York Stock Exchange or any other
national stock exchange or the Nasdaq Stock Market's National
Market for listing upon notice of issuance of any Preferred
Securities; and
(iv) execute and file with the Commission a
registration statement on Form 8-A, including any amendments
thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12(b) of the
Exchange Act; and
(c) to employ or otherwise engage employees and agents (who
may be designated as officers with titles) and managers, contractors,
advisors, and consultants and provide for reasonable compensation for
such services;
(d) to incur expenses which are necessary or incidental to
carry out any of the purposes of this Declaration; and
(e) to execute all documents or instruments, perform all
duties and powers, and do all things for and on behalf of the Trust in
all matters necessary or incidental to the foregoing.
SECTION 2.07. Filing of Certificate of Trust. On or after the
date of execution of this Declaration, the Trustees shall cause the filing of
the Certificate of Trust for the Trust in the form attached hereto as Exhibit A
with the Delaware Secretary of State.
SECTION 2.08. Duration of Trust. The Trust, absent termination
pursuant to the provisions of Section 5.02, shall have existence for fifty-five
(55) years from the date hereof.
SECTION 2.09. Responsibilities of the Sponsor. In connection
with the issue and offer for exchange of the Preferred Securities, the Sponsor
shall have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare for filing by the Trust with the Commission a
tender offer on Schedule 13E-4 in relation
<PAGE> 10
7
to the Preferred Securities, including any amendments thereto;
(b) to determine 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 the Trust, and advise the Trust of actions it must
take, and prepare for execution and filing any documents to be
executed and filed by the Trust, as the Sponsor deems necessary or
advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing by the Trust an application to the
New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any
Preferred Securities; and
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to the registration of the
class of Preferred Securities under Section 12(b) of the Exchange Act,
including any amendments thereto; and
SECTION 2.10. Declaration Binding on Securities Holders. Every
Person by virtue of having become a holder of a Security or any interest therein
in accordance with the terms of this Declaration, shall be deemed to have
expressly assented and agreed to the terms of, and shall be bound by, this
Declaration.
ARTICLE III
Trustees
SECTION 3.01. Trustees. The number of Trustees initially shall
be four (4), and thereafter the number of Trustees shall be such number as shall
be fixed from time to time by a written instrument signed by the Sponsor. The
Sponsor is entitled to appoint or remove without cause any Trustee at any time;
provided further that one Trustee, in the case of a natural person, shall be a
person who is a resident of the State of Delaware or that, if not a natural
person, is an entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); provided further that there shall be at least
one trustee who is an employee or officer of, or is affiliated with the Parent
(a "Administrative Trustee").
<PAGE> 11
8
SECTION 3.02. Administrative Trustees. The initial
Administrative Trustees shall be:
Kevin J. McNamara
Timothy F. O'Toole
Sandra Laney
(a) Except as expressly set forth in this Declaration, any
power of the Administrative Trustees may be exercised by, or with the
consent of, any one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust Act,
any Administrative Trustee is authorized to execute on behalf of the
Trust any documents which the Administrative Trustees have the power
and authority to cause the Trust to execute pursuant to Section 2.06;
and
(c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purposes of signing any
documents which the Administrative Trustees have power and authority to
cause the Trust to execute pursuant to Section 2.06.
SECTION 3.03. Delaware Trustee. The initial Delaware Trustee
shall be:
First Union Trust Company, National Association
One Rodney Square
920 King Street, 1st Floor
Wilmington, Delaware 19801
Notwithstanding any other provision of this Declaration, the
Delaware Trustee shall not be entitled to exercise any of the powers, nor shall
the Delaware Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this Declaration.
The Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
Notwithstanding anything herein to the contrary, the Delaware Trustee shall not
be liable for the acts or omissions to act of the Trust or of the Administrative
Trustees or the Property Trustee except such acts as the Delaware Trustee is
expressly obligated or authorized to undertake under this Declaration or the
Business Trust Act and except for the gross negligence or willful misconduct of
the Delaware Trustee.
<PAGE> 12
9
SECTION 3.04. Property Trustee. Prior to the issuance of the
Preferred Securities and Common Securities, the Sponsor shall appoint another
trustee (the "Property Trustee") meeting the requirements of an eligible trustee
of the Trust Indenture Act of 1939, by the execution of an amendment to this
Declaration executed by the Administrative Trustees, the Sponsor, the Property
Trustee and the Delaware Trustee.
SECTION 3.05. Not Responsible for Recitals or Sufficiency of
Declaration. The recitals contained in this Declaration shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 4.01. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which distributions to holders of Securities might properly be paid.
<PAGE> 13
10
SECTION 4.02. Fiduciary Duty. (a) To the extent that, at law
or in equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity, are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person; (b) unless
otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified Person
shall act in a manner that is, or provides terms that are, fair and
reasonable to the Trust or any holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such
<PAGE> 14
11
express standard and shall not be subject to any other or different
standard imposed by this Declaration or by applicable law.
SECTION 4.03. Indemnification. (a) (i) The Sponsor shall
indemnify, to the fullest extent permitted by law, any Company Indemnified
Person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys, fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of nolo contendere or its equivalent, shall not, of itself, create a
presumption that the Company Indemnified Person did not act in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the fullest extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper.
<PAGE> 15
12
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the Sponsor only as
authorized in the specific case upon a determination that indemnification of the
Company Indemnified Person is proper in the circumstances because he has met
the applicable standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees by a majority
vote of a quorum consisting of such Administrative Trustees who were not parties
to such action, suit or proceeding, (2) if such a quorum is not obtainable, or,
even if obtainable, if a quorum of disinterested Administrative Trustees so
directs, by independent legal counsel in a written opinion, or (3) by the Common
Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a) shall be paid by the Sponsor in advance of the final
disposition of such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by the
Debenture Issuer as authorized in this Section 4.3(a). Notwithstanding the
foregoing, no advance shall be made by the Sponsor if a determination is
reasonably and promptly made (i) by the Administrative Trustees by a majority
vote of a quorum of disinterested Administrative Trustees, (ii) if such a quorum
is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a written
opinion or (iii) the Common Security Holder of the Trust, that, based upon the
facts known to the Administrative Trustees, counsel or the Common Security
Holder at the time such determination is made, such Company Indemnified Person
acted in bad faith or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with respect
<PAGE> 16
13
to any criminal proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrative Trustees, independent
legal counsel or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred Security
Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 4.3(a) shall
not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Debenture Issuer or
Preferred Security Holders of the Trust or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 4.3(a) shall be deemed
to be provided by a contract between the Sponsor and each Company Indemnified
Person who serves in such capacity at any time while this Section 4.3(a) is in
effect. Any repeal or modification of this Section 4.3(a) shall not affect any
rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified Person
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the Sponsor would
have the power to indemnify him against such liability under the provisions of
this Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 4.3(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has
<PAGE> 17
14
ceased to be a Company Indemnified Person and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(b) The Sponsor agrees to indemnify (i) the Delaware Trustee,
(ii) any Affiliate of the Delaware Trustee, and (iii) any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Delaware Trustee (each of the Persons in (i) through
(iii) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability, claim,
action, suit, cost or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
the trust or trusts hereunder, including the 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 4.3(b) shall survive the termination of
this Declaration and the resignation or removal of the Delaware Trustee.
SECTION 4.04. Outside Businesses. Any Covered Person, the
Sponsor and the Delaware Trustee may engage in or possess an interest in other
business ventures of any nature or description, independently or with others,
similar or dissimilar to the business of the Trust, and the Trust and the
holders of Securities shall have no rights by virtue of this Declaration in and
to such independent ventures or the income or profits derived therefrom and the
pursuit of any such venture, even if competitive with the business of the Trust,
shall not be deemed wrongful or improper. No Covered Person, the Sponsor or the
Delaware Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor and the Delaware Trustee shall have the right to take for its own
account (individually or as a partner or fiduciary) or to recommend to others
any such particular investment or other opportunity. Any Covered Person and the
Delaware Trustee may engage or be interested in any financial or other
transaction with the Sponsor or any Affiliate of the Sponsor, or may act as
depositary for, trustee or agent for or may act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
<PAGE> 18
15
ARTICLE V
Amendments, Termination, Miscellaneous
SECTION 5.01. Amendments. At any time before the issue of any
Securities, this Declaration may be amended by, and only by, a written
instrument executed by all of the Administrative Trustees and the Sponsor.
SECTION 5.02. Termination of Trust. (a) The Trust shall
terminate and be of no further force or effect:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the
Sponsor's charter or of the Trust's certificate of trust;
(iii) upon the entry of a decree of judicial dissolution of
the Sponsor, or the Trust; and
(iv) before the issue of any Securities, with the consent of
all of the Administrative Trustees and the Sponsor; and
(b) as soon as is practicable after the occurrence of an event
referred to in Section 5.2(a), the Trustees shall file a certificate of
cancellation with the Delaware Secretary of State.
SECTION 5.03. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. The parties
hereto hereby irrevocably and unconditionally consent to submit to the exclusive
jurisdiction of the courts of the State of Delaware and of the United States
District Courts located in Delaware for any lawsuits, claims or other
proceedings arising out of or relating to this Agreement and agree not to
commence any such lawsuit, claim or other proceeding except in such courts. The
parties hereto hereby irrevocably and unconditionally waive any objection to the
laying of venue of any lawsuit, claim, or other proceeding arising out of or
relating to this Agreement in the courts of the State of Delaware or the United
States District Courts located in Delaware, and hereby further irrevocably and
unconditionally waive and agree not to plead or claim in any such court that any
such
<PAGE> 19
16
lawsuit, claim or other proceeding brought in any such court has been brought in
an inconvenient forum.
SECTION 5.04. Headings. Headings contained in this Declaration
are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 5.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
SECTION 5.06. Partial Enforceability. If any provision of this
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
SECTION 5.07. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart signature pages. All of such counterpart signature pages shall be
read as though one, and they shall have the same force and effect as though all
of the signers had signed a single signature page.
<PAGE> 20
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
-----------------------------------
Name: Kevin J. McNamara
Title: Administrative Trustee
-----------------------------------
Name: Timothy F. O'Toole
Title: Administrative Trustee
-----------------------------------
Name: Sandra Laney
Title: Administrative Trustee
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Delaware Trustee
by
-------------------------------
Name:
Title: Authorized Signatory
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Property Trustee
by
-------------------------------
Name:
Title:
CHEMED CORPORATION, as Sponsor
by
-------------------------------
Name:
Title:
<PAGE> 21
CERTIFICATE OF TRUST
OF
CHEMED CAPITAL TRUST
THIS Certificate of Trust of Chemed Capital Trust (the "Trust)
is being duly executed and filed on behalf of the Trust by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del.C. Section 3810 et seq.)(the "Act").
1. Name. The name of the business trust formed
by this Certificate of Trust is Chemed Capital Trust.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware are First Union Trust Company,
National Association, One Rodney Square, 920 King Street, 1st Floor, Wilmington
Delaware 19801, Attn: Corporate Trust Administration.
3. Effective Date. This Certificate of Trust shall be
effective upon filing.
IN WITNESS WHEREOF, the undersigned have duly executed this
Certificate of Trust in accordance with Section 3811(a)(1) of the Act.
-----------------------------------
Name: Kevin J. McNamara
Title: Administrative Trustee
-----------------------------------
Name: Timothy F. O'Toole
Title: Administrative Trustee
-----------------------------------
Name: Sandra Laney
Title: Administrative Trustee
<PAGE> 22
2
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Delaware Trustee
by
-------------------------------
Name:
Title: Authorized Signatory
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Property Trustee
by
-------------------------------
Name:
Title:
CHEMED CORPORATION, as Sponsor
by
-------------------------------
Name:
Title:
<PAGE> 1
Exhibit(b)(2)
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
Of
CHEMED CAPITAL TRUST
Dated as of January -, 2000
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions .............................................. 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application ......................... 11
SECTION 2.02. Lists of Holders of Securities ........................... 12
SECTION 2.03. Reports by the Property Trustee .......................... 12
SECTION 2.04. Periodic Reports to Property Trustee ..................... 12
SECTION 2.05. Evidence of Compliance with
Conditions Precedent ................................... 13
SECTION 2.06. Events of Default; Waiver ................................ 13
SECTION 2.07. Event of Default; Notice ................................. 15
ARTICLE III
Organization
SECTION 3.01. Name ..................................................... 16
SECTION 3.02. Office ................................................... 16
SECTION 3.03. Purpose .................................................. 16
SECTION 3.04. Authority ................................................ 16
SECTION 3.05. Title to Property of the Trust ........................... 17
SECTION 3.06. Powers and Duties of the
Administrative Trustees ................................ 17
SECTION 3.07. Prohibition of Actions by the Trust
and the Trustees. ...................................... 20
SECTION 3.08. Powers and Duties of the Property
Trustee ................................................ 21
SECTION 3.09. Certain Duties and Responsibilities of
the Property Trustee ................................... 24
SECTION 3.10. Certain Rights of Property Trustee ....................... 26
SECTION 3.11. Delaware Trustee ......................................... 28
SECTION 3.12. Execution of Documents ................................... 29
SECTION 3.13. Not Responsible for Recitals or
Issuance of Securities ................................. 29
SECTION 3.14. Duration of Trust ........................................ 29
SECTION 3.15. Mergers .................................................. 29
</TABLE>
<PAGE> 3
2
<TABLE>
<S> <C> <C>
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common
Securities ............................................. 31
SECTION 4.02. Responsibilities of the Sponsor .......................... 31
SECTION 4.03. Guarantee of Payment of Trust
Obligations ............................................ 32
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees ....................................... 32
SECTION 5.02. Delaware Trustee ......................................... 33
SECTION 5.03. Property Trustee; Eligibility ............................ 33
SECTION 5.04. Qualifications of Administrative
Trustees and Delaware Trustee
Generally .............................................. 34
SECTION 5.05. Initial Trustees ......................................... 34
SECTION 5.06. Appointment, Removal and Resignation
of Trustees ............................................ 35
SECTION 5.07. Vacancies among Trustees ................................. 38
SECTION 5.08. Effect of Vacancies ...................................... 38
SECTION 5.09. Meetings ................................................. 38
SECTION 5.10. Delegation of Power ...................................... 39
SECTION 5.11. Merger, Conversion, Consolidation or
Succession to Business ................................. 39
ARTICLE VI
Distributions
SECTION 6.01. Distributions ............................................ 40
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding
Securities ............................................. 40
SECTION 7.02. Execution and Authentication ............................. 41
SECTION 7.03. Form and Dating .......................................... 42
SECTION 7.04. Registrar, Paying Agent and Conversion
Agent .................................................. 43
SECTION 7.05. Paying Agent to Hold Money in Trust ...................... 44
SECTION 7.06. Outstanding Preferred Securities ......................... 44
</TABLE>
<PAGE> 4
3
<TABLE>
<S> <C> <C>
SECTION 7.07. Preferred Securities in Treasury ......................... 44
SECTION 7.08. Temporary Securities ..................................... 45
SECTION 7.09. Cancelation .............................................. 45
SECTION 7.10. Definitive Securities .................................... 45
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust ..................................... 46
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General .................................................. 47
SECTION 9.02. Transfer Procedures and Restrictions ..................... 49
SECTION 9.03. Deemed Security Holders .................................. 50
SECTION 9.04. Notices to Clearing Agency ............................... 50
SECTION 9.05. Appointment of Successor Clearing
Agency ................................................. 51
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability ................................................ 51
SECTION 10.02. Exculpation .............................................. 51
SECTION 10.03. Fiduciary Duty ........................................... 52
SECTION 10.04. Indemnification .......................................... 53
SECTION 10.05. Outside Businesses ....................................... 53
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year .............................................. 54
SECTION 11.02. Certain Accounting Matters ............................... 54
SECTION 11.03. Banking .................................................. 55
SECTION 11.04. Withholding .............................................. 55
</TABLE>
<PAGE> 5
4
<TABLE>
<S> <C> <C>
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments ............................................... 56
SECTION 12.02. Meetings of the Holders of Securities;
Action by Written Consent .............................. 57
ARTICLE XIII
Representations of Property Trustee
and Delaware Trustee
SECTION 13.01. Representations and Warranties of
Property Trustee ....................................... 58
SECTION 13.02. Representations and Warranties of
Delaware Trustee. ...................................... 59
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices .................................................. 60
SECTION 14.02. Governing Law ............................................ 61
SECTION 14.03. Intention of the Parties ................................. 62
SECTION 14.04. Headings ................................................. 62
SECTION 14.05. Successors and Assigns ................................... 62
SECTION 14.06. Partial Enforceability ................................... 62
SECTION 14.07. Counterparts ............................................. 62
ANNEX I Terms of Convertible Preferred Trust Securities and
Convertible Common Securities
Exhibit A-1 Form of Preferred Security
Exhibit A-2 Form of Common Security
</TABLE>
<PAGE> 6
5
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939 Declaration
- ------------------- -----------
<S> <C>
310(a) ................ 5.03(a)
310(c) ................ Inapplicable
311(c) ................ Inapplicable
312(a) ................ 2.02(a)
312(b) ................ 2.02(b)
313 ................... 2.03
314(a) ................ 2.04
314(b) ................ Inapplicable
314(c) ................ 2.05
314(d) ................ Inapplicable
314(f) ................ Inapplicable
315(a) ................ 3.09(a)
3.09(b)
315(c) ................ 3.09(a)
315(d) ................ 3.09(b)
316(a) ................ Annex I
316(c) ................ 3.06(e)
</TABLE>
- ------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
<PAGE> 7
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
CHEMED CAPITAL TRUST
JANUARY -, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
effective as of January -, 2000, by the undersigned trustees (together with all
other Persons from time to time duly appointed and serving as trustees in
accordance with the provisions of this Declaration, the "Trustees"), Chemed
Corporation, a Delaware corporation, as trust sponsor (the "Sponsor"), and by
the holders, from time to time, of undivided beneficial interests in the Trust
(as defined below) issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor established Chemed Capital Trust
(the "Trust") under the Business Trust Act (as hereinafter defined) pursuant to
a Declaration of Trust dated as of December 21, 1999 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on December 21, 1999, for the sole purpose of issuing and
offering to exchange Preferred Securities representing undivided beneficial
interests in the assets of the Trust for outstanding shares of capital stock,
$1.00 par value, of the Parent ("Parent Stock"), and exchanging the Parent Stock
and Common Securities (as defined herein) for certain Debentures of the
Debenture Issuer (as hereinafter defined); and
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration for
the purpose of issuing and offering to exchange Preferred Securities
representing undivided beneficial interests in the assets of the Trust for
outstanding shares of Parent Stock and exchanging the Parent Stock and the
Common Securities for certain Debentures of the Debenture Issuer; and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Business Trust Act and that this
Declaration constitute the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders,
<PAGE> 8
2
from time to time, of the securities representing undivided beneficial interests
in the assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE I
Interpretation and Definitions
SECTION 1.01. Definitions. Unless the context otherwise
requires:
(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this
Declaration, and any capitalized term not defined in this Declaration shall have
the meaning assigned thereto in the Indenture;
(b) a term defined anywhere in this Declaration or the Indenture has
the same meaning throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles, Sections,
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Declaration unless otherwise specified;
(e) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(g) a reference to the singular includes the plural and vice versa.
"Administrative Action" has the meaning set forth in the
definition of "Tax Event".
"Administrative Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling or controlled by or under direct or indirect common
control with
<PAGE> 9
3
such specified Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct the management
and policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent
or co-registrar.
"Appointment Event" means an event defined in the terms of the
Preferred Securities, as set forth in Annex I, which entitles the Holders of a
Majority in liquidation amount of the Preferred Securities to appoint a Special
Trustee.
"Authorized Officer" of a Person means any Person that is authorized
to bind such Person.
"Beneficiaries" has the meaning set forth in Section
4.03(a).
"Book Entry Interest" means a beneficial interest in a global
certificate, ownership and transfers of which shall be maintained and made
through book entries by a Depositary.
"Business Day" means any day other than a Saturday or a Sunday, a
day on which banking institutions in New York, New York and Wilmington, Delaware
are authorized or required by law to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 et seq., as it may be amended from time to time,
or any successor legislation.
"Certificate" means a certificate in global or definitive form
representing a Common Security or a Preferred Security.
"Certificate of Trust" means the Certificate of Trust of Chemed
Capital Trust, substantially in the form attached hereto as Exhibit A, to be
filed pursuant to Section 3810 of the Business Trust Act.
"Clearing Agency" means an organization registered as a "Clearing
Agency" pursuant to Section 17A of the Exchange Act that is acting as depositary
for the Preferred Securities and in whose name or in the name of a nominee of
that organization shall be registered a global certificate
<PAGE> 10
4
and which shall undertake to effect book entry transfers and pledges of the
Preferred Securities.
"Closing Date" means January -, 2000.
"Code" means the Internal Revenue Code of 1986, or any
successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning specified in Section
7.01(a).
"Common Securities Guarantee" means the guarantee agreement to be
dated as of January -, 2000, of the Sponsor in respect of the Common
Securities.
"Conversion Agent" has the meaning set forth in Section
7.04.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i)
the Trust or (ii) the Trust's Affiliates; and (b) any Holder of
Securities.
"Debenture Event of Default" in respect of the Securities means an
Event of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"Debenture Issuer" means the Sponsor in its capacity as
issuer of the Debentures.
"Debenture Trustee" means Firstar Bank, National Association, a
United States banking corporation, as trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the series of Debentures to be issued by the
Debenture Issuer under the Indenture to be held by the Property Trustee, in the
form attached to the Indenture as Exhibit A.
"Deferral Period" has the meaning set forth in the
Indenture.
"Definitive Preferred Securities" has the meaning set forth
in Section 7.03(c).
<PAGE> 11
5
"Delaware Secretary of State" means the officer of the
Secretary of the State of Delaware.
"Delaware Trustee" has the meaning set forth in Section
5.02.
"Depositary" means The Depository Trust Company, the initial
clearing agency, until a successor shall be appointed pursuant to Section 9.06,
and thereafter means such successor Depositary.
"Distribution" means a distribution payable to Holders of Securities
in accordance with Section 6.01.
"Event of Default" means:
(i) a Debenture Event of Default; or
(ii) default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a period of
30 days (subject to the deferral of any due date in the case of a Deferral
Period); or
(iii) default by the Trust in the payment of any Redemption Price of
any Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect,
of any covenant or warranty of the Trustees in the Declaration (other than
a covenant or warranty, a default in the performance of which or the
breach of which is addressed in clause (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the defaulting Issuer
Trustee or Issuer Trustees by the holders of at least 25% in aggregate
liquidation amount of the outstanding Preferred Securities, a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" under the
Declaration; or
(v) the failure of the Sponsor to appoint a successor Property
Trustee in the manner required by Section 5.06(c).
"Exchange Act" means the Securities Exchange Act of 1934 as amended
from time to time, or any successor legislation.
<PAGE> 12
6
"Global Preferred Securities" has the meaning set forth in
Section 7.03(a).
"Holder" means a Person in whose name a Certificate representing a
Security is registered, such Person being a beneficial owner within the meaning
of the Business Trust Act.
"Indemnified Person" means (a) any Trustee; (b) any Affiliate of any
Trustee; (c) any officers, directors, shareholders, members, partners,
employees, representatives or agents of any Trustee; or (d) any employee or
agent of the Trust or its Affiliates.
"Indenture" means the Indenture dated as of January - , 2000,
between the Debenture Issuer and the Debenture Trustee, as it may be amended
from time to time.
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940 as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.06(g).
"Like Amount" means (i) with respect to a redemption of Preferred
Securities, Preferred Securities having an aggregate liquidation amount equal to
that portion of the principal amount of Debentures to be contemporaneously
redeemed in accordance with the Indenture, allocated to the Common Securities
and to the Preferred Securities based upon the relative liquidation amounts of
such classes and the proceeds of which will be used to pay the applicable
Redemption Price of the Preferred Securities and (ii) with respect to a
distribution of Debentures to holders of Preferred Securities in connection with
a dissolution or liquidation of the Trust, Debentures having a principal amount
equal to the aggregate liquidation amount of the Securities of the Holder to
whom such Debentures are distributed.
"List of Holders" has the meaning set forth in Section
2.02(a).
"Majority in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities and by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as
<PAGE> 13
7
the context may require, Holders of outstanding Preferred Securities or Holders
of outstanding Common Securities voting separately as a class, who are the
record owners of more than 50% of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms
of the Securities as set forth in Annex I.
"Obligations" means any costs, expenses or liabilities of the Trust,
other than obligations of the Trust to pay to Holders of any Securities or other
similar interests in the Trust the amounts due such Holders pursuant to the
terms of the Securities or such other similar interests, as the case may be.
"Offering Circular" means the Offering Circular, dated as of
December 23, 1999, relating to the issuance by the Trust of Preferred Securities
in exchange for Parent Stock.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration (other than pursuant to Section 314(a)(4) of
the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the 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
<PAGE> 14
8
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Parent Stock" has the meaning set forth in the recitals.
"Participants" has the meaning set forth in Section 7.03(b).
"Paying Agent" has the meaning specified in Section 7.04.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Securities" has the meaning specified in Section
7.01(a).
"Preferred Securities Guarantee" means the guarantee agreement to be
dated as of January - , 2000, of the Sponsor in respect of the Preferred
Securities.
"Preferred Security Beneficial Owner" means, with respect to a Book
Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Depositary, or on the books of a
Person maintaining an account with such Depositary (directly as a Participant or
as an indirect participant, in each case in accordance with the rules of such
Depositary).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 5.03.
"Property Trustee Account" has the meaning set forth in
Section 3.08(c).
"Quorum" means a majority of the Administrative Trustees or, if
there are only two Administrative Trustees, both of them.
"Redemption Price" has the meaning set forth in Annex I.
"Registrar" has the meaning set forth in Section 7.04.
<PAGE> 15
9
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property Trustee,
any vice-president, any assistant vice-president, the treasurer, any assistant
treasurer, any trust officer or assistant trust officer or any other officer in
the Corporate Trust Department of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Securities" means the Common Securities and the Preferred
Securities.
"Securities Act" means the Securities Act of 1933 as amended from
time to time, or any successor legislation.
"Securities Custodian" means the custodian with respect to any
Preferred Security in global form.
"Securities Guarantees" means the Preferred Securities
Guarantee and the Common Securities Guarantee.
"Special Trustee" means a trustee appointed by the Holders of a
Majority in liquidation amount of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B).
"Sponsor" means Chemed Corporation, a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.06(d).
"Successor Entity" has the meaning set forth in Section
3.15(b).
"Successor Property Trustee" has the meaning set forth in
Section 5.06(b).
"Successor Securities" has the meaning set forth in Section
3.15(b).
<PAGE> 16
10
"Super Majority" has the meaning set forth in Section
2.06(a)(ii).
"Tax Event" means the Property Trustee shall have received an
opinion of nationally recognized independent tax counsel to the Sponsor
(reasonably acceptable to the Trustees) experienced in such matters (a
"Dissolution Tax Opinion") to the effect that, as a result of (i) any amendment
to or change (including any announced prospective change (which shall not
include a proposed change), provided that a Tax Event shall not occur more than
90 days before the effective date of any such prospective change) in the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, (ii) any judicial decision
or official administrative pronouncement, ruling, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action") or (iii) any amendment to
or change in the administrative position or interpretation of any Administrative
Action or judicial decision that differs from the theretofore generally accepted
position, in each case, by any legislative body, court, governmental agency or
regulatory body, irrespective of the manner in which such amendment or change is
made known, which amendment or change is effective or such Administrative Action
or decision is announced, in each case, on or after the date of original
issuance of the Debentures or the issue date of the Preferred Securities issued
by the Trust, there is more than an insubstantial risk that (a) if the
Debentures are held by the Property Trustee, (I) the Trust is, or will be within
90 days of the date of such opinion, subject to United States Federal income tax
with respect to interest accrued or received on the Debentures or subject to
more than a de minimis amount of other taxes, duties or other governmental
charges as determined by such counsel, or (II) any portion of interest payable
by the Sponsor to the Trust on the Debentures is not, or within 90 days of the
date of such opinion will not be, deductible by the Sponsor in whole or in part
for United States Federal income tax purposes or (b) with respect to Debentures
which are no longer held by the Property Trustee, any portion of interest
payable by the Sponsor on the Debentures is not, or within 90 days of the date
of such opinion will not be, deductible by the Sponsor in whole or in part for
United States Federal income tax purposes.
"10% in liquidation amount of the Securities" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture Act,
Holders of outstanding Securities voting together as a single class or, as
<PAGE> 17
11
the context may require, Holders of outstanding Preferred Securities or Holders
of outstanding Common Securities, voting separately as a class, representing 10%
of the aggregate liquidation amount (including the stated amount that would be
paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Declaration
is subject to the provisions of the Trust Indenture Act that are required to be
part of this Declaration, which are incorporated by reference in and made part
of this Declaration and shall, to the extent applicable, be governed by such
provisions.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310 to
317, inclusive, of the Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the
<PAGE> 18
12
Securities as equity securities representing undivided beneficial interests in
the assets of the Trust.
SECTION 2.02. Lists of Holders of Securities. (a) Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide the
Property Trustee (i) within 14 days after each record date for payment of
Distributions, a list, in such form as the Property Trustee may reasonably
require, of the names and addresses of the Holders of the Securities ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in its capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under
Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Property Trustee. Within 60 days after
March 15 of each year, commencing March 15, 2000, the Property Trustee shall
provide to the Holders of the Preferred Securities such reports as are required
by Section 313(a) of the Trust Indenture Act, if any, in the form and in the
manner provided by Section 313 of the Trust Indenture Act. The Property Trustee
shall also comply with the other requirements of Section 313 of the Trust
Indenture Act.
SECTION 2.04. Periodic Reports to Property Trustee. Each of the
Sponsor and the Administrative Trustees on behalf of the Trust shall provide to
the Property Trustee such documents, reports and information as required by
Section 314(a)(4) of the Trust Indenture Act (if any) and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act,
provided that such compliance certificate shall be delivered on or before 120
days after the end of each fiscal year of the Sponsor.
<PAGE> 19
13
SECTION 2.05. Evidence of Compliance with Conditions Precedent. Each
of the Sponsor and the Administrative Trustees on behalf of the Trust shall
provide to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Declaration that relate to any of the
matters set forth in Section 314(c) of the Trust Indenture Act. Any certificate
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. (a) The Holders of a
Majority in liquidation amount of Preferred Securities may, by vote, on behalf
of the Holders of all of the Preferred Securities, waive any past Event of
Default in respect of the Preferred Securities and its consequences, provided
that, if the Event of Default:
(i) is caused by a Debenture Event of Default that is not waivable
under the Indenture, the Event of Default under the Declaration shall also
not be waivable;
(ii) is caused by a Debenture Event of Default that requires the
consent or vote of greater than a majority in principal amount of the
holders of the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Declaration may only be waived
by the vote of the Holders of at least the proportion in liquidation
amount of the Preferred Securities that the relevant Super Majority
represents of the aggregate principal amount of the Debentures
outstanding;
(iii) is the result of a default by the Trust in the payment of any
Distribution when it becomes due and payable, which default has continued
for 30 days (subject to the deferral of any due date in the case of a
Default Period), the Event of Default shall not be waivable; or
(iv) is the result of a default by the Trust in the payment of any
Redemption Price of any preferred Security when it becomes due and
payable, the Event of Default shall not be waivable.
The foregoing provisions of this Section 2.06(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
<PAGE> 20
14
Upon such waiver, any such default shall cease to exist, and any
Event of Default with respect to the Preferred Securities arising therefrom
shall be deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other default or an Event of
Default with respect to the Preferred Securities or impair any right consequent
thereon. Any waiver by the Holders of the Preferred Securities of an Event of
Default with respect to the Preferred Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of any such Event of
Default with respect to the Common Securities for all purposes of this
Declaration without any further act, vote, or consent of the Holders of the
Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the Event of Default is
caused by a Debenture Event of Default that:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default
under the Declaration as provided below in this Section 2.06(b), the Event
of Default under the Declaration shall also not be waivable; or
(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as provided below in
this Section 2.06(b), the Event of Default under the Declaration may only
be waived by the vote of the Holders of at least the proportion in
liquidation amount of the Preferred Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences until the effects of all Events of Default with
respect to the Preferred Securities have been cured, waived or otherwise
eliminated, and until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Property Trustee in
accordance with the terms
<PAGE> 21
15
of the Securities. The foregoing provisions of this Section 2.06(b) shall be in
lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and
such Section 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.06(b), upon such waiver, any such default shall cease to exist and any Event
of Default with respect to the Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other default or Event of Default with
respect to the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the
Property Trustee at the direction of the Holders of the Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.06(c) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B)
of the Trust Indenture Act is hereby expressly excluded from this Declaration
and the Securities, as permitted by the Trust Indenture Act.
SECTION 2.07. Event of Default; Notice. (a) The Property Trustee
shall, within 90 days after the occurrence of an Event of Default actually known
to the Trustee, (i) transmit by mail, first-class postage prepaid, to the
Holders of the Securities, and (ii) transmit by any means provided for in this
Declaration to the Administrative Trustees and the Sponsor, notices of all
defaults actually known to the Property Trustee, unless such defaults have been
cured before the giving of such notice (the term "defaults" for the purposes of
this Section 2.07(a) being hereby defined to be an Event of Default, not
including any periods of grace and irrespective of the giving of any notice);
provided that, except for a default in the payment of principal of (or premium,
if any) or interest on any of the Debentures or in the payment of any sinking
fund installment established for the Debentures, the Property Trustee shall be
protected in withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or Responsible
Officers of the Property Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge of
any default except:
<PAGE> 22
16
(i) a default under Sections 5.01(1) and 5.01(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall have
received written notice.
ARTICLE III
Organization
SECTION 3.01. Name. The Trust is named "Chemed Capital Trust," as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Securities. The Trust's activities
may be conducted under the name of the Trust or any other name deemed advisable
by the Administrative Trustees.
SECTION 3.02. Office. The address of the principal office
of the Trust is c/o Chemed Corporation, 2600 Chemed Center, 255 East
Fifth Street, Cincinnati, Ohio 45202-4726 Attention: Chief Financial
Officer. On ten Business Days written notice to the Holders of
Securities, the Administrative Trustees may designate another principal
office.
SECTION 3.03. Purpose. The exclusive purposes and functions of the
Trust are (a) to issue and to offer to exchange Preferred Securities for
outstanding shares of Parent Stock and to exchange the Parent Stock and the
Common Securities for certain Debentures of the Debenture Issuer and (b) except
as otherwise limited herein, to engage in only those other activities necessary
or incidental thereto. The Trust shall not borrow money, issue debt or reinvest
proceeds derived from investments, pledge any of its assets, or otherwise
undertake (or permit to be undertaken) any activity that would cause the Trust
not to be classified for United States Federal income tax purposes as a grantor
trust.
SECTION 3.04. Authority. (a) Subject to the limitations provided in
this Declaration and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete authority to carry out
the purposes of the Trust. An action taken by the Administrative Trustees in
accordance with their powers shall constitute the act of and serve to bind the
Trust and an action taken by the Property Trustee in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to inquire
into the
<PAGE> 23
17
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except if
a meeting of the Administrative Trustees is called with respect to any matter
over which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(c) An Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.06.
SECTION 3.05. Title to Property of the Trust. Except as provided in
Section 3.08 with respect to the Debentures and the Property Trustee Account or
as otherwise provided in this Declaration, legal title to all assets of the
Trust shall be vested in the Trust. The Holders shall not have legal title to
any part of the assets of the Trust, but shall have an undivided beneficial
interest in the assets of the Trust.
SECTION 3.06. Powers and Duties of the Administrative Trustees. The
Administrative Trustees shall have, together (except in the case of paragraphs
(a), (b) and (c) of this Section 3.06) with any Special Trustee holding office
pursuant to Section 5.06, if any, the exclusive power, duty and authority to
cause the Trust to engage in the following activities:
(a) to issue and offer to exchange the Preferred Securities and the
Common Securities in accordance with this Declaration; provided, however, that
the Trust may issue no more than one series of Preferred Securities and no more
than one series of Common Securities, and, provided further, that there shall be
no interests in the Trust other than the Securities, and the issuance of
Securities shall be limited to simultaneous issuances of both Preferred
Securities and Common Securities on the Closing Date;
(b) in connection with the issue and offer to exchange pursuant to
the Offering Circular of the Preferred Securities, at the direction of the
Sponsor, to:
<PAGE> 24
18
(i) assist in the preparation of the Offering Circular and Form
13E-4, prepared by the Sponsor, relating to the offer to holders of Parent
Stock to exchange the Preferred Securities for shares of Parent Stock;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Preferred Securities in any State or
foreign jurisdiction in which the Sponsor has determined to qualify or
register such Preferred Securities for sale;
(iii) execute and file an application, prepared by the Sponsor, to
the New York Stock Exchange or any other national stock exchange or the
Nasdaq National Market for listing or quotation of the Preferred
Securities;
(iv) to execute and deliver letters, documents, or instruments with
The Depository Trust Company relating the Preferred Securities; and
(v) execute and file with the Commission, at such time as determined
by the Sponsor, a registration statement on Form 8-A, including any
amendments thereto, prepared by the Sponsor relating to the registration
of the Preferred Securities under Section 12 of the Exchange Act.
(c) to exchange the Parent Stock and the Common Securities for the
Debentures of the Debenture Issuer; provided, however, that the Administrative
Trustees shall cause legal title to the Debentures to be held of record in the
name of the Property Trustee in trust for the benefit of the Holders of the
Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Tax Event; provided that the Administrative
Trustees (and Special Trustee, if any) shall consult with the Sponsor and the
Property Trustee before taking or refraining from taking any Ministerial Action
in relation to a Tax Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
<PAGE> 25
19
(f) to take all actions and perform such duties as may be required
of the Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.08(e), the Property Trustee has
the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under
the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar and
transfer agent for the Securities;
(m) to give prompt written notice to the Holders of the Securities
of any notice received from the Debenture Issuer of its election to defer
payments of interest on the Debentures by extending the interest payment period
under the Indenture;
(n) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Preferred
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration or
with applicable law, that the Administrative Trustees determine in their
discretion to be necessary or
<PAGE> 26
20
desirable in carrying out the activities of the Trust as set out in this Section
3.06, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes,
provided that such action does not adversely affect the interests of
Holders; and
(q) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to the
Trust to be duly prepared and filed by the Administrative Trustees, on behalf of
the Trust.
The Administrative Trustees must exercise the powers set forth in
this Section 3.06 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.03, and the Administrative Trustees shall not
take any action that is inconsistent with the purposes and functions of the
Trust set forth in Section 3.03.
Subject to this Section 3.06, the Administrative Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.08.
Any expenses incurred by the Administrative Trustee (or the Special
Trustee, if any) pursuant to this Section 3.06 shall be reimbursed by the
Debenture Issuer.
SECTION 3.07. Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property Trustee) on
behalf of the Trust shall not, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Trustees (including the Property Trustee) shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such
<PAGE> 27
21
proceeds to Holders of Securities pursuant to the terms of this
Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities; or
(vii) other than as provided in the Declaration or Annex I hereto,
(A) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B)
waive any past default that is waivable under Section 5.13 of the
Indenture, (C) exercise any right to rescind or annul any declaration that
the principal of all the Debentures shall be due and payable, or (D)
consent to any amendment, modification or termination of the Indenture or
the Debentures where such consent shall be required unless, in the case of
each action described in clause (A), (B), (C) or (D), the Trust shall have
received an opinion of counsel to the effect that such modification will
not cause more than an insubstantial risk that for United States federal
income tax purposes the Trust will not be classified as a grantor trust.
SECTION 3.08. Powers and Duties of the Property Trustee. (a) The
legal title to the Debentures shall be owned by and held of record in the name
of the Property Trustee in trust for the benefit of the Holders of the
Securities. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.06. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
<PAGE> 28
22
(b) The Property Trustee shall not transfer its right, title and
interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of funds made in respect of
the Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments to the Holders of the Preferred
Securities and Holders of the Common Securities from the Property Trustee
Account in accordance with Section 6.01. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance with this
Declaration.
(ii) engage in such ministerial activities as so directed and as
shall be necessary or appropriate to effect the redemption of the
Preferred Securities and the Common Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrative Trustees in accordance with the terms of the Securities,
engage in such ministerial activities as so directed as shall be necessary
or appropriate to effect the distribution of the Debentures to Holders of
Securities upon the occurrence of certain special events (as may be
defined in the terms of the Securities) arising from a change in law or a
change in legal interpretation or other specified circumstances pursuant
to the terms of the Securities.
(d) The Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant to the
terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default or the Property Trustee's
duties and obligations under this Declaration or the Trust Indenture Act;
provided, however, that if a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the Sponsor to pay
interest or principal on the Debentures on the date such interest or principal
is otherwise payable (or in the case of redemption, on the redemption date),
then a
<PAGE> 29
23
holder of Preferred Securities may, to the extent permitted by applicable law,
institute a legal proceeding directly for enforcement of payment to such Holder
of the principal of or interest on the Debentures having a principal amount
equal to the aggregate liquidation amount of the Preferred Securities of such
Holder (a "Direct Action") on or after the respective due date specified in the
Securities. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of
Preferred Securities to the extent of any payment made by the Sponsor to such
Holder of Preferred Securities in such Direct Action. In addition, if the
Property Trustee fails to enforce its rights under the Debentures (other than
rights arising from an Event of Default described in the immediately preceding
sentence) after any Holder of Preferred Securities shall have made a written
request to the Property Trustee to enforce such rights, such Holder of Preferred
Securities may, to the fullest extent permitted by law, institute a Direct
Action to enforce the Property Trustee or any other Person. Except as provided
in the preceding sentences, the Holders of Preferred Securities will not be able
to exercise directly any other remedy available to the holders of the
Debentures.
(f) The Property Trustee shall not resign as a Trustee unless
either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to the terms
of the Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 5.06.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the Property
Trustee shall, for the benefit of Holders of the Securities, enforce its rights
as holder of the Debentures subject to the rights of the Holders pursuant to the
terms of such Securities.
(h) The Property Trustee will act as Paying Agent and Registrar in
Cincinnati, Ohio to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all securities and any such
Paying Agent shall comply with Section 317(b) of the Trust Indenture Act. Any
Paying Agent may be removed by the Property Trustee at any time and a successor
Paying Agent or additional Paying Agents may be appointed at any time by the
Property Trustee.
<PAGE> 30
24
(i) Subject to this Section 3.08, the Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Administrative
Trustees set forth in Section 3.06.
The Property Trustee must exercise the powers set forth in this
Section 3.08 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.03, and the Property Trustee shall not take any
action that is inconsistent with the purposes and functions of the Trust set out
in Section 3.03.
SECTION 3.09. Certain Duties and Responsibilities of the Property
Trustee. (a) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Declaration and no implied covenants shall be read into this Declaration against
the Property Trustee. In case an Event of Default has occurred (that has not
been cured or waived pursuant to Section 2.06), the Property Trustee shall
exercise such of the rights and powers vested in it by this Declaration, and use
the same degree of care and skill in their exercise, as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall
be determined solely by the express provisions of this Declaration and the
Property Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this Declaration,
and no implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Property Trustee and
conforming to the re-
<PAGE> 31
25
quirements of this Declaration; but in the case of any such certificates
or opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under a
duty to examine the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred upon the Property
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers;
(v) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Property
Trustee Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or
with respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to
<PAGE> 32
26
Section 3.08(c)(i) and except to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property Trustee
be liable for the default or misconduct of the Administrative Trustees or
the Sponsor.
SECTION 3.10. Certain Rights of Property Trustee. (a) Subject to
the provisions of Section 3.09:
(i) the Property Trustee may rely conclusively and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel of its choice or
other experts and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel
<PAGE> 33
27
to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have provided
to the Property Trustee security satisfactory to the Property Trustee,
against the costs, expenses (including its attorneys' fees and expenses)
and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested in writing by the Property Trustee, provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, security, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property Trustee, in
its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Property Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be
required to inquire as to the authority of the Property Trustee to so act
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
<PAGE> 34
28
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Property Trustee (i) may request instructions from the Holders of the
Securities which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect
of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with such
instructions;
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Declaration; and
(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 3.11. Delaware Trustee. Notwithstanding any other provision
of this Declaration other than Section 5.02, the Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities of the Administrative Trustees or the Property
Trustee described in this Declaration. Except as set forth in Section 5.02, the
Delaware Trustee shall be a Trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
<PAGE> 35
29
SECTION 3.12. Execution of Documents. Unless otherwise determined by
the Administrative Trustees, and except as otherwise required by the Business
Trust Act, any Administrative Trustee is authorized to execute on behalf of the
Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.06; provided that, the registration
statement referred to in Section 3.06(b)(i), including any amendments thereto,
shall be signed by a majority of the Administrative Trustees.
SECTION 3.13. Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the Securities shall
be taken as the statements of the Sponsor, and the Trustees do not assume any
responsibility for their correctness. The Trustees make no representations as to
the value or condition of the property of the Trust or any part thereof. The
Trustees make no representations as to the validity or sufficiency of this
Declaration or the Securities.
SECTION 3.14. Duration of Trust. The Trust, unless terminated
pursuant to the provisions of Article VIII hereof, shall exist until - , 20[ ].
SECTION 3.15. Mergers. (a) The Trust may not consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to any corporation or
other entity or person, except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of a majority of the
Administrative Trustees and without the consent of the Holders of the
Securities, the Delaware Trustee or the Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State or the District of Columbia; provided that:
(i) if the Trust is not the surviving entity, the successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") as long as the Successor Securities rank, with respect to
participation in the profits and distributions or in the assets of the
Successor
<PAGE> 36
30
Entity at least as high as the Preferred Securities rank with
respect to participation in the profits and dividends or in the assets of
the Trust;
(ii) the Debenture Issuer expressly acknowledges such Successor
Entity as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation or replacement does
not cause the Preferred Securities (including any Successor Securities) to
be downgraded by any nationally recognized statistical rating
organization;
(v) such merger, consolidation, amalgamation or replacement does not
adversely affect the powers, preferences and other special rights of the
Holders of the Preferred Securities (including any Successor Securities)
in any material respect;
(vi) such Successor Entity has a purpose substantially identical to
that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of a nationally
recognized independent counsel (reasonably acceptable to the Property
Trustee) to the Trust experienced in such matters to the effect that:
(A) the Successor Entity will be treated as a grantor trust for
United States federal income tax purposes;
(B) following such merger, consolidation, amalgamation or
replacement, neither the Sponsor nor the Successor Entity will be required
to register as an Investment Company; and
(C) such merger, consolidation, amalgamation or replacement will not
adversely affect the limited liability of the Holders of the Securities
(including any Successor Securities); and
(viii) the Sponsor provides a guarantee to the Holders of the
Successor
<PAGE> 37
31
Securities with respect to the Successor Entity having substantially the
same terms as the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Common
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE IV
Sponsor
SECTION 4.01. Sponsor's Purchase of Common Securities. On the
Closing Date the Sponsor will purchase an amount of Common Securities issued by
the Trust such that the aggregate liquidation amount of such Common Securities
purchased by the Sponsor shall at such date equal 3% of the total capital of the
Trust.
SECTION 4.02. Responsibilities of the Sponsor. In connection with
the issue and offer to exchange of the Preferred Securities, the Sponsor shall
have the exclusive right and responsibility to engage in the following
activities:
(a) to prepare the Offering Circular;
(b) to determine the states and foreign jurisdictions in which to
take appropriate action to qualify or register for sale all or part of the
Preferred Securities and to do any and all such acts, other than actions which
must be taken by the Trust, and advise the Trust of actions it must take, and
prepare for execution and filing any documents to be executed and filed by the
Trust, as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States and foreign jurisdictions;
(c) to prepare for filing by the Trust an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq National
Market for listing or quotation of the Preferred Securities; and
(d) to prepare for filing by the Trust with the Commission a
registration statement on Form 8-A relating to
<PAGE> 38
32
the registration of the Preferred Securities under Section 12 of the Exchange
Act, including any amendments thereto.
SECTION 4.03. Guarantee of Payment of Trust Obligations. (a) Subject
to the terms and conditions of this Section 4.03, the Sponsor hereby irrevocably
and unconditionally guarantees to each Person to whom the Trust is now or
hereafter becomes indebted or liable (the "Beneficiaries") the full payment,
when and as due, of any and all Obligations to such Beneficiaries.
(b) The agreement of the Sponsor in Section 4.03(a) is intended to
be for the benefit of, and to be enforceable by, all such Beneficiaries, whether
or not such Beneficiaries have received notice hereof.
(c) The agreement of the Sponsor set forth in Section 4.03(a) shall
terminate and be of no further force and effect upon the later of (a) the date
on which full payment has been made of all amounts payable to all Holders of all
the Preferred Securities (whether upon redemption, liquidation, exchange or
otherwise) and (b) the date on which there are no Beneficiaries remaining;
provided, however, that such agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any Holder of Preferred
Securities or any Beneficiary must restore payment of any sums paid under the
Preferred Securities, under any Obligation, under the Preferred Securities
Guarantee or under this Agreement for any reason whatsoever. Such agreement is
continuing, irrevocable, unconditional and absolute.
ARTICLE V
Trustees
SECTION 5.01. Number of Trustees. The number of Trustees
shall initially be five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities:
(i) the number of Trustees may be increased or decreased, except as
provided in Sections 5.01(b)(ii) and 5.06(a)(ii)(B) with respect to the
Special Trustee, by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the
Holders of the Common Securities; and
<PAGE> 39
33
(ii) the number of Trustees shall be increased automatically by one
(1) if an Appointment Event has occurred and is continuing and the Holders
of a Majority in liquidation amount of the Preferred Securities appoint a
Special Trustee in accordance with Section 5.06(a)(ii).
SECTION 5.02. Delaware Trustee. If required by the Business Trust
Act, one Trustee (the "Delaware Trustee") shall be an entity which has its
principal place of business in the State of Delaware, and otherwise meets the
requirements of applicable law, provided that, if the Property Trustee has its
principal place of business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall also be the
Delaware Trustee and Section 3.11 shall have no application.
SECTION 5.03. Property Trustee; Eligibility. (a) There
shall at all times be one Trustee which shall act as Property Trustee
which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal,
State, Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the supervising or examining authority referred to
above, then for the purposes of this Section 5.03(a)(ii), the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. Neither the Sponsor nor any Person directly or indirectly
controlling, controlled by or under common control with the Sponsor shall
serve as Trustee hereunder.
(b) If at any time the Property Trustee shall cease to be eligible
to so act under Section 5.03(a), the Property Trustee shall immediately resign
in the manner and with the effect set forth in Section 5.06(e).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of
<PAGE> 40
34
the Trust Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the obligor referred to in Section 310(b) of the Trust
Indenture Act) shall in all respects comply with the proviso of Section 310(b)
of the Trust Indenture Act, subject to the penultimate paragraph thereof.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause (i) of the
first provision contained in Section 310(b) of the Trust Indenture Act.
SECTION 5.04. Qualifications of Administrative Trustees and Delaware
Trustee Generally. Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.05. Initial Trustees. The initial Administrative
Trustees shall be:
Kevin J. McNamara
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Timothy S. O'Toole
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Sandra Laney
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
The initial Delaware Trustee shall be:
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19810
Attention: Corporate Trust Administration
<PAGE> 41
35
The initial Property Trustee shall be:
Firstar Bank, National Association
425 Walnut Street
6th Floor
Cincinnati, Ohio 45202
Attention: Keith A. Maurmeier
SECTION 5.06. Appointment, Removal and Resignation of
Trustees. (a) Except as provided otherwise in this Section 5.06(b),
Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities:
(A) other than in respect to a Special Trustee, by vote of the
Holders of a Majority in liquidation amount of the Common Securities
voting as a class at a meeting of the Holders of the Common Securities,
unless a Debenture Event of Default shall have occurred and be continuing,
in which event the Property Trustee and the Delaware Trustee may only be
removed by the Holders of a Majority in liquidation amount of the
Preferred Securities, voting as a class at a meeting of the Holders of the
Preferred Securities; and
(B) if an Appointment Event has occurred and is continuing,
one (1) additional trustee (the "Special Trustee"), who shall have the
same rights, powers and privileges as an Administrative Trustee, may be
appointed by vote of the Holders of a Majority in liquidation amount of
the Preferred Securities, voting as a class at a meeting of the Holders of
the Preferred Securities, and such Special Trustee may only be removed
(otherwise than by the operation of Section 5.06(e)), by vote of the
Holders of a Majority in liquidation amount of the Preferred Securities
voting as a class at a meeting of the Holders of the Preferred Securities.
(b) The Trustee that acts as Property Trustee shall not be removed
in accordance with Section 5.06(a) until a successor Property Trustee meeting
the requirements of Section 5.03 (a "Successor Property Trustee") has been
appointed and has accepted such appointment by written instrument executed by
such Successor Property Trustee and delivered to the Administrative Trustees and
the Sponsor.
<PAGE> 42
36
(c) The Sponsor shall remove the Property Trustee by written
instrument upon:
(i) the entry or a decree or order by a court having jurisdiction in
the premises adjudging the Property Trustee as bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Property
Trustee under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Property Trustee or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(ii) the institution by the Property Trustee of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing of
any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Property Trustee or of any substantial part of its property, or the making
by it of an assignment for the benefit of creditors, or the admission by
it in writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by the Property Trustee in furtherance of any such
action; or
The Sponsor shall appoint a Successor Property Trustee within 60 days of such an
event.
(d) The Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 5.06(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 5.02 and 5.04 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware Trustee
and delivered to the Trustees and the Sponsor.
(e) A Trustee appointed to office shall hold office until his
successor shall have been appointed or until his death, removal or resignation,
provided that a Special Trustee
<PAGE> 43
37
shall only hold office while an Appointment Event is continuing and shall cease
to hold office immediately after the Appointment Event pursuant to which the
Special Trustee was appointed and all other Appointment Events cease to be
continuing. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the resigning
Property Trustee; or
(B) until the assets of the Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Securities;
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee; and
(iii) no such resignation of a Special Trustee shall be effective
until the 60th day following delivery of the instrument of resignation of
the Special Trustee to the Sponsor and the Trust or such later date
specified in such instrument during which period the Holders of the
Preferred Securities shall have the right to appoint a successor Special
Trustee as provided in this Section 5.06.
(f) The Holders of the Common Securities shall use their best
efforts to promptly appoint a Successor Property Trustee or Successor Delaware
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 5.06.
(g) If no Successor Property Trustee or Successor Delaware Trustee
shall have been appointed and accepted appointment as provided in this Section
5.06 within 60 days after delivery to the Sponsor and the Trust of an instrument
<PAGE> 44
38
of resignation or removal, the resigning Property Trustee or Delaware Trustee,
resigning or being removed as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Property Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Property Trustee
or Successor Delaware Trustee, as the case may be.
(h) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
SECTION 5.07. Vacancies among Trustees. If a Trustee ceases to hold
office for any reason and the number of Trustees is not reduced pursuant to
Section 5.01, or if the number of Trustees is increased pursuant to Section
5.01, a vacancy shall occur. A resolution certifying the existence of such
vacancy by a majority of the Administrative Trustees shall be conclusive
evidence of the existence of such vacancy. The vacancy shall be filled with a
Trustee appointed in accordance with Section 5.06.
SECTION 5.08. Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to annul the
Trust. Whenever a vacancy in the number of Administrative Trustees shall occur,
until such vacancy is filled by the appointment of a Administrative Trustee in
accordance with Section 5.06, the Administrative Trustees in office, regardless
of their number, shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Declaration.
SECTION 5.09. Meetings. Meetings of the Administrative Trustees
shall be held from time to time upon the call of any Administrative Trustee.
Regular meetings of the Administrative Trustees may be held at a time and place
fixed by resolution of the Administrative Trustees. Notice of any meetings of
the Administrative Trustees shall be hand delivered or otherwise delivered in
writing (including by facsimile or overnight courier) not less than 24 hours
before such meeting. Notices shall contain a brief statement of the time, place
and anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Administrative Trustee attends a meeting
for the express purpose of objecting to the transaction of any activity on the
ground that the
<PAGE> 45
39
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Administrative Trustees may be taken at a
meeting by vote of a majority of the Administrative Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous written
consent of the Administrative Trustees.
In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee. In the event a Special Trustee is holding office
pursuant to Section 5.06, such Special Trustee shall have the same rights as an
Administrative Trustee with respect to participation in a meeting of the
Administrative Trustees.
SECTION 5.10. Delegation of Power. (a) Any Administrative Trustee
may, by power of attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the purpose of executing
any documents contemplated in Section 3.06, including any registration statement
or amendment thereto filed with the Commission, or making any other governmental
filing; and
(b) the Administrative Trustees shall have power to delegate from
time to time to such of their number or to officers of the Trust the doing of
such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 5.11. Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Property Trustee or the Delaware Trustee, as
the case may be, may be merged or converted or with which either may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Property Trustee or the Delaware Trustee, as the case
may be, shall be a party, or any Person succeeding to all or substantially all
the corporate trust business of the Property Trustee or the Delaware Trustee, as
the case may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such Person shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provides
further, however that the Delaware Trustee shall file amendments to the
Certificate of Trust as may be required by the Business Trust Act.
<PAGE> 46
40
ARTICLE VI
Distributions
SECTION 6.01. Distributions. Holders shall receive Distributions (as
defined herein) in accordance with the applicable terms of the relevant Holder's
Securities. Distributions shall be made on the Preferred Securities and the
Common Securities in accordance with the preferences set forth in their
respective terms. If and to the extent that the Debenture Issuer makes a payment
of interest (including Compounded Interest (as defined in the Indenture) and
Additional Sums (as defined in the Indenture)) premium and principal on the
Debentures held by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a distribution (a "Distribution")
of the Payment Amount to Holders.
ARTICLE VII
Issuance of Securities
SECTION 7.01. General Provisions Regarding Securities. (a) The
Administrative Trustees shall on behalf of the Trust issue one class of
convertible preferred securities, designated as Convertible Preferred Trust
Securities, liquidation amount $27, representing undivided beneficial interests
in the assets of the Trust (the "Preferred Securities"), having such terms as
are set forth in Annex I and one class of convertible common securities,
liquidation amount $27, representing undivided beneficial interests in the
assets of the Trust (the "Common Securities"), having such terms as are set
forth in Annex I. The Trust shall have no securities or other interests in the
assets of the Trust other than the Preferred Securities and the Common
Securities. The Trust shall issue no Securities in bearer form.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable, subject to Section 10.01 with respect to the Common Securities.
<PAGE> 47
41
(d) Every Person, by virtue of having become a Holder or a Preferred
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of, and shall
be bound by, this Declaration.
SECTION 7.02. Execution and Authentication. (a) The Securities shall
be signed on behalf of the Trust by one Administrative Trustee. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the execution
and delivery of the Declaration any such person was not such a Administrative
Trustee.
(b) One Administrative Trustee shall sign the Preferred Securities
for the Trust by manual or facsimile signature. Unless otherwise determined by
the Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Preferred Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue by executing the Property Trustee's certificate of authentication
contained in the form of Preferred Securities attached hereto as Exhibit A-1.
The aggregate number of Preferred Securities outstanding at any time shall not
exceed the number set forth in the terms in Annex I hereto except as provided in
Section 7.06.
The Property Trustee may appoint an authenticating agent acceptable
to the Trust to authenticate Preferred Securities. An authenticating agent may
authenticate Preferred Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the same rights as the
Property Trustee to deal with the Company or an Affiliate.
<PAGE> 48
42
SECTION 7.03. Form and Dating. The Preferred Securities and the
Property Trustee's certificate of authentication shall be substantially in the
form of Exhibit A-1 and the Common Securities shall be substantially in the form
of Exhibit A-2, each of which is hereby incorporated in and expressly made a
part of this Declaration. Certificates representing the Securities may be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Administrative Trustees, as evidenced by their
execution thereof. The Securities may have letters, CUSIP or other numbers,
notations or other marks of identification or designation and such legends or
endorsements required by law, stock exchange rule, agreements to which the Trust
is subject, if any, or usage (provided that any such notation, legend or
endorsement is in a form acceptable to the Trust). The Trust at the direction of
the Sponsor shall furnish any such legend to the Property Trustee in writing.
Each Preferred Security shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Property Trustee and the Sponsor,
by their execution and delivery of this Declaration, expressly agree to such
terms and provisions and to be bound thereby.
(a) The Preferred Securities shall initially be issued in the form
of one or more permanent global Securities in definitive, fully registered form
without distribution coupons as set forth in Exhibit A-1 hereto (a "Global
Preferred Security"), which shall be deposited on behalf of the Holders of the
Preferred Securities represented thereby with the Property Trustee, as custodian
for the Clearing Agency, and registered in the name of the Clearing Agency or a
nominee of the Clearing Agency, duly executed by the Trust and authenticated by
the Property Trustee as hereinafter provided. The number of Preferred Securities
represented by a Global Preferred Security may from time to time be increased or
decreased by adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided.
(b) This Section 7.03(b) shall apply only to the Global Preferred
Securities and such other Preferred Securities in global form as may be
authorized by the Trust to be deposited with or on behalf of the Clearing
Agency.
The Trust shall execute and the Property Trustee shall, in
accordance with this Section 7.03, authenticate and make available for delivery
initially one or more Global Preferred Securities that (i) shall be registered
in the name
<PAGE> 49
43
of Cede & Co. or other nominee of such Clearing Agency and (ii) shall be
delivered by the Property Trustee to such Clearing Agency or pursuant to such
Clearing Agency's written instructions or held by the Property Trustee as
custodian for the Clearing Agency. Members of, or participants in, the Clearing
Agency ("Participants") shall have no rights under this Declaration with respect
to any Global Preferred Security held on their behalf by the Clearing Agency or
by the Property Trustee as the custodian of the Clearing Agency or under such
Global Preferred Security, and the Clearing Agency may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property Trustee as the
absolute owner of such Global Preferred Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Trust, the
Property Trustee or any agent of the Trust or the Property Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and its
Participants, the operation of customary practices of such Clearing Agency
governing the exercise of the rights of a holder of a beneficial interest in any
Global Preferred Security.
(c) Except as provided in Section 7.10, 9.01 and Section 9.02,
owners of beneficial interests in a Global Preferred Security will not be
entitled to receive physical delivery of certificated Preferred Securities
("Definitive Preferred Securities").
(d) The Preferred Securities are issuable only in denominations of
$1,000.00 and any integral multiple thereof.
SECTION 7.04. Registrar, Paying Agent and Conversion Agent. The
Trust shall maintain in Cincinnati, Ohio (i) an office or agency where Preferred
Securities may be presented for registration of transfer or for exchange
("Registrar"), (ii) an office or agency where Preferred Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Preferred Securities and of their transfer and
exchange. The Trust may appoint the Registrar, the Paying Agent and the
Conversion Agent and may appoint one or more co-registrars, one or more
additional paying agents and one or more additional conversion agents in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent and the term "Conversion Agent" includes any additional
conversion agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Conversion Agent without prior notice to any Holder. The Trust shall notify
the Property Trustee of the name and address of any
<PAGE> 50
44
Agent not a party to this Declaration. If the Trust fails to appoint or maintain
another entity as Registrar, Paying Agent or Conversion Agent, the Property
Trustee shall act as such. The Trust or any of its Affiliates may act as Paying
Agent, Registrar, or Conversion Agent. The Trust shall act as Paying Agent,
Registrar, co-registrar, and Conversion Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Conversion Agent for the Preferred
Securities.
SECTION 7.05. Paying Agent to Hold Money in Trust. The Trust shall
require each Paying Agent other than the Property Trustee to agree in writing
that the Paying Agent will hold in trust for the benefit of Holders or the
Property Trustee all money held by the Paying Agent for the payment of principal
or distribution on the Securities, and will notify the Property Trustee if there
are insufficient funds.
SECTION 7.06. Outstanding Preferred Securities. The Preferred
Securities outstanding at any time are all the Preferred Securities
authenticated by the Property Trustee except for those canceled by it, those
delivered to it for cancelation, and those described in this Section as not
outstanding.
If a Preferred Security is replaced, paid or purchased pursuant to
Section 7.06 hereof, it ceases to be outstanding unless the Property Trustee
receives proof satisfactory to it that the replaced, paid or purchased Preferred
Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with the
terms of this Declaration, they cease to be outstanding and interest on them
ceases to accrue.
A Preferred Security does not cease to be outstanding because one of
the Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
SECTION 7.07. Preferred Securities in Treasury. In determining
whether the Holders of the required amount of Securities have concurred in any
direction, waiver or consent, Preferred Securities owned by the Trust, the
Sponsor or an Affiliate of the Sponsor, as the case may be, shall be disregarded
and deemed not to be outstanding, except that for the purposes of determining
whether the Property Trustee shall be fully protected in relying on any such
direction, waiver or consent, only Securities which the Property Trustee knows
are so owned shall be so disregarded.
<PAGE> 51
45
SECTION 7.08. Temporary Securities. Until definitive Securities are
ready for delivery, the Trust may prepare and, in the case of the Preferred
Securities, the Property Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive Securities
but may have variations that the Trust considers appropriate for temporary
Securities. Without unreasonable delay, the Trust shall prepare and deliver to
the Property Trustee Preferred Securities in certificated form (other than in
the case of Preferred Securities in global form) and thereupon any or all
temporary Preferred Securities (other than any such Preferred Securities in
global form) may be surrendered in exchange therefor, at the office of the
Registrar, and the Property Trustee shall authenticate and deliver an equal
aggregate liquidation amount of definitive Preferred Securities in certificated
form in exchange for temporary Preferred Securities (other than any such
Preferred Securities in global form).
SECTION 7.09. Cancelation. The Trust at any time may deliver
Preferred Securities to the Property Trustee for cancelation. The Registrar,
Paying Agent and Conversion Agent shall forward to the Property Trustee any
Preferred Securities surrendered to them for registration of transfer,
redemption, conversion, exchange or payment. The Property Trustee shall promptly
cancel all Preferred Securities, surrendered for registration of transfer,
redemption, conversion, exchange, payment, replacement or cancelation and shall
return such canceled Preferred Securities to the Administrative Trustees. The
Trust may not issue new Preferred Securities to replace Preferred Securities
that it has paid or that have been delivered to the Property Trustee for
cancelation or that any holder has converted.
SECTION 7.10. Definitive Securities. (a) A Global Preferred Security
deposited with the Clearing Agency or with the Property Trustee as custodian for
the Clearing Agency pursuant to Section 7.03 shall be transferred to the
beneficial owners thereof in the form of Definitive Preferred Securities only if
such transfer complies with Section 9.01 or with Section 9.02 or (i) the
Clearing Agency notifies the Sponsor that it is unwilling or unable to continue
as Clearing Agency for such Global Preferred Security or if at any time such
Clearing Agency ceases to be a "clearing agency" registered under the Exchange
Act and a clearing agency is not appointed by the Sponsor within 90 days of such
notice or of its becoming aware of such cessation, (ii) an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of Definitive Preferred Securities.
<PAGE> 52
46
(b) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred Securities
pursuant to this Section 7.10 shall be surrendered by the Clearing Agency to the
Property Trustee located in Cincinnati, Ohio, to be so transferred, in whole or
from time to time in part, without charge, and the Property Trustee shall
authenticate and make available for delivery, upon such transfer of each portion
of such Global Preferred Security, an equal aggregate liquidation amount of
Preferred Securities of authorized denominations in the form of certificated
Preferred Securities. Any portion of a Global Preferred Security so transferred
pursuant to this Section 7.10(b) shall be registered in such names as the
Clearing Agency shall direct.
(c) Subject to the provisions of Section 7.09(b), the Holder of a
Global Preferred Security may grant proxies and otherwise authorize any Person,
including Participants and persons that may hold interests through Participants,
to take any action which such Holder is entitled to take under this Declaration
or the Securities.
(d) In the event of the occurrence of any of the events specified in
Section 7.10(a), the Trust will promptly make available to the Property Trustee
a reasonable supply of certificated Preferred Securities in fully registered
form without distribution coupons.
(e) Payments on the Preferred Securities that are not held by the
Depositary will be made by check mailed to the address of the Holder entitled
thereto at the address which appears on the register.
ARTICLE VIII
Termination of Trust
SECTION 8.01. Termination of Trust. (a) The Trust shall
terminate upon the earliest to occur of the following:
(i) the bankruptcy of the Holder of the Common Securities
or the Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the Sponsor; the
filing of a certificate of cancelation with respect to the Trust or the
revocation of the charter of the Holder of the Common Securities or the
Sponsor and the expiration of 90 days after the date of revocation without
a reinstatement thereof;
<PAGE> 53
47
(iii) the distribution of a Like Amount of Debentures to Holders of the
Securities in accordance with the terms of the Securities;
(iv) all the Securities shall have been called for redemption and
the amounts necessary for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Securities;
(v) the expiration of the term of the Trust on - , 20[ ];
(vi) the entry of a decree of judicial dissolution of the Holder of
the Common Securities, the Sponsor or the Trust;
(vii) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(viii) upon the distribution of the Common Stock (as defined in the
Indenture) of the Sponsor to Holders of all outstanding Securities upon
conversion of all such Securities; or
(ix) before the issuance of any Securities, with the consent of all
the Administrative Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.01(a), the Trustees shall file a certificate of
cancelation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.09 and Article X shall survive the
termination of the Trust.
ARTICLE IX
Transfer and Exchange
SECTION 9.01. General. (a) Where Preferred Securities are presented
to the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Preferred Securities represented by
different certificates, the Registrar shall register the transfer or make the
exchange if its requirements for such transactions are met. To permit
registrations of transfers and exchanges, the Trust shall issue and the Property
Trustee
<PAGE> 54
48
shall authenticate Preferred Securities at the Registrar's request.
(b) Securities may only be transferred, in whole or in part, in
accordance with the terms and conditions set forth in this Declaration and in
the terms of the Securities. Any transfer or purported transfer of any Security
not made in accordance with this Declaration shall be null and void.
Subject to this Article IX, the Sponsor and any Related Party may
only transfer Common Securities to the Sponsor or a Related Party of the
Sponsor; provided that, any such transfer is subject to the condition precedent
that the transferor obtain the written opinion of nationally recognized
independent counsel experienced in such matters that such transfer would not
cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States federal
income tax purposes as a grantor trust; and
(ii) the Trust would be an Investment Company or the transferee
would become an Investment Company.
(c) At the option of the Holder, Preferred Securities may be
exchanged for other Preferred Securities of the same class, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Preferred Securities to be exchanged at such office or agency. Whenever any
Preferred Securities are so surrendered for exchange, the Trust shall execute,
and the Property Trustee shall authenticate and deliver, the Preferred
Securities which the Holder making the exchange is entitled to receive.
(d) All Preferred Securities issued upon any registration of
transfer or exchange of Preferred Securities shall be the valid obligations of
the Trust, evidencing the same debt, and entitled to the same benefits under
this Declaration, as the Preferred Securities surrendered upon such registration
of transfer or exchange.
(e) The Administrative Trustees shall provide for the registration
of Securities and of transfers of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
may require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees. Every
Security surrendered for registration of transfer shall
<PAGE> 55
49
be accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be canceled in accordance with Section 7.09. A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Declaration.
(f) The Trust shall not be required (i) to issue, register the
transfer of, or exchange, Preferred Securities during a period beginning at the
opening of business 15 days before the day of any selection of Preferred
Securities for redemption set forth in the terms of the Securities as set forth
in Annex I hereto and ending at the close of business on the day of selection,
or (ii) to register the transfer or exchange of any Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Preferred Security being redeemed in part.
(g) All Preferred Securities issued upon any transfer or exchange
pursuant to the terms of this Declaration shall evidence the same security and
shall be entitled to the same benefits under this Declaration as the Preferred
Securities surrendered upon such transfer or exchange.
SECTION 9.02. Transfer Procedures and Restrictions. (a) The transfer
and exchange of Global Preferred Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with this
Declaration (including applicable restrictions on transfer set forth herein, if
any) and the procedures of the Clearing Agency therefor.
(b) Notwithstanding any other provisions of this Declaration (other
than the provisions set forth in this Section 9.02, Section 7.10 and Section
9.01, a Global Preferred Security may not be transferred as a whole except by
the Clearing Agency to a nominee of the Clearing Agency or another nominee of
the Clearing Agency or by the Clearing Agency or any such nominee to a successor
Clearing Agency or a nominee of such successor Clearing Agency.
(c) At such time as all beneficial interests in a Global Preferred
Security have been exchanged for Definitive Preferred Securities to the extent
permitted by this Declaration or canceled in accordance with the terms of this
Declaration, such Global Preferred Security shall be canceled by the Property
Trustee. At any time prior to such
<PAGE> 56
50
cancelation, if any beneficial interest in a Global Preferred Security is
exchanged for Definitive Preferred Securities, Preferred Securities represented
by such Global Preferred Security shall be reduced and an adjustment shall be
made on the books and records of the Clearing Agency and the Registrar, to
reflect such reduction.
(d) The Property Trustee shall have no responsibility or obligation
to any beneficial owner of a Preferred Security, a Participant in the Depositary
or other Person with respect to the accuracy of the records of the Depositary or
its nominee or of any Participant thereof, with respect to any ownership
interest in the Preferred Securities or with respect to the delivery to any
Participant, beneficial owner or other Person (other than the Depositary) of any
notice (including any notice of redemption) or the payment of any amount, under
or with respect to such Preferred Securities. All notices and communications to
be given to the Holders and all payments to be made to Holders under the
Preferred Securities shall be given or made only to or upon the order of the
registered Holders (which shall be the Depositary or its nominee in the case of
a Global Preferred Security). The rights of beneficial owners in any Global
Preferred Security shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Depositary or agent thereof with respect to its Participants
and any beneficial owners.
SECTION 9.03. Deemed Security Holders. The Trustees may treat the
Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Property Trustee, the Registrar or a
co-registrar shall have actual or other notice thereof.
SECTION 9.04. Notices to Clearing Agency. Whenever a notice or other
communication to the Preferred Security Holders is required under this
Declaration, the Administrative Trustees shall, in the case of any Global
Preferred Security, give all such notices and communications specified herein to
be given to the Preferred Security Holders to the Depositary, and shall have no
notice obligations to the Preferred Security Beneficial Owners.
<PAGE> 57
51
SECTION 9.05. Appointment of Successor Clearing Agency. If the
Depository elects to discontinue its services as securities depositary with
respect to the Preferred Securities, the Administrative Trustees may, in their
sole discretion, appoint a successor Clearing Agency with respect to such
Preferred Securities.
ARTICLE X
Limitation of Liability of
Holders of Securities, Trustees or Others
SECTION 10.01. Liability. (a) Except as expressly set
forth in this Declaration, the Securities Guarantees and the terms of
the Securities the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders of the Securities
which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of Securities any
deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Preferred Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
SECTION 10.02. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Trust or any
Covered Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on behalf
of the Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for any
such loss, damage or claim incurred by reason of such Indemnified Person's gross
negligence (or, in the case of the Property Trustee, negligence) or willful
misconduct with respect to such acts or omissions.
<PAGE> 58
52
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
SECTION 10.03. Fiduciary Duty. (a) To the extent that, at law or in
equity, an Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered Person, an
Indemnified Person acting under this Declaration shall not be liable to the
Trust or to any other Covered Person for its good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of an Indemnified Person
otherwise existing at law or in equity (other than the duties imposed on the
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between an
Indemnified Person and any Covered Person; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such action
or provide such terms, considering in each case the relative interest of each
party (including its own interest) to such conflict, agreement, transaction or
situation and the benefits and burdens relating to such interests, any customary
or accepted industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified Person,
the resolution, action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Declaration or any other agreement
contemplated herein or of any duty or obligation of the Indemnified Person at
law or in equity or otherwise.
<PAGE> 59
53
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or
by applicable law.
SECTION 10.04. Indemnification. (a) To the fullest extent permitted
by applicable law, the Debenture Issuer shall indemnify and hold harmless each
Indemnified Person from and against any loss, damage, liability, tax, penalty,
expense or claim of any kind or nature whatsoever incurred by such Indemnified
Person by reason of the creation, operation or termination of the Trust or any
act or omission performed or omitted by such Indemnified Person in good faith on
behalf of the Trust and in a manner such Indemnified Person reasonably believed
to be within the scope of authority conferred on such Indemnified Person by this
Declaration, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of gross negligence (or, in the case of the Property Trustee,
negligence) or willful misconduct with respect to such acts or omissions.
(b) To the fullest extent permitted by applicable law, expenses
(including legal fees and expenses) incurred by an Indemnified Person in
defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Debenture Issuer prior to the final disposition of such
claim, demand, action, suit or proceeding upon receipt by the Debenture Issuer
of an undertaking by or on behalf of the Indemnified Person to repay such amount
if it shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 10.4(a). The indemnification shall survive
the termination of this Declaration.
SECTION 10.05. Outside Businesses. Any Covered Person, the Sponsor,
the Delaware Trustee and the Property Trustee may engage in or possess an
interest in other business ventures of any nature or description, independently
or with others, similar or dissimilar to the business of the Trust, and the
Trust and the Holders of Securities shall have no rights by virtue of this
Declaration in and to such independent ventures or the income or profits derived
therefrom and the pursuit of any such venture, even if competitive with the
business of the Trust,
<PAGE> 60
54
and the trust and the Holders of Securities shall have no rights by virtue of
this Declaration in and to such independent ventures or the income or profits
derived therefrom and the pursuit of any such venture, even if competitive with
the business of the Trust, shall not be deemed wrongful or improper. None of the
Sponsor, any Covered Person, the Delaware Trustee, or the Property Trustee shall
be obligated to present any particular investment or other opportunity to the
Trust even if such opportunity is of a character that, if presented to the
Trust, could be taken by the Trust, and any Covered Person, the Sponsor, the
Delaware Trustee and the Property Trustee shall have the right to take for its
own account (individually or as a partner or fiduciary) or to recommend to
others any such particular investment or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
Accounting
SECTION 11.01. Fiscal Year. The fiscal year ("Fiscal
Year") of the Trust shall be the calendar year, or such other year as
is required by the Code.
SECTION 11.02. Certain Accounting Matters. (a) At all times during
the existence of the Trust, the Administrative Trustees shall keep, or cause to
be kept, full books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the Trust. The books of
account shall be maintained on the accrual method of accounting, in accordance
with generally accepted accounting principles, consistently applied. The Trust
shall use the accrual method of accounting for United States federal income tax
purposes. The books of account and the records of the Trust shall be examined by
and reported upon as of the end of each Fiscal Year by a firm of independent
certified public accountants selected by the Administrative Trustees.
(b) The Administrative Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance
<PAGE> 61
55
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss;
(c) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(d) The Administrative Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United States
federal income tax law, and any other annual income tax returns required to be
filed by the Administrative Trustees on behalf of the Trust with any state or
local taxing authority.
SECTION 11.03. Banking. The Trust shall maintain one or more bank
accounts in the name and for the sole benefit of the Trust; provided, however,
that all payments of funds in respect of the Debentures held by the Property
Trustee shall be made directly to the Property Trustee Account and no other
funds of the Trust shall be deposited in the Property Trustee Account. The sole
signatories for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall designate the
signatories for the Property Trustee Account.
SECTION 11.04. Withholding. The Trust and the Administrative
Trustees shall comply with all withholding requirements under United States
federal, state and local law. The Trust shall request, and the Holders shall
provide to the Trust, such forms or certificates as are necessary to establish
an exemption from withholding with respect to each Holder, and any
representations and forms as shall reasonably be requested by the Trust to
assist it in determining the extent of, and in fulfilling, its withholding
obligations. The Administrative Trustee shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Trust is required to
withhold and pay over any amounts to any authority with respect to distributions
or allocations to any Holder, the amount withheld shall be deemed to be a
distribution in the amount of the withholding to the Holder. In the event of any
<PAGE> 62
56
claimed overwithholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld was not withheld
from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XII
Amendments and Meetings
SECTION 12.01. Amendments. (a) This Declaration may be amended from
time to time by the Sponsor, the Property Trustee and the Administrative
Trustees, without the consent of the Holders of the Securities, (i) to cure any
ambiguity, correct or supplement any provision in the Declaration that may be
inconsistent with any other provision, or to make any other provisions with
respect to ministerial matters or questions arising under the Declaration, which
shall not be inconsistent with the other provisions of the Declaration, or (ii)
to modify, eliminate or add to any provisions of the Declaration to such extent
as shall be necessary to ensure that the Trust will not be taxable as a
corporation or will be classified for United States federal income tax purposes
as a grantor trust at all times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an "investment company" under
the Investment Company Act; provided, however, that in the case of clause (i),
such action shall not adversely affect in any material respect the interests of
any Holder of Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the Holders of the Securities.
(b) Except as provided in (c) below, this Declaration may be amended
by the Trustees and the Company with (i) the consent of Holders representing not
less than a Majority in liquidation amount of the outstanding Preferred
Securities, and (ii) receipt by the Trustees of an opinion of counsel to the
effect that such amendment or the exercise of any power granted to the Trustees
in accordance with such amendment will not affect the Trust's status as a
grantor trust for United States federal income tax purposes or the Trust's
exemption from status as an "investment company" under the Investment Company
Act.
(c) Without the consent of each holder of Securities, the
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities of a specified
date or (ii) restrict the right of a Holder of
<PAGE> 63
57
Securities to institute suit for the enforcement of any such payment on or after
such date.
SECTION 12.02. Meetings of the Holders of Securities; Action by
Written Consent. (a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Administrative
Trustees shall call a meeting of the Holders of such class if directed to do so
by the Holders of at least 25% in liquidation amount of such class of
Securities. Such direction shall be given by delivering to the Administrative
Trustees one or more requests in a writing stating that the signing Holders of
Securities wish to call a meeting and indicating the general or specific purpose
for which the meeting is to be called. Any Holders of Securities calling a
meeting shall specify in writing the Certificates held by the Holders of
Securities exercising the right to call a meeting and only those Securities
represented by the Certificates so specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders of
Securities having a right to vote thereat at least 7 days and not more
than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of Securities. Any
action that may be taken at a meeting of the Holders of Securities may be
taken without a meeting if a consent in writing setting forth the action
so taken is signed by the Holders of Securities owning not less than the
minimum aggregate liquidation amount of Securities that would be necessary
to authorize or take such action at a meeting at which all Holders of
Securities having a right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in writing.
The Administrative Trustees may
<PAGE> 64
58
specify that any written ballot submitted to the Holders for the purpose
of taking any action without a meeting shall be returned to the Trust
within the time specified by the Administrative Trustees;
(ii) each Holder of a Security may authorize any Person to act for
it by proxy on all matters in which a Holder of Securities is entitled to
participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration
of 11 months from the date thereof unless otherwise provided in the proxy.
Every proxy shall be revocable at the pleasure of the Holder of Securities
executing it. Except as otherwise provided herein, all matters relating to
the giving, voting or validity of proxies shall be governed by the General
Corporation Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a Delaware corporation
and the Holders of the Securities were stockholders of a Delaware
corporation;
(iii) each meeting of the Holders of the Securities shall be
conducted by the Administrative Trustees or by such other Person that the
Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Declaration, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Preferred Securities are then listed or trading,
provide otherwise, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose of any meeting
at which any matter is to be voted on by any Holders of Securities, waiver
of any such notice, action by consent without a meeting, the establishment
of a record date, quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right to vote.
ARTICLE XIII
Representations of Property Trustee and Delaware Trustee
SECTION 13.01. Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, at the Closing Date,
<PAGE> 65
59
if any, and each Successor Property Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Property Trustee's acceptance of
its appointment as Property Trustee that:
(a) The Property Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, with corporate power and authority to execute
and deliver, and to carry out and perform its obligations under the terms of,
the Declaration.
(b) The execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by
the Property Trustee does not conflict with or constitute a breach of the
certificate of incorporation or by-laws of the Property Trustee.
(d) No consent, approval or authorization of, or registration with
or notice to, any New York or Federal banking authority is required for the
execution, delivery or performance by the Property Trustee, of the Declaration.
SECTION 13.02. Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, at the Closing Date,
if any, and each Successor Delaware Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Property Trustee's acceptance of
its appointment as Delaware Trustee that:
(a) The Delaware Trustee is a banking corporation with trust powers,
duly organized, validly existing and in good standing under the laws of the
United States with its principal place of business in the State of Delaware,
with corporate power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
<PAGE> 66
60
(b) The execution, delivery and performance by the Delaware Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. The Declaration has been duly executed and
delivered by the Delaware Trustee, and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) The execution, delivery and performance of the Declaration by
the Delaware Trustee does not conflict with or constitute a breach of the
articles of association or by-laws of the Delaware Trustee.
(d) No consent, approval or authorization of, or registration with
or notice to, any Delaware or Federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration,
other than the filing of the Certificate of Trust.
(e) The Delaware Trustee is an entity which has its principal place
of business in the State of Delaware.
(f) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration.
ARTICLE XIV
Miscellaneous
SECTION 14.01. Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees at
the Trust's mailing address set forth below (or such other address as the Trust
may give notice of to the Holders of the Securities):
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Attention: Chief Financial Officer
<PAGE> 67
61
(b) if given to the Property Trustee, at the mailing address
set forth below (or such other address as the Property Trustee may give notice
of to the Holders of the Securities):
Firstar Bank, National Association
Corporate Trust Services
Sixth Floor (for overnight or hand delivery)
Mail Location CN-WNO6CT
425 Walnut Street
Cincinnati, Ohio 45202
Attention: Keith A. Maurmeier
(c) if given to the Delaware Trustee, at the mailing address
set forth below (or such other address as the Delaware Trustee may give notice
of to the Holders of the Securities):
First Union Trust Company, National Association
One Rodney Square
920 King Street, 1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
(d) if given to the Holder of the Common Securities, at the
mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice to the Trust):
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Attention: Chief Financial Officer
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust or the Registrar, as applicable.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.02. Governing Law. This Declaration and the rights
of the parties hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies shall be governed
by such laws without regard to principles of conflict of laws. The
<PAGE> 68
62
parties hereto hereby irrevocably and unconditionally consent to submit to the
exclusive jurisdiction of the courts of the State of Delaware and of the United
States District Courts located in Delaware for any lawsuits, claims or other
proceedings arising out of or relating to this Agreement and agree not to
commence any such lawsuit, claim or other proceeding except in such courts. The
parties hereto hereby irrevocably and unconditionally waive any object to the
laying of venue of any lawsuit, claim, or other proceeding arising out of or
relating to this Agreement in the courts of the State of Delaware or the United
States District Courts Located in the City of Wilmington, and hereby further
irrevocably and unconditionally waive and agree not to plead or claim in any
such court that any such lawsuit, claim or other proceeding brought in any such
court has been brought in an inconvenient forum. Sections 3540 and 3561 of Title
12 of the Delaware Code shall not apply to the Trust.
SECTION 14.03. Intention of the Parties. It is the intention
of the parties hereto that the Trust be classified for United States federal
income tax purposes as a grantor trust. The provisions of this Declaration shall
be interpreted to further this intention of the parties.
SECTION 14.04. Headings. Headings contained in this
Declaration are inserted for convenience of reference only and do not affect the
interpretation of this Declaration or any provision hereof.
SECTION 14.05. Successors and Assigns. Whenever in this
Declaration any of the parties hereto is named or referred to, the successors
and assigns of such party shall be deemed to be included, and all covenants and
agreements in this Declaration by the Sponsor and the Trustees shall bind and
inure to the benefit of their respective successors and assigns, whether so
expressed.
SECTION 14.06. Partial Enforceability. If any provision of
this Declaration, or the application of such provision to any Person or
circumstance, shall be held invalid, the remainder of this Declaration, or the
application of such provision to persons or circumstances other than those to
which it is held invalid, shall not be affected thereby.
SECTION 14.07. Counterparts. This Declaration may contain more
than one counterpart of the signature page and this Declaration may be executed
by the affixing of the signature of each of the Trustees to one of such
counterpart
<PAGE> 69
63
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
<PAGE> 70
64
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
KEVIN J. MCNAMARA, as Trustee
by________________________
Name:
Title:
TIMOTHY S. O'TOOLE, as Trustee
by________________________
Name:
Title:
SANDRA LANEY, as Trustee
by________________________
Name:
Title:
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Delaware Trustee
by________________________
Name:
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION, as
Property Trustee
by________________________
Name:
Title:
CHEMED CORPORATION, as Sponsor
by________________________
Name:
Title:
<PAGE> 71
Annex I
TERMS OF
CONVERTIBLE PREFERRED TRUST SECURITIES
CONVERTIBLE COMMON SECURITIES
Pursuant to Section 7.01 of the Amended and Restated
Declaration of Trust, dated as of January -, 2000 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or the Indenture (as
defined in the Declaration) or, if not defined in the Declaration or Indenture,
as defined in the Offering Circular (as defined in the Declaration):
1. Designation and Number.
(a) "Preferred Securities." up to 2,000,000 Preferred Securities
of the Trust with an aggregate liquidation preference with
respect to the assets of the Trust of up to Fifty-four million
Dollars ($54,000,000), and a liquidation amount with respect
to the assets of the Trust of $27 per Preferred Security, are
hereby designated for the purposes of identification only as
"Convertible Preferred Trust Securities" (the "Preferred
Securities"). The Preferred Security Certificates evidencing
the Preferred Securities shall be substantially in the form
attached hereto as Exhibit A-1, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules
of any stock exchange or other organization on which the
Preferred Securities are listed.
(b) "Common Securities." up to 61,856 Common Securities of the
Trust with an aggregate liquidation amount with respect to the
assets of the Trust of up to one million six hundred seventy
thousand one hundred twelve Dollars ($1,670,112) and a
liquidation amount with respect to the assets of the Trust of
$27 per Common Security, are hereby designated for the
purposes of identification only as "Convertible Common
Securities" (the "Common Securities"). The Common Security
Certificates evidencing the Common Securities shall be
substantially in the form attached hereto as Exhibit A-2, with
such changes
<PAGE> 72
2
and additions thereto or deletions therefrom as may be
required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate
per annum of $2.00 for each Preferred Security (the "Coupon
Rate"), such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions
in arrears for more than one quarter will bear interest
thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used
herein includes such quarterly distributions, additional
distributions on quarterly distributions not paid on the
applicable Distribution Date, Special Distributions and
Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the
Debentures held by the Property Trustee and to the extent the
Property Trustee has funds available therefor. Except for the
interest payable on March 15, 2000, the amount of
Distributions payable for any period will be computed for any
full quarterly Distribution period on the basis of a 360-day
year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions
are computed, Distributions will be computed on the basis of
the actual number of days elapsed per 30-day month.
(b) Distributions on the Securities will be cumulative, will
accrue from the date of their original issuance and will be
payable quarterly in arrears, on the following dates, which
dates correspond to the interest payment dates on the
Debentures: March 15, June 15, September 15 and December 15 of
each year, commencing on March 15, 2000, except as otherwise
described below. The Sponsor has the right under the Indenture
to defer payments of interest after March 15, 2000,by
extending the interest payment period from time to time on
the Debentures for a period not exceeding 20 consecutive
quarters (each a "Deferral Period") and, as a consequence of
such deferral, Distributions will also be deferred after March
15, 2000. Despite such deferral, quarterly Distributions will
continue to accrue with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Deferral Period. Prior to three
Business Days before a Regular Record Date fixed for a Payment
<PAGE> 73
3
Resumption Date (as defined in the Indenture), the Sponsor may
further extend such Deferral Period; provided that such
Deferral Period together with all such previous and further
extensions thereof may not exceed 20 consecutive quarters or
extend beyond the maturity (whether at the stated maturity or
by declaration of acceleration, call for redemption or
otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the Regular
Record Date for the relevant Payment Resumption Date. Upon the
termination of any Deferral Period and the payment of all
amounts then due, the Sponsor may commence a new Deferral
Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust
at the close of business on the relevant record dates. The
relevant record dates shall be on the first day of the month
of the relevant payment dates, except as otherwise described
in this Annex I to the Declaration. Subject to any applicable
laws and regulations and the provisions of the Declaration,
each such payment in respect of Preferred Securities being
held in book-entry form through The Depository Trust Company
(the "Depositary") will be made as described under the heading
"Description of the Preferred Securities -- Form, Book-Entry
Procedures and Transfer" in the Offering Circular. The
relevant record dates for the Common Securities shall be the
same record dates as for the Preferred Securities.
Distributions payable on any Securities that are not
punctually paid on any Distribution payment date, as a result
of the Sponsor having failed to make a payment under the
Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable
to the Person in whose name such Securities are registered on
the special record date or other specified date determined in
accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business
Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any
such delay) except that, with respect to any Redemption Date,
if such Business Day is in the next succeeding calendar year,
such Redemption Date shall be the
<PAGE> 74
4
immediately preceding Business Day, in each case with the same
force and effect as if made on such date.
(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Capital Stock
pursuant to the terms of the Securities as forth in this Annex
I to the Declaration, no payment, allowance or adjustment
shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made;
provided that Holders of Securities at the close of business
on any record date for the payment of Distributions will be
entitled to receive the Distributions payable on such
Securities on the corresponding payment date notwithstanding
the conversion of such Securities into Capital Stock following
such record date.
(e) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein)
among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution.
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Trust shall be liquidated by the
Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to the Holders of the Securities a Like Amount of
Debentures, unless such distribution would not be practical, in which event such
Holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to, in the case of holders
of Preferred Securities, the aggregate liquidation amount thereof plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution can be paid only
in part because the Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Preferred Securities shall be paid on a Pro Rata (as defined below)
basis in accordance with paragraph 9. The Holder of the Common Securities will
be entitled to receive distributions upon any such liquidation Pro Rata with the
holders of the Preferred Securities, except as provided in paragraph 10.
<PAGE> 75
5
4. Redemption and Distribution.
(a) Upon the repayment or payment of the Debentures in whole or in
part, whether at maturity or upon redemption or otherwise
(other than following any distribution of the Debentures to
the Holders), the proceeds from such repayment or redemption
shall be simultaneously applied to redeem, on a Pro Rata
basis, a Like Amount of Securities, on the redemption date, in
an amount per Security equal to the applicable redemption
price, which redemption price will be equal to (i) the
liquidation amount of each of the Securities plus any accrued
and unpaid Distributions thereon (A) in the case of the
repayment of the Debentures at stated maturity, or (B) in the
case of a redemption of the Debentures in certain limited
circumstances set forth in the Indenture upon the occurrence
of a Tax Event or (ii) in the case of an Optional Redemption
on or after March 15, 2030, the Optional Redemption Price (as
defined in the Indenture), payable in cash (as applicable, the
"Redemption Price"). Holders will be given not less than 30
(or, in the case of a redemption pursuant to subparagraph (d)
below, 20) nor more than 60 days' notice of such redemption.
Upon the repayment of the Debentures at maturity or upon any
acceleration, earlier redemption or otherwise, the proceeds
from such repayment will be applied to redeem the Securities,
in whole, upon not less than 30 nor more than 60 days' notice.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Preferred Securities
will be redeemed Pro Rata and the Preferred Securities to be
redeemed will be as described in Paragraph 4(f)(ii) below.
(c) The Sponsor, as the Holder of the outstanding Common
Securities, shall have the right at any time (including,
without limitation, upon the occurrence of a Tax Event or
Investment Company Act Event) to terminate the Trust and,
after satisfaction of the creditors of the Trust, cause a Like
Amount of the Debentures to be distributed to the holders of
the Securities upon liquidation of the Trust, provided that
the Administrative Trustees shall have received a No
Recognition Opinion (as defined below) prior to the
liquidation of the Trust; and provided further that, following
such distribution of the Debentures, the Sponsor shall use its
best efforts to maintain a rating of such Debentures by any
nationally
<PAGE> 76
6
recognized rating agency for so long as any such Debentures
are outstanding.
(d) If, at any time, a Tax Event shall occur and be continuing the
Sponsor shall cause the Administrative Trustees to liquidate
the Trust and, after satisfaction of creditors of the Trust,
cause Debentures to be distributed to the Holders of the
Securities in liquidation of the Trust within 90 days
following the occurrence of such Tax Event (the "90 Day
Period"); provided, however, that such liquidation and
distribution shall be conditioned on (i) the Trustees'
receipt of an opinion of a nationally recognized independent
tax counsel (reasonably acceptable to the Trustees)
experienced in such matters (a "No Recognition Opinion"),
which opinion may rely on published revenue rulings of the
Internal Revenue Service, to the effect that the Holders of
the Securities will not recognize any income, gain or loss for
United States federal income tax purposes as a result of such
liquidation and distribution of Debentures, and (ii) the
Sponsor being unable to avoid such Tax Event within the 90 Day
Period by taking some ministerial action or pursuing some
other reasonable measure that, in the sole judgment of the
Sponsor, will have no adverse effect on the Trust, the Sponsor
or the Holders of the Securities and will involve no material
cost ("Ministerial Action").
If (i) the Sponsor has received an opinion
(a "Redemption Tax Opinion") of a nationally recognized
independent tax counsel (reasonably acceptable to the
Trustees) experienced in such matters that, as a result of a
Tax Event, there is more than an insubstantial risk that the
Sponsor would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes, even
after the Debentures were distributed to the Holders of
Securities upon liquidation of the Trust as described in this
paragraph 4(d), or (ii) the Trustees shall have been informed
by such tax counsel that it cannot deliver a No Recognition
Opinion, the Sponsor shall have the right, upon not less than
20 nor more than 60 days' notice, and within 90 days following
the occurrence of such Tax Event, to redeem the Debentures in
whole (but not in part) for cash, for the principal amount
plus accrued and unpaid interest thereon and, following such
redemption, all the Securities will be redeemed by the Trust
at the liquidation amount of $27 per Security
<PAGE> 77
7
plus accrued and unpaid Distributions thereon; provided,
however, that, if at the time there is available to the
Sponsor or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some Ministerial
Action, the Trust or the Sponsor will pursue such Ministerial
Action in lieu of redemption.
In lieu of the foregoing options, the
Sponsor shall also have the option of causing the Securities
to remain outstanding and pay Additional Sums on the
Debentures.
"Tax Event" means that the Property Trustee
shall have received an opinion of a nationally recognized
independent tax counsel to the Sponsor (reasonably acceptable
to the Trustees) experienced in such matters (a "Dissolution
Tax Opinion") to the effect that, as a result of (a) any
amendment to, or change (including any announced prospective
change (which shall not include a proposed change), provided
that a Tax Event shall not occur more than 90 days before the
effective date of any such prospective change) in the laws (or
any regulations thereunder) of the United States or any
political subdivision or taxing authority therefor or
therein, (ii) any judicial decision or official administrative
pronouncement, ruling, regulatory procedure, notice or
announcement, including any notice or announcement of intent
to adopt such procedures or regulations (an "Administrative
Action") or (iii) any amendment to or change in the
administrative position or interpretation of any
Administrative Action or judicial decision that differs from
the theretofore generally accepted position, in each case, by
any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or
change is made known, which amendment or change is effective
or such Administrative Action or decision is announced, in
each case, on or after the date of original issuance of the
Debentures or the issue date of the Preferred Securities
issued by the Trust, there is more than an insubstantial risk
that (a) if the Debentures are held by the Property Trustee,
(I) the Trust is, or will be within 90 days of the date of
such opinion, subject to United States federal income tax with
respect to interest accrued or received on the Debentures or
subject to more than a de minimis amount of other taxes,
duties or other governmental
<PAGE> 78
8
charges as determined by such counsel, or (II) any portion of
interest payable by the Sponsor to the Trust on the Debentures
is not, or within 90 days of the date of such opinion will not
be, deductible by the Sponsor in whole or in part for United
States federal income tax purposes or (b) with respect to
Debentures which are no longer held by the Property Trustee,
any portion of interest payable by the Sponsor on the
Debentures is not, or within 90 days of the date of such
opinion will not be, deductible by the Sponsor in whole or in
part for United States federal income tax purposes.
If an Investment Company Event (as
hereinafter defined) shall occur and be continuing, the
Sponsor shall cause the Trustees to liquidate the Trust and
cause the Debentures to be distributed to the Holders of the
Securities in liquidation of the Trust within 90 days
following the occurrence of such Investment Company Event.
"Investment Company Event" means the
occurrence of a change in law or regulation or a written
change in interpretation or application of law or regulation
by any legislative body, court, governmental agency or
regulatory authority (a "Change in 1940 Act Law"), to the
effect that the Trust is or will be considered an Investment
Company which is required to be registered under the
Investment Company Act, which Change in 1940 Act Law becomes
effective on or after the date of the Offering Circular.
After the date fixed for any distribution of
Debentures: (i) the Securities will no longer be deemed to be
outstanding, (ii) the Depositary or its nominee (or any
successor Depositary or its nominee), as record Holder of
Preferred Securities represented by global certificates, will
receive a registered global certificate or certificates
representing the Debentures to be delivered upon such
distribution and (iii) any certificates representing
Securities, except for certificates representing Preferred
Securities held by the Depositary or its nominee (or any
successor Depositary or its nominee), will be deemed to
represent Debentures having an aggregate principal amount
equal to the aggregate stated liquidation amount of such
Securities, with accrued and unpaid interest equal to accrued
and unpaid Distributions on such Securities until such
<PAGE> 79
9
certificates are presented to the Sponsor or its agent for
transfer or reissuance.
(e) The Securities will not be redeemed unless all accrued and
unpaid Distributions have been paid on all Securities for all
quarterly Distribution periods terminating on or before the
date of redemption.
(f) Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of
distribution of Debentures in exchange for the
Securities (a "Redemption/Distribution Notice") will
be given by the Trust by mail to each Holder of
Securities to be redeemed or exchanged not fewer
than 30 (or 20, in the case of redemption or
distribution upon the occurrence of a Tax Event) nor
more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption
of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on
which notices are given pursuant to this paragraph
4(f)(i), a Redemption/Distribution Notice shall be
deemed to be given on the day such notice is first
mailed by first-class mail, postage prepaid, to
Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of
Securities at the address of each such Holder
appearing in the books and records of the Trust. No
defect in the Redemption/Distribution Notice or in
the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other
Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be
redeemed shall be redeemed Pro Rata from each Holder
of Preferred Securities, it being understood that, in
respect of Preferred Securities registered in the
name of and held of record by the Depositary (or any
successor Depositary) or any nominee, the
distribution of the proceeds of such redemption will
be made to each Participant (or Person on whose
behalf such nominee holds such
<PAGE> 80
10
securities) in accordance with the procedures applied
by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives
a Redemption/Distribution Notice, which notice may
only be issued if the Debentures are redeemed as set
out in this paragraph 4 (which notice will be
irrevocable), then (A) with respect to Preferred
Securities held in book-entry form, by 12:00 noon,
New York City time, on the redemption date, to the
extent funds are available, with respect to Preferred
Securities held in global form, the Property Trustee
will deposit irrevocably with the Depositary (or
successor Depositary) funds sufficient to pay the
amount payable on redemption with respect to such
Preferred Securities and will give the Depositary
irrevocable instructions and authority to pay the
amount payable on redemption to the Holders of such
Preferred Securities, and (B) with respect to
Preferred Securities issued in certificated form and
Common Securities, to the extent funds are available,
the Property Trustee will irrevocably deposit with
the Paying Agent funds sufficient to pay the amount
payable on redemption to the Holders of such
Securities and will give the Paying Agent irrevocable
instructions and authority to pay the amount payable
on redemption to the Holders thereof upon surrender
of their certificates. If a Redemption/Distribution
Notice shall have been given and funds deposited as
required, then on the date of such deposit, all
rights of Holders of such Securities so called for
redemption will cease, except the right of the
Holders of such Securities to receive the redemption
price, but without interest on such redemption price,
and such Securities will cease to be outstanding.
Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be
registered the transfer of any Securities that have
been so called for redemption. If any date fixed for
redemption of Securities is not a Business Day, then
payment of the amount payable on such date will be
made on the next succeeding day that is a Business
Day (without any interest or other payment in respect
of any such delay) except that, if such Business Day
falls in the next calendar year, such payment will be
made on the
<PAGE> 81
11
immediately preceding Business Day, in each case with
the same force and effect as if made on such date
fixed for redemption. If payment of the redemption
price in respect of any Securities is improperly
withheld or refused and not paid either by the Trust
or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such
Securities will continue to accrue at the then
applicable rate, from the original redemption date to
the date of payment, in which case the actual payment
date will be considered the date fixed for redemption
for purposes of calculating the amount payable upon
redemption (other than for purposes of calculating
any premium).
(iv) Redemption/Distribution Notices shall be sent by the
Administrative Trustees on behalf of the Trust to (A)
in the case of Preferred Securities held in
book-entry form, the Depositary and, in the case of
Securities held in certificated form, the Holders of
such certificates and (B) in respect of the Common
Securities, the Holder thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal
securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time
purchase outstanding Preferred Securities by tender,
in the open market or by private agreement.
5. Conversion Rights.
The Holders of Securities shall have the right at any time, at their
option, to cause the Conversion Agent to convert Securities, on behalf
of the converting Holders, into shares of Capital Stock, par value
$1.00 per share, of the Sponsor (the "Capital Stock") in the manner
described herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of
Capital Stock pursuant to the Holder's direction to the
Conversion Agent to exchange such Securities for a portion of
the Debentures theretofore held by the Trust on the basis of
one Security per $27 principal amount of
<PAGE> 82
12
Debentures, and immediately convert such amount of Debentures
into fully paid and nonassessable shares of Capital Stock at
an initial rate of 0.73 shares of Capital Stock per $27
principal amount of Debentures (which is equivalent to a
conversion price of $37 per share of Capital Stock, subject to
certain adjustments set forth in the Indenture (as so
adjusted, "Conversion Price")).
(b) In order to convert Securities into Capital Stock the Holder
shall submit to the Conversion Agent at the office referred to
above an irrevocable request to convert Securities on behalf
of such Holder (the "Conversion Request"), together, if the
Securities are in certificated form, with such certificates.
The Conversion Request shall (i) set forth the number of
Securities to be converted and the name or names, if other
than the Holder, in which the shares of Capital Stock should
be issued and (ii) direct the Conversion Agent (a) to exchange
such Securities for a portion of the Debentures held by the
Trust (at the rate of exchange specified in the preceding
paragraph) and (b) to immediately convert such Debentures on
behalf of such Holder, into Capital Stock (at the conversion
rate specified in the preceding paragraph). The Conversion
Agent shall notify the Trust of the Holder's election to
exchange Securities for a portion of the Debentures held by
the Trust and the Trust shall, upon receipt of such notice,
deliver to the Conversion Agent the appropriate principal
amount of Debentures for exchange in accordance with this
Section. The Conversion Agent shall thereupon notify the
Sponsor of the Holder's election to convert such Debentures
into shares of Capital Stock. Holders of Securities at the
close of business on a Distribution record date will be
entitled to receive the Distribution payable on such
Securities on the corresponding Distribution payment date
notwithstanding the conversion of such Securities following
such record date but prior to such distribution payment date.
Except as provided above, neither the Trust nor the Sponsor
will make, or be required to make, any payment, allowance or
adjustment upon any conversion on account of any accumulated
and unpaid Distributions accrued on the Securities, whether or
not in arrears, (including any Additional Amounts accrued
thereon) surrendered for conversion, or on account of any
accumulated and unpaid dividends on the shares of Capital
Stock issued upon such conversion, except to the extent that
such shares are held of
<PAGE> 83
13
record on the record date for any such distributions.
Securities shall be deemed to have been converted immediately
prior to the close of business on the day on which a Notice of
Conversion relating to such Securities is received by the
Trust in accordance with the foregoing provision (the
"Conversion Date"). The Person or Persons entitled to receive
the Capital Stock issuable upon conversion of the Debentures
shall be treated for all purposes as the record holder or
holders of such Capital Stock at such time. As promptly as
practicable on or after the Conversion Date, the Sponsor
shall issue and deliver at the office of the Conversion Agent
a certificate or certificates for the number of full shares of
Capital Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to
the Person or Persons entitled to receive the same, unless
otherwise directed by the Holder in the notice of conversion
and the Conversion Agent shall distribute such certificate or
certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
Firstar Bank, National Association N.A. "Conversion Agent" for
the purpose of effecting the conversion of Securities in
accordance with this Section. In effecting the conversion and
transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities
directing it to effect such conversion transactions. The
Conversion Agent is hereby authorized (i) to exchange
Securities from time to time for Debentures held by the Trust
in connection with the conversion of such Securities in
accordance with this Section and (ii) to convert all or a
portion of the Debentures into Capital Stock and thereupon to
deliver such shares of Capital Stock in accordance with the
provisions of this Section and to deliver to the Trust a new
Debenture or Debentures for any resulting unconverted
principal amount.
(d) No fractional shares of Capital Stock will be issued as a
result of conversion, but in lieu thereof, such fractional
interest will be paid in cash by the Sponsor to the Trust,
which in turn will make such payment to the Holder or Holders
of Securities so converted.
<PAGE> 84
14
(e) The Sponsor shall at all times reserve and keep available out
of its authorized and unissued Capital Stock, solely for
issuance upon the conversion of the Debentures, free from any
preemptive or other similar rights, such number of shares of
Capital Stock as shall from time to time be issuable upon the
conversion of all the Debentures then outstanding.
Notwithstanding the foregoing, the Sponsor shall be entitled
to deliver upon conversion of Debentures, shares of Capital
Stock reacquired and held in the treasury of the Sponsor (in
lieu of the issuance of authorized and unissued shares of
Capital Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or
encumbrances. Any shares of Capital Stock issued upon
conversion of the Debentures shall be duly authorized, validly
issued and fully paid and nonassessable. The Trust shall
deliver the shares of Capital Stock received upon conversion
of the Debentures to the converting Holder free and clear of
all liens, charges, security interests and encumbrances,
except for United States withholding taxes. Each of the
Sponsor and the Trust shall prepare and shall use its best
efforts to obtain and keep in force such governmental or
regulatory permits or other authorizations as may be required
by law, and shall comply with all applicable requirements as
to registration or qualification of the Capital Stock (and all
requirements to list the Capital Stock issuable upon
conversion of Debentures that are at the time applicable), in
order to enable the Sponsor to lawfully issue Capital Stock to
the Trust upon conversion of the Debentures and the Trust to
lawfully deliver the Capital Stock to each Holder upon
conversion of the Securities.
(f) The Sponsor will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Capital Stock on
conversion of Debentures and the delivery of the shares of
Capital Stock by the Trust upon conversion of the Securities.
The Sponsor shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in
the issue and delivery of shares of Capital Stock in a name
other than that in which the Securities so converted were
registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the
Trust the amount of any such tax, or has established to the
satisfaction of the Trust that such tax has been paid.
<PAGE> 85
15
(g) Nothing in the preceding Paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the
terms of the Securities set forth in this Annex I to the
Declaration or in the Declaration itself or otherwise require
the Property Trustee or the Trust to pay any amounts on
account of such withholdings.
6. Voting Rights - Preferred Securities.
(a) Except as provided under paragraphs 6(b) and 8, in the
Business Trust Act and as otherwise required by law, the
Declaration and the Indenture, the Holders of the Preferred
Securities will have no voting rights.
(b) In addition to the rights of the Holders of the Preferred
Securities with respect to the enforcement of payment of
principal and interest on the Debentures set forth herein, in
the Declaration or in the Indenture, if (i) a Debenture Event
of Default occurs and is continuing or (ii) the Company
defaults under the Guarantee (each of (i) and (ii) being an
"Appointment Event"), then the Holders of the Preferred
Securities, acting as a single class, will be entitled by the
vote of a Majority in liquidation amount of the Preferred
Securities to appoint a Special Trustee in accordance with
Section 5.06(a)(ii)(B) of the Declaration. Any Holder of
Preferred Securities (other than the Sponsor, or any entity
directly or indirectly controlling or controlled by or under
direct or indirect common control with the Sponsor) will be
entitled to nominate any person to be appointed as Special
Trustee. Not later than 30 days after such right to appoint a
Special Trustee arises, the Trustees will convene a meeting
for the purpose of appointing a Special Trustee. If the
Trustees fail to convene such meeting within such 30-day
period, the Holders of not less than 10% in aggregate
liquidation amount of the Preferred Securities will be
entitled to convene such meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting
will be the close of business on the Business Day that is one
Business Day before the day on which notice of the meeting is
sent to the Holders. The provisions of the Declaration
relating to the convening and conduct of the meetings of the
Holders will apply with respect to any such meeting.
<PAGE> 86
16
Any Special Trustee so appointed shall cease to be a Special
Trustee if the Appointment Event pursuant to which the Special
Trustee was appointed and all other Appointment Events cease
to be continuing. A Special Trustee may be removed without
cause at any time by vote of the Holders of a Majority in
liquidation amount of the Preferred Securities at a meeting
of the Holders of the Preferred Securities in accordance with
Section 5.06(a)(ii)(B) of the Declaration. The Holders of 10%
in liquidation amount of the Preferred Securities will be
entitled to convene such a meeting in accordance with Section
12.02 of the Declaration. The record date for such meeting
will be the close of business on the Business Day which is one
Business Day before the day on which the notice of meeting is
sent to Holders. Notwithstanding the appointment of a Special
Trustee, the Sponsor shall retain all rights under the
Indenture, including the right to defer payments of interest
by extending the interest payment period on the Debentures.
Subject to the requirements set forth in this paragraph, the
Holders of a majority in liquidation amount of the Preferred
Securities, voting separately as a class may, and the Trustees
shall not, without obtaining the prior approval of the Holders
of a Majority in aggregate liquidation amount of all
outstanding Preferred Securities (i) direct the time, method,
and place of conducting any proceeding for any remedy
available to the Property Trustee under the Indenture, or
executing any trust or power conferred upon the Property
Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under Section
5.13 of the Indenture or otherwise, (iii) exercise any right
to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, provided,
however, that, where a consent under the Indenture would
require the consent or act of the Holders of greater than a
majority of the Holders in principal amount of Debentures
affected thereby (a "Super Majority"), the Property Trustee
may only give such consent or take such action at the
direction of the Holders of at least the proportion in
liquidation preference of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal
<PAGE> 87
17
amount of the Debentures outstanding. The Property Trustee
shall not, and none of the other Trustees shall in any event,
revoke any action previously authorized or approved by a vote
of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and
place of conducting any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with
the directions of the Holders of the Preferred Securities
under this paragraph unless the Property Trustee has obtained
an opinion of tax counsel to the effect that, as a result of
such action, the Trust will not fail to be classified as a
grantor trust for United States federal income tax purposes.
If a Declaration Event of Default has occurred and is
continuing and such event is attributable to the failure of
the Debenture Issuer to pay interest or principal on the
Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption on the redemption date),
then a Holder of Preferred Securities may directly institute a
proceeding for enforcement of payment to such Holder (a
"Direct Action") of the principal of or interest on the
Debentures having a principal amount equal to the aggregate
liquidation amount of the Preferred Securities of such Holder
on or after the respective due date specified in the
Debentures. Except as provided in the preceding sentence, the
Holders of Preferred Securities will not be able to exercise
directly any other remedy available to the Holders of the
Debentures. In connection with any Direct Action, the
Debenture Issuer will be subrogated to the rights of such
Holder of Preferred Securities under the Declaration to the
extent of any payment made by the Debenture Issuer to such
Holder of Preferred Securities in such Direct Action. In
addition, the Holders of at least 25% in aggregate liquidation
preference of Preferred Securities outstanding shall have the
right to institute suit on behalf of the Trust for the
enforcement of the right to receive payment of the principal
of and interest on the Debentures on or after the Stated
Maturity (as defined in the Indenture) of such Debentures or,
in the case of redemption, on the Redemption Date (as defined
in the Indenture), in the event the Debenture Trustee
<PAGE> 88
18
or the Property Trustee fails to do so in accordance with the
terms of the Indenture.
Any approval or direction of Holders of Preferred Securities
may be given at a separate meeting of Holders of Preferred
Securities convened for such purpose, at a meeting of all of
the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of
any meeting at which Holders of Preferred Securities are
entitled to vote, or of any matter upon which action by
written consent of such Holders is to be taken, to be mailed
to each Holder of record of Preferred Securities. Each such
notice will include a statement setting forth the following
information (i) the date of such meeting or the date by which
such action is to be taken, (ii) a description of any
resolution proposed for adoption at such meeting on which such
Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Preferred Securities
will be required for the Trust to redeem and cancel Preferred
Securities or to distribute the Debentures in accordance with
the Declaration and the terms of the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances
described above, any of the Preferred Securities that are
owned by the Sponsor or any Affiliate of the Sponsor shall not
be entitled to vote or consent and shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
7. Voting Rights - Common Securities.
(a) Except as provided under paragraphs 7(b), (c) and 8, in the
Business Trust Act and as otherwise required by law and the
Declaration, the Holders of the Common Securities will have no
voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to
appoint, remove or replace any Trustee, subject to the
exclusive right of the Holders of the Preferred Securities to
appoint, remove or replace a Special Trustee.
<PAGE> 89
19
(c) Subject to Section 2.06 of the Declaration and only after the
Event of Default with respect to the Preferred Securities has
been cured, waived, or otherwise eliminated and subject to the
requirements of the second to last sentence of this paragraph,
the Holders of a Majority in liquidation amount of the Common
Securities, voting separately as a class, may direct the time,
method, and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the
Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the
Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable
under Section 5.13 of the Indenture, or (iii) exercise any
right to rescind or annul a declaration that the principal of
all the Debentures shall be due and payable, provided that,
where a consent or action under the Indenture would require a
Super Majority, the Property Trustee may only give such
consent or take such action at the direction of the Holders of
at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the
aggregate principal amount of the Debentures outstanding.
Pursuant to this paragraph 7(c), the Property Trustee shall
not revoke any action previously authorized or approved by a
vote of the Holders of the Preferred Securities, except by a
subsequent vote of the Holders of the Preferred Securities.
Other than with respect to directing the time, method and
place of conducting any remedy available to the Property
Trustee or the Debenture Trustee as set forth above, the
Property Trustee shall not take any action in accordance with
the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an
opinion of tax counsel to the effect that, as a result of such
action the Trust will not fail to be classified as a grantor
trust for United States federal income tax purposes. If the
Property Trustee fails to enforce its rights, as holder of
the Debentures, under the Indenture, any Holder of Common
Securities may, after a period of 30 days has elapsed from
such Holder's written request to the Property Trustee to
enforce such rights, institute a legal proceeding directly
against the Sponsor, to enforce the Property Trustee's rights,
as holder of
<PAGE> 90
20
the Debentures, under the Indenture, without first instituting
any legal proceeding against the Property Trustee or any other
Person.
Any approval or direction of Holders of Common Securities may
be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders
of Securities in the Trust or pursuant to written consent. The
Administrative Trustees will cause a notice of any meeting at
which Holders of Common Securities are entitled to vote, or of
any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record
of Common Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the
date by which such action is to be taken, (ii) a description
of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote or of such matter upon
which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common
Securities or to distribute the Debentures in accordance with
the Declaration and the terms of the Securities.
8. Amendments to Declaration and Indenture.
(a) In addition to any requirements under Section 12.01 of the
Declaration, if any proposed amendment to the Declaration
provides for, or the Administrative Trustees otherwise propose
to effect, (i) any action that would adversely affect the
powers, preferences or rights of the Securities, whether by
way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other
than as described in Section 8.01 of the Declaration, then the
Holders of outstanding Securities will be entitled to vote on
such amendment or proposal (but not on any other amendment or
proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least
a Majority in liquidation amount of the Securities, voting
together as a single class, provided, however, that, the
rights of Holders of Preferred Securities under Article V of
the Declaration to appoint, remove or replace a Special
<PAGE> 91
21
Trustee shall not be amended without the consent of each
Holder of Preferred Securities; and provided further that if
any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only
the Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the
approval of at least a Majority in liquidation amount of such
class of Securities.
(b) In the event the consent of the Property Trustee as the holder
of the Debentures is required under the Indenture with respect
to any amendment, modification or termination of the
Indenture or the Debentures, the Property Trustee shall
request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification or
termination as directed by at least the same proportion in
aggregate stated liquidation preference of the Securities;
provided, however, that the Property Trustee shall not take
any action in accordance with the directions of the Holders of
the Securities under this paragraph 8(b) unless the Property
Trustee has obtained an opinion of tax counsel to the effect
that for the purposes of United States federal income tax the
Trust will not be classified as other than a grantor trust on
account of such action.
9. Pro Rata.
A reference in these terms of the Securities to any payment,
Distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, on any Distribution Date or redemption date
an Event of Default under the Declaration has occurred and is continuing, in
which case no payment of any Distribution on, or amount payable upon redemption
of, any Common Security, and no other payment on account of the redemption,
liquidation or other acquisition of Common Securities, shall be made unless
payment in full in cash of all accumulated and unpaid Distributions on all
outstanding Preferred Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the amount payable upon redemption
of the Preferred Securities, the full amount of such amount in respect of all
outstanding Preferred Securities shall have been made or
<PAGE> 92
22
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the amount
payable upon redemption of Preferred Securities then due and payable.
10. Ranking.
The Preferred Securities rank pari passu and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event of
Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Property Trustee, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Preferred Securities.
11. Acceptance of Securities Guarantees and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture which
are incorporated by reference herein and which include, among other things,
provisions relating to certain rights of the Holders of the Preferred Securities
all as set forth therein.
12. No Preemptive Rights.
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
13. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request to
the Sponsor at its principal place of business.
<PAGE> 93
23
EXHIBIT A-1
FORM OF
PREFERRED SECURITY
[FORM OF FACE OF SECURITY]
[Include if Preferred Security is in global form and the
Depository Trust Company is the Depository -- UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
[Include if Preferred Security is in global form -- TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART,
TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE DECLARATION REFERRED TO
BELOW.]
<PAGE> 94
Certificate Number Number of Preferred Securities
[CUSIP NO. [ ]]
[ISIN NO. [ ]]
Preferred Securities
of
Chemed Capital Trust
Convertible Preferred Trust Securities
(liquidation amount $27 per Convertible Preferred Security)
Chemed Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
____________________________________________________________
(the "Holder") is the registered owner of preferred securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Convertible Preferred Trust Securities (liquidation amount $27
per Convertible 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. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Preferred
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of January -, 2000, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
herein but not defined shall have the meaning given them in the Declaration. The
Holder is entitled to the benefits of the Preferred Securities Guarantee to the
extent provided therein. The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee and the Indenture to a Holder without charge upon
written request to the Trust at its principal place of business.
Reference is hereby made to select provisions of the Preferred
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
Unless the Property Trustee's Certificate of Authentication
hereon has been properly executed, these Preferred Securities shall not be
entitled to any benefit under the Declaration or be valid or obligatory for any
purpose.
<PAGE> 95
2
IN WITNESS WHEREOF, the Trust has executed this certificate
this -, 20[ ].
Chemed Capital Trust
By:
Name:
Title:
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
Dated: ,
Firstar Bank, National Association,
as Property Trustee
By: ___________________________________
Authorized Signatory
<PAGE> 96
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed
at a rate per annum of $2.00 for each Preferred Security (the "Coupon Rate"),
such rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears for more than one quarter will bear
interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
such quarterly distributions, additional distributions on quarterly
distributions not paid on the applicable Distribution Date, Special
Distributions and Additional Sums, as applicable. A Distribution is payable only
to the extent that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds available
therefor. The amount of Distributions payable for any period will be computed
for any full quarterly Distribution period on the basis of a 360-day year of
twelve 30-day months, except that the Distribution payable on 15, 2000, will be
$0.50 for each Preferred Security, and for any period shorter than a full
quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the
Preferred Securities will be cumulative, will accrue from the date of their
original issuance and will be payable quarterly in arrears, on March 15, June
15, September 15 and December 15 of each year, commencing on March 15, 2000, to
Holders of record at the close of business on the first day of the month next
preceding the applicable payment date, which payment dates shall correspond to
the interest payment dates (each an "Interest Payment Date") on the Debentures.
The Debenture Issuer has the right under the Indenture to defer payments of
interest after March 15, 2000, by extending the interest payment period from
time to time on the Debentures for a period not exceeding 20 consecutive
quarters (each a "Deferral Period") and, as a consequence of such deferral,
Distributions will also be deferred after March 15, 2000. Despite such deferral,
quarterly Distributions will continue to accrue with interest thereon (to the
extent permitted by applicable law) at the Coupon Rate compounded quarterly
during any such Deferral Period. Prior to the termination of any such Deferral
Period, the Debenture Issuer may further extend such Deferral Period; provided
that such Deferral Period together with all such previous and further deferrals
thereof may not exceed 20 consecutive quarters or extend beyond the maturity
(whether at the stated maturity or by declaration of acceleration, call for
redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable on an Interest Payment Date elected by the
Company to Holders as they appear on the books and records of the Trust on the
record date fixed for such Interest Payment Date. Upon the termination of any
Deferral Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Deferral Period, subject to the above requirements.
The Preferred Securities shall be redeemable as provided in
the Declaration.
The Preferred Securities shall be convertible into shares of
Capital Stock, through (i) the exchange of Preferred Securities for a portion of
the Debentures and (ii) the immediate conversion of such Debentures into Capital
Stock, in the manner and according to the terms set forth in the Declaration.
<PAGE> 97
CONVERSION REQUEST
To: Firstar Bank, National Association
as Property Trustee of
Chemed Capital Trust
The undersigned owner of these Preferred Securities hereby
irrevocably exercises the option to convert these Preferred Securities, or the
portion below designated, into Capital Stock of CHEMED CORPORATION (the "Capital
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January -, 2000, by Kevin McNamara,
Timothy O'Toole and Sandra Laney as Administrative Trustees, First Union Trust
Company, National Association, as Delaware Trustee, Firstar Bank, National
Association, as Property Trustee, Chemed Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Preferred Securities, the undersigned hereby
directs the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Preferred Securities for a portion of the Debentures (as that term
is defined in the Declaration) held by the Trust (at the rate of exchange
specified in the terms of the Preferred Securities set forth as Annex I to the
Declaration) and (ii) immediately convert such Debentures on behalf of the
undersigned, into Capital Stock (at the conversion rate specified in the terms
of the Preferred Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
<PAGE> 98
2
Date: ____________, ____
in whole __ in part ___
Number of Preferred Securities to be
converted: ___________________
If a name or names other
than the undersigned,
please indicate in the
spaces below the name or
names in which the shares
of Capital Stock are to be
issued, along with the
address or addresses of
such person or persons
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and Social
Security or Other Identifying Number
Signature Guarantee:*
- --------
* (Signature must be guaranteed by an "eligible guarantor institution" that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.)
<PAGE> 99
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Preferred Security on the books of the Trust. The
agent may substitute another to act for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Preferred Security
Certificate)
Signature Guarantee:**
- --------------------------------
** (Signature must be guaranteed by an "eligible guarantor institution"
that is, a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934.)
<PAGE> 100
EXHIBIT A-2
FORM OF
COMMON SECURITY
[FORM OF FACE OF SECURITY]
[OTHER THAN AS PROVIDED IN THE DECLARATION (AS DEFINED HEREIN), THIS
SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT TO A
RELATED PARTY (AS DEFINED IN THE DECLARATION) OF CHEMED CORPORATION.]
Certificate Number Number of Common Securities
Common Securities
of
Chemed Capital Trust
Convertible Common Securities
(liquidation amount $27 per Convertible Common Security)
Chemed Capital Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that
(the "Holder") is the registered owner of common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the Convertible Common Securities (liquidation amount $27 per
Convertible Common Security) (the "Common Securities"). The Common Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of the Trust dated as of January -,
2000, as the same may be amended from time to time (the "Declaration"),
including the designation of the terms of the Common Securities as set forth in
Annex I to the Declaration. Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Common Securities Guarantee to the extent provided therein. The
Sponsor will provide a copy of the Declaration, the Common Securities Guarantee
and the Indenture to a Holder without charge upon written request to the Sponsor
at its principal place of business.
Reference is hereby made to select provisions of the Common
Securities set forth on the reverse hereof, which select provisions shall for
all purposes have the same effect as if set forth at this place.
<PAGE> 101
2
Upon receipt of this certificate, the Sponsor is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat for United States
federal income tax purposes the Debentures as indebtedness and the Common
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this January -, 2000.
Chemed Capital Trust
By:
Name:
Title:
<PAGE> 102
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of $2.00 for each Common Security (the "Coupon Rate"), such
rate being the rate of interest payable on the Debentures to be held by the
Property Trustee. Distributions in arrears for more than one quarter will bear
interest thereon compounded quarterly at the Coupon Rate (to the extent
permitted by applicable law). The term "Distributions" as used herein includes
quarterly distributions, additional distributions on quarterly distributions not
paid on the applicable Distribution Date, Special Distributions and Additional
Sums, as applicable. A Distribution is payable only to the extent that payments
are made in respect of the Debentures held by the Property Trustee and to the
extent the Property Trustee has funds available therefor. Except for the
interest payable on March 15, 2000, the amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year of twelve 30-day months, and for any period shorter than a
full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
Except as otherwise described below, Distributions on the
Common Securities will be cumulative, will accrue from the date of their
original issuance and will be payable quarterly in arrears, on March 15, June
15, September 15 and December 15 of each year, commencing on March 15, 2000, to
Holders of record one (1) day prior to such payment dates, which payment dates
shall correspond to the interest payment dates (each, an "Interest Payment
Date") on the Debentures. The Debenture Issuer has the right under the Indenture
to defer payments of interest after March 15, 2000, by extending the interest
payment period from time to time on the Debentures for a period not exceeding 20
consecutive quarters (each a "Deferral Period") and, as a consequence of such
deferral, Distributions will also be deferred after March 15, 2000. Despite such
deferral, quarterly Distributions will continue to accrue with interest thereon
(to the extent permitted by applicable law) at the Coupon Rate compounded
quarterly during any such Deferral Period. Prior to the termination of any such
Deferral Period, the Debenture Issuer may further extend such Deferral Period;
provided that such Deferral Period together with all such previous and further
deferrals thereof may not exceed 20 consecutive quarters or extend beyond the
maturity (whether at the stated maturity or by declaration of acceleration, call
for redemption or otherwise) of the Debentures under the Indenture. Payments of
accrued Distributions will be payable on an Interest Payment Date elected by the
Company to Holders as they appear on the books and records of the Trust on the
record date fixed for such Interest Payment Date. Upon the termination of any
Deferral Period and the payment of all amounts then due, the Debenture Issuer
may commence a new Deferral Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the
Declaration.
The Common Securities shall be convertible into shares of
Capital Stock, through (i) the exchange of Common Securities for a portion of
the Debentures and (ii) the immediate conversion of such Debentures into Capital
Stock, in the manner and according to the terms set forth in the Declaration.
<PAGE> 103
CONVERSION REQUEST
To: Firstar Bank, National Association
as Property Trustee of
Chemed Capital Trust
The undersigned owner of these Common Securities hereby
irrevocably exercises the option to convert these Common Securities, or the
portion below designated, into Capital Stock of CHEMED CORPORATION (the "Capital
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January -, 2000, by Kevin McNamara,
Timothy O'Toole and Sandra Laney as Administrative Trustees, First Union Trust
Company, National Association, as Delaware Trustee, Firstar Bank, National
Association, as Property Trustee, Chemed Corporation, as Sponsor, and by the
Holders, from time to time, of individual beneficial interests in the Trust to
be issued pursuant to the Declaration. Pursuant to the aforementioned exercise
of the option to convert these Common Securities, the undersigned hereby directs
the Conversion Agent (as that term is defined in the Declaration) to (i)
exchange such Common Securities for a portion of the Debentures (as that term is
defined in the Declaration) held by the Trust (at the rate of exchange specified
in the terms of the Common Securities set forth as Annex I to the Declaration)
and (ii) immediately convert such Debentures on behalf of the undersigned, into
Capital Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
<PAGE> 104
2
Date: ____________, ____
in whole __ in part __
Number of Common Securities to be
converted: _____________________
If a name or names other
than the undersigned,
please indicate in the
spaces below the name or
names in which the shares
of Capital Stock are to be
issued, along with the
address or addresses of
such person or persons
-------------------------------------------
-------------------------------------------
-------------------------------------------
-------------------------------------------
Signature (for conversion only)
Please Print or Typewrite Name
and Address, Including Zip Code,
and Social Security or Other
Identifying Number
------------------------------------------
------------------------------------------
Signature Guarantee:*** _______________________
- --------
*** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.)
<PAGE> 105
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common Security
Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints __________________________________________________
____________________________________ agent to transfer this Common Security
Certificate on the books of the Trust. The agent may substitute another to act
for him or her.
Date: _______________________
Signature: __________________
(Sign exactly as your name appears on the other side of this Common Security
Certificate)
Signature Guarantee****: __________________________________________________
- --------
**** (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.)
<PAGE> 1
Exhibit (b)(3)
================================================================================
CHEMED CORPORATION
TO
FIRSTAR BANK,
NATIONAL ASSOCIATION
----------------
INDENTURE
DATED AS OF JANUARY -, 2000
----------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
Definitions and Other
Provisions of General Application
SECTION 1.01. Definitions..................................................................... 3
SECTION 1.02. Compliance Certificates and
Opinions......................................................... 13
SECTION 1.03. Form of Documents Delivered
to Trustee....................................................... 14
SECTION 1.04. Acts of Holders; Record Dates................................................... 15
SECTION 1.05. Notices, Etc., to Trustee and
the Company...................................................... 17
SECTION 1.06. Notice to Holders; Waiver....................................................... 18
SECTION 1.07. Conflict with Trust Indenture Act............................................... 18
SECTION 1.08. Effect of Headings and Table of
Contents......................................................... 19
SECTION 1.09. Successors and Assigns.......................................................... 19
SECTION 1.10. Separability Clause............................................................. 19
SECTION 1.11. Benefits of Indenture........................................................... 19
SECTION 1.12. Governing Law; Jurisdiction..................................................... 19
SECTION 1.13. Legal Holidays.................................................................. 19
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally................................................................. 20
SECTION 2.02. Initial Issuance to
Property Trustee................................................. 20
SECTION 2.03. Provisions Required in
Global Security.................................................. 21
SECTION 2.04. Issuance of Global Securities
to Holders....................................................... 21
ARTICLE III
The Securities
SECTION 3.01. Title and Terms................................................................. 22
SECTION 3.02. Denominations................................................................... 23
SECTION 3.03. Execution, Authentication,
Delivery and Dating.............................................. 23
SECTION 3.04. Temporary Securities............................................................ 24
SECTION 3.05. Global Securities............................................................... 25
</TABLE>
<PAGE> 3
3
<TABLE>
<S> <C> <C>
SECTION 3.06. Registration, Transfer and
Exchange Generally; Certain
Transfers and Exchanges.......................................... 26
SECTION 3.07. Mutilated, Destroyed, Lost
and Stolen Securities............................................ 27
SECTION 3.08. Payment of Interest; Interest
Rights Preserved................................................. 28
SECTION 3.09. Persons Deemed Owners........................................................... 30
SECTION 3.10. Cancelation..................................................................... 31
SECTION 3.11. Right of Set Off................................................................ 31
SECTION 3.12. CUSIP Numbers................................................................... 31
SECTION 3.13. Extension of Interest Payment
Period; Notice of Extension...................................... 31
SECTION 3.14. Paying Agent, Security Registrar
and Conversion Agent............................................. 33
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge
of Indenture..................................................... 33
SECTION 4.02. Application of Trust Money...................................................... 34
ARTICLE V
Remedies
SECTION 5.01. Events of Default............................................................... 35
SECTION 5.02. Acceleration of Maturity;
Rescission and Annulment......................................... 36
SECTION 5.03. Collection of Indebtedness and
Suits for Enforcement by Trustee................................. 38
SECTION 5.04. Trustee May File Proofs of Claim................................................ 38
SECTION 5.05. Trustee May Enforce Claims
Without Possession of Securities................................. 39
SECTION 5.06. Application of Money Collected.................................................. 39
SECTION 5.07. Limitation on Suits............................................................. 39
SECTION 5.08. Unconditional Right of Holders to
Receive Principal and Interest
and to Convert................................................... 40
SECTION 5.09. Restoration of Rights and
Remedies........................................................ 41
SECTION 5.10. Rights and Remedies Cumulative.................................................. 41
SECTION 5.11. Delay or Omission Not Waiver.................................................... 41
SECTION 5.12. Control by Holders.............................................................. 41
SECTION 5.13. Waiver of Past Defaults......................................................... 42
</TABLE>
<PAGE> 4
4
<TABLE>
<S> <C> <C>
SECTION 5.14. Undertaking for Costs........................................................... 42
SECTION 5.15. Waiver of Stay or Extension Laws................................................ 42
SECTION 5.16. Enforcement by Holders of
Preferred Securities............................................. 43
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities............................................. 43
SECTION 6.02. Notice of Defaults.............................................................. 44
SECTION 6.03. Certain Rights of Trustee....................................................... 44
SECTION 6.04. Not Responsible for Recitals
or Issuance of Securities........................................ 45
SECTION 6.05. May Hold Securities............................................................. 46
SECTION 6.06. Money Held in Trust............................................................. 46
SECTION 6.07. Compensation and Reimbursement.................................................. 46
SECTION 6.08. Disqualification; Conflicting
Interests........................................................ 47
SECTION 6.09. Corporate Trustee Required;
Eligibility...................................................... 47
SECTION 6.10. Resignation and Removal;
Appointment of Successor......................................... 47
SECTION 6.11. Acceptance of Appointment by
Successor........................................................ 49
SECTION 6.12. Merger, Conversion, Consolidation or
Succession to Business........................................... 49
SECTION 6.13. Preferential Collection of Claims
Against Company....................................................................... 49
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and
Addresses of Holders.................................................................. 50
SECTION 7.02. Preservation of Information;
Communications to Holders............................................................. 50
SECTION 7.03. Reports by Trustee.............................................................. 50
SECTION 7.04. Reports by Company.............................................................. 51
SECTION 7.05. Tax Reporting................................................................... 51
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc.,
Only on Certain Terms............................................ 51
SECTION 8.02. Successor Substituted........................................................... 53
</TABLE>
<PAGE> 5
5
<TABLE>
<S> <C> <C>
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without
Consent of Holders............................................... 53
SECTION 9.02. Supplemental Indentures with
Consent of Holders............................................... 54
SECTION 9.03. Execution of Supplemental
Indentures....................................................... 55
SECTION 9.04. Effect of Supplemental Indentures............................................... 55
SECTION 9.05. Conformity with Trust
Indenture Act.................................................... 55
SECTION 9.06. Reference in Securities to
Supplemental Indentures.......................................... 56
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest.............................................. 56
SECTION 10.02. Maintenance of Office or Agency................................................ 56
SECTION 10.03. Money for Security Payments to
Be Held in Trust............................................... 57
SECTION 10.04. Statement by Officers as to
Default........................................................ 58
SECTION 10.05. Limitation on Dividends;
Transactions with Affiliates;
Covenants as to the Trust........................................ 58
SECTION 10.06. Payment of Expenses of the Trust............................................... 59
ARTICLE XI
Redemption of Securities
SECTION 11.01. Optional Redemption............................................................ 60
SECTION 11.02. Tax Event Redemption........................................................... 60
SECTION 11.03. Selection by Trustee of Securities
to Be Redeemed................................................. 61
SECTION 11.04. Notice of Redemption........................................................... 62
SECTION 11.05. Deposit of Redemption Price.................................................... 62
SECTION 11.06. Securities Payable on
Redemption Date................................................ 63
SECTION 11.07. Securities Redeemed in Part.................................................... 63
ARTICLE XII
Subordination of Securities
SECTION 12.01. Agreement to Subordinate....................................................... 64
SECTION 12.02. Default on Senior Debt......................................................... 64
</TABLE>
<PAGE> 6
6
<TABLE>
<S> <C> <C>
SECTION 12.03. Liquidation; Dissolution;
Bankruptcy..................................................... 65
SECTION 12.04. Subrogation.................................................................... 67
SECTION 12.05. Trustee to Effectuate
Subordination.................................................. 68
SECTION 12.06. Notice by the Company.......................................................... 68
SECTION 12.07. Rights of the Trustee;
Holders of Senior Debt......................................... 69
SECTION 12.08. Subordination May Not Be Impaired.............................................. 69
ARTICLE XIII
Conversion of Securities
SECTION 13.01. Conversion Rights.............................................................. 70
SECTION 13.02. Conversion Procedures.......................................................... 70
SECTION 13.03. Conversion Price Adjustments................................................... 73
SECTION 13.04. Reclassification, Consolidation,
Merger or Sale of Assets....................................... 79
SECTION 13.05. Notice of Adjustments of
Conversion Price............................................... 80
SECTION 13.06. Prior Notice of Certain Events................................................. 80
SECTION 13.07. Adjustments in Case of
Fundamental Changes............................................ 81
SECTION 13.08. Dividend or Interest Reinvestment
Plans.......................................................... 84
SECTION 13.09. Certain Additional Rights...................................................... 85
SECTION 13.10. Trustee Not Responsible for
Determining Conversion Price or
Adjustments.................................................... 85
ARTICLE XIV
Immunity of Incorporators,
Stockholders, Officers and Directors
SECTION 14.01. No Recourse.................................................................... 86
</TABLE>
<PAGE> 7
7
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- --------------
<S> <C>
Section 310(a)(1)................................... 6.09
(a)(2)................................... 6.09
(a)(3)................................... Not Applicable
(a)(4)................................... Not Applicable
(b)...................................... 6.08, 6.10
Section 311(a)...................................... 6.13
(b)...................................... 6.13
Section 312(a)...................................... 7.01
7.02(a)
(b)...................................... 7.02(b)
(c)...................................... 7.02(c)
Section 313(a)...................................... 7.03
(a)(4)................................... 7.03
(b)...................................... 7.03
(c)...................................... 7.03
(d)...................................... 7.03
Section 314(a)...................................... 7.04
(b)...................................... Not Applicable
(c)(1)................................... 1.02
(c)(2)................................... 1.02
(c)(3)................................... Not Applicable
(d)...................................... Not Applicable
(e)...................................... 1.02
Section 315(a)...................................... 6.01
(b)...................................... 6.03
(c)...................................... 6.02
(d)...................................... 6.01
(e)...................................... 6.01
Section 316(a)(1)(A)................................ 5.14
(a)(1)(B)................................ 5.02
(a)(2)................................... 5.12
(b)...................................... 5.13
(c)...................................... Not Applicable
Section 317(a)(1)................................... 5.08
(a)(2)................................... 1.04(c)
(b)...................................... 5.03
Section 318(a)...................................... 5.04
1.03
1.07
</TABLE>
Note: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
<PAGE> 8
8
INDENTURE, dated as of January -, 2000,
between Chemed Corporation, a corporation duly
organized and existing under the laws of the State of
Delaware (herein called the "Company"), and Firstar
Bank, National Association, a United States banking
corporation, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
WHEREAS Chemed Capital Trust, a Delaware business trust (the
"Trust"), formed under the Amended and Restated Declaration of Trust among the
Company, as Sponsor, Firstar Bank, National Association, as property trustee
(the "Property Trustee"), and First Union Trust Company, National Association,
as Delaware trustee (the "Delaware Trustee"), and Kevin J. McNamara, Timothy S.
O'Toole, and Sandra Laney, as trustees (together with the Property Trustee and
the Delaware Trustee, the "Issuer Trustees"), dated as of January -, 2000, (the
"Declaration"), pursuant to the exchange offer dated December 23, 1999, of the
Company, will offer for exchange up to 2,000,000 of its Convertible Preferred
Trust Securities ("Preferred Securities") with a liquidation amount of $27 per
Preferred Security, having an aggregate liquidation amount with respect to the
assets of the Trust of up to $54,000,000 for outstanding shares of Capital
Stock, par value $1 per share, of the Company ("Capital Stock");
WHEREAS the Trust will use the Capital Stock acquired in the
exchange offer in exchange for the Preferred Securities to acquire from the
Company the Convertible Junior Subordinated Debentures Due 2030 (the
"Securities") in an aggregate principal amount of up to $54,000,000 on the basis
of one share of Capital Stock for each $27 principal amount of the Securities;
WHEREAS the trustees of the Trust, on behalf of the Trust,
will execute and deliver to the Company Common Securities evidencing an
ownership interest in the Trust, registered in the name of the Company, in an
aggregate amount equal to three percent of the capitalization of the Trust,
equivalent to up to 61,856 Common Securities (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"), with a
liquidation amount of $27 per Common Security, having an aggregate liquidation
amount with respect to the assets of the Trust of up to $1,670,112, in exchange
for Securities on the basis
<PAGE> 9
9
of one Common Security for each $27 principal amount of the Securities;
WHEREAS the Company is guaranteeing the payment of
distributions on the Trust Securities and payment of the Redemption Price (as
defined herein) and payments on liquidation with respect to the Trust
Securities, to the extent provided in the Common Securities Guarantee Agreement,
dated January -, 2000, between the Company and the Trust, and the Guarantee
Agreement, dated January -, 2000, between the Company and Firstar Bank, National
Association, as Guarantee Trustee, for the benefit of the holders of the Trust
Securities from time to time (together, the "Guarantee");
WHEREAS the Company has duly authorized the creation of an
issue of the Securities of substantially the tenor and amount hereinafter set
forth and to provide therefor the Company has duly authorized the execution and
delivery of this Indenture;
WHEREAS, so long as the Trust is a Holder of Securities and
any Preferred Securities are outstanding, the Declaration provides that the
holders of Preferred Securities may cause the Conversion Agent (as defined
herein) to (i) exchange such Preferred Securities for Securities held by the
Trust and (ii) immediately convert such Securities into Capital Stock (as
defined herein); and
WHEREAS all things necessary to make the Securities, when
executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company and to make this
Indenture a valid agreement of the Company, in accordance with their and its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders (as defined
<PAGE> 10
10
herein) thereof, it is mutually agreed, for the equal and proportionate benefit
of all Holders of the Securities, as follows:
ARTICLE I
Definitions and Other
Provisions of General Application
SECTION 1.01. Definitions. For all purposes of
this Indenture, except as otherwise expressly provided or
unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles; and
(4) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning
specified in Section 1.04.
"Additional Payments" means Compounded Interest and Additional
Sums, if any.
"Additional Sums" has the meaning specified in Section 3.01.
"Adjusted Reference Market Price" has the meaning specified in
Section 13.07(a)(i).
"Adjusted Relevant Price" has the meaning specified in Section
13.07(a)(i).
"Administrative Action" has the meaning specified in the
definition of Tax Event in this Section 1.01.
<PAGE> 11
11
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent" means any Registrar, Paying Agent, Conversion Agent
or co-registrar.
"Agent Member" means any member of, or participant in, the
Depositary.
"Applicable Conversion Price" has the meaning specified in
Section 13.01.
"Applicable Conversion Ratio" has the meaning specified in
Section 13.01.
"Applicable Rate" is equivalent to the rate of $2.00 per year
for each $27 principal amount.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Wilmington Delaware are authorized or required by law or executive order to
remain closed, or a day on which the corporate trust office of the Property
Trustee or the Trustee is closed for business.
"Closing Price" has the meaning specified in Section 13.07(b).
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created 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
<PAGE> 12
12
Indenture Act, then the body performing such duties at such time.
"Common Securities" has the meaning specified in the Third
Recital to this instrument.
"Capital Stock" includes any stock of any class of the Company
which has no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which is not subject to redemption by the Company. However,
subject to the provisions of Article XIII, shares issuable on conversion of
Securities shall include only shares of the class designated as Capital Stock of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided, that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on conversion shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Capital Stock Fundamental Change" has the meaning specified
in Section 13.07(b).
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Company Transaction" has the meaning specified in Section
13.04.
"Compounded Interest" has the meaning specified in Section
3.13.
"Conversion Agent" means the Person appointed to act on behalf
of the holders of Preferred Securities in
<PAGE> 13
13
effecting the conversion of Preferred Securities as and in the manner set forth
in the Declaration and Section 13.02 hereof.
"Conversion Date" has the meaning specified in Section 13.02.
"Corporate Trust Office" means the principal office of the
Trustee in Cincinnati, Ohio, at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is 425
Walnut Street, 6th Floor, Cincinnati, Ohio 45202.
"Declaration" has the meaning specified in the Recitals to
this instrument.
"Debt" means (i) the principal of and premium and interest, if
any, on indebtedness for money borrowed, (ii) purchase money and similar
obligations, (iii) obligations under capital leases, (iv) guarantees,
assumptions or purchase commitments relating to, or other transactions as a
result of which the Company is responsible for the payment of, such indebtedness
of others, (v) renewals, extensions and refunding of any such indebtedness, (vi)
interest or obligations in respect of any such indebtedness accruing after the
commencement of any insolvency or bankruptcy proceedings and (vii) obligations
associated with derivative products such as interest rate and currency exchange
contracts, foreign exchange contracts, commodity contracts and similar
arrangements.
"Defaulted Interest" has the meaning specified in Section
3.08.
"Deferral Period" has the meaning specified in Section 3.13.
"Deferral Notice" has the meaning specified in Section 3.13.
"Delaware Trustee" has the meaning given it in the first
recital of this instrument.
"Depositary" means The Depository Trust Company, or any
successor thereto.
"Dissolution Tax Opinion" has the meaning specified in the
definition of Tax Event in this Section 1.01.
"Entitlement Date" has the meaning specified in Section
13.07(b).
<PAGE> 14
14
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934.
"Expiration Date" has the meaning specified in Section
1.04(d).
"Expiration Time" has the meaning specified in Section
13.03(vi).
"Fundamental Change" has the meaning specified in Section
13.07(b).
"Global Security" means a Security issued in the form
prescribed in Section 2.03, issued to the Depositary or its nominee, and
registered in the name of the Depositary or its nominee.
"Guarantee" has the meaning specified in the Fourth Recital to
this instrument.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Conversion Price" has the meaning specified in
Section 13.01.
"Initial Reference Market Rate" has the meaning specified in
Section 13.07(b).
"Initial Conversion Ratio" has the meaning specified in
Section 13.01.
"Interest Payment Date" has the meaning specified in Section
3.01.
"Issuer Trustees" has the meaning specified in the First
Recital of this Indenture.
<PAGE> 15
15
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"90 Day Period" has the meaning specified in Section 11.02.
"NNM" means the National Market System of the National
Association of Securities Dealers, Inc., or any successor national automated
interdealer quotation system.
"Non-Stock Fundamental Change" has the meaning specified in
Section 13.07(b).
"No Recognition Opinion" means an opinion of a nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters, which opinion may rely on published
revenue rulings of the Internal Revenue Service, to the effect that the Holders
of the Securities will not recognize any income, gain or loss for United States
Federal income tax purposes as a result of the liquidation of the Trust and the
distribution of the Securities to the holders of the Preferred Securities.
"Notice of Conversion" means the notice to be given by a
Holder of Preferred Securities to the Conversion Agent directing the Conversion
Agent to exchange such Preferred Securities for Securities and to convert such
Securities into Capital Stock on behalf of such holder.
"Notice of Default" has the meaning specified in Section 5.01.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman of the Board, the President or a Vice
President, and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary, of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.04 shall
be the principal executive, financial or accounting officer of the Company.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company, and who shall be reasonably acceptable to the
Trustee.
"Optional Redemption" has the meaning specified in Section
11.01.
<PAGE> 16
16
"Optional Redemption Ratio" has the meaning specified in
Section 13.07(b).
"Outstanding", when used with respect to Securities, means,
as of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except: (i) Securities theretofore canceled by
the Trustee or delivered to the Trustee for cancelation; (ii) Securities for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Company) in trust
or set aside and segregated in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such Securities; provided, that if such
Securities are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor satisfactory to the Trustee has
been made; and (iii) Securities which have been paid pursuant to Section 3.08,
converted into Capital Stock pursuant to Section 13.01, or in exchange for or in
lieu of which other Securities have been authenticated and delivered pursuant to
this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof satisfactory to it that such Securities
are held by a bona fide purchaser in whose hands such Securities are valid
obligations of the Company.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company.
"Payment Resumption Date" has the meaning set forth in Section
3.13.
"Person" means any individual, corporation, company, limited
liability company, partnership, joint venture, association, joint-stock company,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.07 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Preferred Securities" has the meaning specified in the first
recital to this instrument.
<PAGE> 17
17
"Property Trustee" has the meaning specified in the Recitals
to this instrument.
"Purchased Shares" has the meaning specified in Section
13.03(vi).
"Purchaser Stock Price" has the meaning specified in Section
13.07(b).
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Redemption Tax Opinion" means an opinion of a nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters that, as a result of a Tax Event, there is
more than an insubstantial risk that the Company would be precluded from
deducting the interest on the Securities for United States Federal income tax
purposes, even after the Trust was liquidated and the Securities were
distributed to the holders of the Preferred Securities.
"Reference Date" has the meaning specified in Section
13.03(iv).
"Reference Market Price" has the meaning specified in Section
13.07(b).
"Regular Record Date" has the meaning specified in Section
3.01.
"Relevant Price" has the meaning specified in Section
13.07(b).
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, any
assistant vice president, the treasurer, any assistant treasurer, any trust
officer or assistant trust officer, the controller or any assistant controller
or any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred
<PAGE> 18
18
because of his knowledge of and familiarity with the particular subject.
"Securities" has the meaning specified in the
Fifth Recital to this instrument.
"Securities Act" means the Securities Act of 1933.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.06.
"Senior Debt" means (i) the principal of, and premium and
interest, if any, on all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, (ii) all obligations to make payment pursuant to the terms
of financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to any of its subsidiaries, (d) Debt to any employee of
the Company and (e) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the Holders of the
Securities as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.
<PAGE> 19
19
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 3.08.
"Stated Maturity", when used with respect to any Security or
any installment of principal thereof or interest thereon, means the date
specified in such Security as the fixed date on which the principal, together
with any accrued and unpaid interest (including Compounded Interest), of such
Security or such installment of interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than
50% of the outstanding Voting Stock of which is owned, directly or indirectly,
by such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other than
a corporation) in which such Person, or one or more other Subsidiaries of such
Person or such Person and one or more other Subsidiaries thereof, directly or
indirectly, has at least a majority ownership and power to direct the policies,
management and affairs thereof.
"Tax Event" means the receipt by the Property Trustee of an
opinion of a nationally recognized independent tax counsel to the Company
experienced in such matters (a "Dissolution Tax Opinion") to the effect that, as
a result of (a) any amendment to or change (including any announced prospective
change (which shall not include a proposed change), provided that a Tax Event
shall not occur more than 90 days before the effective date of any such
prospective change) in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein, (b)
any judicial decision or official administrative pronouncement, ruling,
regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action"), (c) any amendment to or change in the administrative
position or interpretation of any Administrative Action or judicial decision
that differs from the theretofore generally accepted position, in each case, by
any legislative body, court, governmental agency or regulatory body,
irrespective of the manner in which such amendment or change is made known,
which amendment or change is effective or such Administrative Action or decision
is announced or (d) any current or future audit examination or proceeding, in
each case, on or after the date of original issuance of the Securities or the
issue date of the Preferred Securities issued by the Trust, there is more than
an insubstantial risk that (x) if the Securities are held by the Property
Trustee, (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States Federal income tax with respect to interest
<PAGE> 20
20
accrued or received on the Securities or subject to more than a de minimis
amount of other taxes, duties or other governmental charges as determined by
such counsel, or (ii) any portion of interest payable by the Company to the
Trust on the Securities is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes or (y) with respect to Securities which are no
longer held by the Property Trustee, any portion of interest payable by the
Company on the Securities is not, or within 90 days of the date of such opinion
will not be, deductible by the Company in whole or in part for United States
Federal income tax purposes.
"Trading Day" has the meaning specified in Section 13.07(b).
"Trust" has the meaning specified in the first recital to this
instrument.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred
Securities.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" of any Person means capital stock of such
Person which ordinarily has voting power for the election of directors (or
Persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
SECTION 1.02. Compliance Certificates and Opinions. Upon any
application or request by the Company to the Trustee to take any action under
any provision of this
<PAGE> 21
21
Indenture, the Company shall furnish to the Trustee such certificates and
opinions as may be required under the Trust Indenture Act or reasonably
requested by the Trustee in connection with such application or request. Each
such certificate or opinion shall be given in the form of an Officers'
Certificate, if to be given by an officer of the Company, or an Opinion of
Counsel, if to be given by counsel, and shall comply with the applicable
requirements of the Trust Indenture Act and any other applicable requirement set
forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the certificate
required by Section 10.04) shall include:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual,
he or she has made or caused to be made such examination or
investigation as is necessary to enable him or her to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Form of Documents Delivered to Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may
certify or give an opinion with respect to some matters and one or more other
such Persons as to other matters, and any such Person may certify or give an
opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise
<PAGE> 22
22
of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company stating
that the information with respect to such factual matters is in the possession
of the Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 1.04. Acts of Holders; Record Dates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given to or taken by Holders may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such Holders in person or by an agent duly appointed in writing; and, except
as herein otherwise expressly provided, such action shall become effective when
such instrument or instruments is or are delivered to the Trustee and, where it
is hereby expressly required, to the Company. Such instrument or instruments
(and the action embodied therein and evidenced thereby) are herein sometimes
referred to as the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture and (subject to
Section 6.01) conclusive in favor of the Trustee and the Company, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which the Trustee or the Company, as the case may be, deems
sufficient.
<PAGE> 23
23
(c) The Company may, except in the circumstances set forth in
clause (d) below, fix any day as the record date for the purpose of determining
the Holders of Outstanding Securities entitled to give, make or take any
request, demand, authorization, direction, notice, consent, waiver or other
action, or to vote on any action, authorized or permitted to be given or taken
by Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of any
such vote, prior to such vote, the record date for any such action or vote shall
be the 30th day (or, if later, the date of the most recent list of Holders
required to be provided pursuant to Section 7.01) prior to such first
solicitation or vote, as the case may be. With regard to any record date, only
the Holders on such date (or their duly designated proxies) shall be entitled to
give or take, or vote on, the relevant action. Provided, that unless such
consent shall have become effective by virtue of the requisite percentage having
been obtained prior to the date which is 90 days after such record date, any
such consent previously given shall automatically and without further action by
any Holder be canceled and of no further effect.
(d) The Trustee may set any day as a record date for the
purpose of determining the Holders of Outstanding Securities entitled to join in
the giving or making of (i) any notice of default, (ii) any declaration of
acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date; provided that no such
action shall be effective hereunder unless taken on or prior to the date set by
the Trustee by which any such determination shall be made (the "Expiration
Date") by Holders of the requisite principal amount of Outstanding Securities on
such record date. Nothing in this paragraph shall be construed to prevent the
Trustee from setting a new record date for any action for which a record date
has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be canceled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities on the date such action is taken. Promptly after any
record date is set pursuant to this paragraph, the Trustee, at the Company's
expense, shall cause notice of such record date, the proposed action by Holders
and the applicable Expiration Date to be given to
<PAGE> 24
24
the Company in writing and to each Holder of Securities in the manner set forth
in Section 1.06.
(e) The ownership of Securities shall be proved by the
Security Register.
(f) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
(g) Without limiting the foregoing, a Holder entitled
hereunder to give or take any such action with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security or by one or more duly appointed agents each of which who may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.
SECTION 1.05. Notices, Etc., to Trustee and the Company. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to:
Firstar Bank, National Association
Corporate Trust Services
425 Walnut Street
Sixth Floor
Cincinnati, Ohio 45202
Attention of: Keith A. Maurmeier
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and
<PAGE> 25
25
mailed, first-class postage prepaid, to the Company addressed to:
Chemed Corporation
2600 Chemed Center
255 E. Fifth Street
Cincinnati, Ohio 45202-4726
Attention of: Chief Financial Officer
SECTION 1.06. Notice to Holders; Waiver. Where this Indenture
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at such
Holder's address as it appears in the Security Register, not later than the
latest date (if any), and not earlier than the earliest date (if any),
prescribed for the giving of such notice. In any case where notice to Holders is
given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the
aforesaid manner shall be conclusively deemed to have been received by such
Holder whether or not actually received by such Holder. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service
or by reason of any other cause, it shall be impracticable to give such notice
by mail, then such notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with a provision of the Trust
Indenture Act that is required under such Act to be a part of and govern this
Indenture, the latter provision shall control. If any provision of this
Indenture modifies or excludes any provision of the Trust Indenture Act that may
be so modified or excluded, the latter provision shall be deemed to apply to
this Indenture as so modified or to be excluded, as the case may be.
<PAGE> 26
26
SECTION 1.08. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and
agreements in this Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 1.10. Separability Clause. In case any provision in
this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture
or in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, the holders of Senior Debt,
the holders of Preferred Securities (to the extent provided herein) and the
Holders of Securities, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
SECTION 1.12. GOVERNING LAW; JURISDICTION. THIS INDENTURE AND
THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE UNITED
STATES DISTRICT COURTS LOCATED IN THE STATE OF DELAWARE FOR ANY LAWSUITS, CLAIMS
OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREE NOT
TO COMMENCE ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING EXCEPT IN SUCH COURTS.
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO
THE LAYING OF VENUE OF ANY LAWSUIT, CLAIM, OR OTHER PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE COURTS OF THE STATE OF DELAWARE OR THE UNITED
STATES DISTRICT COURTS LOCATED IN THE STATE OF DELAWARE, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 1.13. Legal Holidays. In any case where any Interest
Payment Date, Redemption Date or Stated Maturity of any Security or the last
date on which a Holder has the right to convert his Securities shall not be a
<PAGE> 27
27
Business Day, then (notwithstanding any other provision of this Indenture or of
the Securities) payment of interest or principal or conversion of the Securities
need not be made on such date, but may be made on the next succeeding Business
Day (except that, with respect to any Redemption Date, if such Business Day is
in the next succeeding calendar year, such Redemption Date shall be the
immediately preceding Business Day) with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity or on
such last day for conversion, provided that no interest shall accrue for the
period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities and the
Trustee's certificates of authentication shall be substantially in the form of
Exhibit A which is hereby incorporated in and expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, agreements to which the Company is subject, if any,
or usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Company). The Company shall furnish any such legend not
contained in Exhibit A to the Trustee in writing. Each Security shall be dated
the date of its authentication. The terms and provisions of the Securities set
forth in Exhibit A are part of the terms of this Indenture and to the extent
applicable, the Company and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
The definitive Securities shall be typewritten or printed,
lithographed or engraved or produced by any combination of these methods on
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.02. Initial Issuance to Property Trustee. The
Securities initially issued to the Property Trustee of the Trust shall be in the
form of one or more individual certificates in definitive, fully registered form
without distribution coupons.
<PAGE> 28
28
SECTION 2.03. Provisions Required in Global Security. Any
Global Security issued hereunder shall bear a legend in substantially the
following form:
"THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITORY
TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY
BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO
CHEMED CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN."
SECTION 2.04. Issuance of Global Securities to Holders. The
Securities may be represented by one or more Global Securities registered in the
name of the Depositary or its nominee if, and only if, the Securities are
distributed to the Holders of the Trust Securities. Until such time, the
Securities shall be registered in the name of, and held by, the Property
Trustee. Securities distributed to Holders of book-entry Trust Securities shall
be distributed in the form of one or more Global Securities registered in the
name of the Depositary or its nominee, and deposited with the Security
Registrar, as custodian for such Depositary, or held by such Depositary for
credit by the Depositary to the respective accounts of the beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Securities distributed to Holders of Trust Securities other than book-entry
Trust Securities shall not be issued in the form of a Global Security or any
other form intended to facilitate book-entry trading in beneficial interests in
such Securities.
<PAGE> 29
29
ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal amount
of Securities that may be authenticated and delivered under this Indenture is
limited to the sum of $- except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Section 3.04, 3.05, 3.06, 3.07, 9.06, 11.08 or 13.02.
The Securities shall be known and designated as the
"Convertible Junior Subordinated Debentures Due 2030" of the Company. Their
Stated Maturity shall be March 15, 2030, and they shall bear interest equal to
$0.50 per each $27 principal amount, during the period from issuance of the
Securities to March 15, 2000, and they shall bear interest at the Applicable
Rate, from March 15, 2000 or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, as the case
may be, payable quarterly (subject to deferral as set forth herein), in arrears,
on March 15, June 15, September 15 and December 15 (each an "Interest Payment
Date") of each year, commencing March 15, 2000, until the principal thereof is
paid or made available for payment, and interest payable on an Interest Payment
Date shall be paid to the Person in whose name the Security is registered at the
close of business on the regular record date for such interest installment,
which shall be the close of business on the first of the month in which the
applicable Interest Payment Date occurs(the "Regular Record Date"). Interest
will compound quarterly and will accrue at the Applicable Rate on any interest
installment in arrears for more than one quarter or during an extension of an
interest payment period as set forth in Section 3.13 hereof.
Except for the interest payable on March 15, 2000, the amount
of interest payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months and except as provided in the following sentence,
the amount of interest payable for any period shorter than a full quarterly
period for which interest is computed, will be computed on the basis of the
actual number of days elapsed in such a 30-day month. In the event that any date
on which interest is payable on the Securities is not a Business Day, then
payment of interest payable on such date will be made on the next succeeding day
which is a Business Day (and without any interest or other payment in respect of
any such delay), with the same force and effect as if made on such date.
<PAGE> 30
30
If at any time (including upon the occurrence of a Tax Event)
while the Property Trustee is the Holder of all the Securities, the Trust or the
Property Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes) imposed
by the United States, or any other taxing authority, then, in any case, the
Company will pay as additional amounts ("Additional Sums") on the Securities
held by the Property Trustee, such additional amounts as shall be required so
that the net amounts received and retained by the Trust and the Property Trustee
after paying such taxes, duties, assessments or other governmental charges will
be equal to the amounts the Trust and the Property Trustee would have received
had no such taxes, duties, assessments or other governmental charges been
imposed.
The principal of and interest on the Securities shall be
payable at the office or agency of the Company in New York, New York maintained
for such purpose and at any other office or agency maintained by the Company for
such purpose in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts;
provided, however, that at any time that the Property Trustee is not the sole
holder of the Securities, payment of interest may, at the option of the Company,
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or by wire transfer.
The Securities shall be redeemable as provided in Article XI
hereof.
The Securities shall be subordinated in right of payment to
Senior Debt as provided in Article XII hereof.
The Securities shall be convertible as provided in Article
XIII hereof.
SECTION 3.02. Denominations. The Securities shall be issuable
only in registered form without coupons and only in denominations of $1,000 and
integral multiples thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
<PAGE> 31
31
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall manually authenticate and make available for
delivery such Securities as in this Indenture provided and not otherwise.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and make available for delivery, temporary
Securities which are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to Section
10.02, without charge to the Holder. Upon surrender for cancelation of any one
or more temporary Securities, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
<PAGE> 32
32
SECTION 3.05. Global Securities. (a) Each Global Security
issued under this Indenture shall be registered in the name of the Depositary
designated by the Company for such Global Security or a nominee thereof and
delivered to such Depositary or a nominee thereof or custodian therefor, and
each such Global Security shall constitute a single Security for all purposes of
this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary advises the Trustee in writing that
such Depositary is no longer willing or able to continue as a Depositary with
respect to such Global Security, and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a "clearing agency"
registered under the Exchange Act, at a time when the Depositary is required to
be so registered to act as such depositary, (ii) the Company in its sole
discretion determines that such Global Security shall be so exchangeable or
(iii) there shall have occurred and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Security Registrar for exchange or cancelation
as provided in this Article III. If any Global Security is to be exchanged for
other Securities or canceled in part, or if another Security is to be exchanged
in whole or in part for a beneficial interest in any Global Security, then
either (i) such Global Security shall be so surrendered for exchange or
cancelation as provided in this Article III or (ii) the principal amount thereof
shall be reduced or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other Security
to be so exchanged for a beneficial interest therein, as the case may be, by
means of an appropriate adjustment made on the records of the Security
Registrar, whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions, the Trustee shall, subject to Section 3.05(b) and as
otherwise provided in this Article III, authenticate and make available for
delivery any Securities issuable in exchange for such Global Security (or any
portion thereof) in
<PAGE> 33
33
accordance with the instructions of the Depositary. The Trustee shall not be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such instructions.
(d) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Security Registrar shall have any
liability in respect of any transfers effected by the Depositary.
(e) The rights of the beneficial interests in a Global
Security shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such owners and the Depositary
and/or its Agent Members.
SECTION 3.06. Registration, Transfer and Exchange Generally;
Certain Transfers and Exchanges. (a) The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to Section
10.02 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to Section 10.02 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, Securities may be exchanged for
other Securities of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be required by this
Indenture, upon surrender of the Securities to be exchanged
<PAGE> 34
34
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, the Securities which the Holder making the exchange is
entitled to receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 3.05, 9.06, 11.09 or 13.01 not
involving any transfer.
Neither the Company nor the Trustee shall be required (i) in
the case of a partial redemption of the Securities, to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.04 and ending at the close
of business on the day of such mailing or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen
Securities. If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security
<PAGE> 35
35
or indemnity as may be required by them to save each of them and any agent of
either of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and deliver, in lieu of
any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder,
<PAGE> 36
36
and such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date (as defined below) for the payment of
such Defaulted Interest, which shall be fixed in the following manner.
The Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security and the date of
the proposed payment, and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date (the "Special Record Date") for the payment of such
Defaulted Interest which shall be not more than 15 days and not less
than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage
prepaid, to each Holder at his address as it appears in the Security
Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and, if so
listed, upon such notice as may be required by such exchange (or by the
Trustee if the Securities are not listed), if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
clause, such
<PAGE> 37
37
manner of payment shall be deemed practicable by the Trustee provided
that any such payment will be made in coin or currency of the United
States of America which at the time of payment is a legal tender for
payment of public and private debt.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue (including in each such case Compounded
Interest), which were carried by such other Security.
In the case of any Security which is converted after any
Regular Record Date and on or prior to the next succeeding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date),
interest whose Stated Maturity is on such Interest Payment Date shall be payable
on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security that is converted prior to any Regular Record Date, interest
whose Stated Maturity is after the date of conversion of such Security shall not
be payable, and the Company shall not make nor be required to make any other
payment, adjustment or allowance with respect to accrued but unpaid interest
(including Additional Payments) on the Securities being converted, which shall
be deemed to be paid in full.
SECTION 3.09. Persons Deemed Owners. The Company, the Trustee
and any agent of the Company or the Trustee may treat the Person in whose name
any Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.08) interest on such
Security and for all other purposes whatsoever, whether or not such Security be
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. No holder of any
beneficial interest in any Global Security held on its behalf by a Depositary
shall have any rights under this Indenture with respect to such Global Security,
and such Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company or the Trustee from giving
<PAGE> 38
38
effect to any written certification, proxy, or other authorization furnished by
a Depositary or impair, as between the Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary (or its nominee) as Holder of any Security.
SECTION 3.10. Cancelation. All Securities surrendered for
payment, redemption, registration of transfer or exchange or conversion shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancelation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. No Securities
shall be authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section, except as expressly permitted by this Indenture. All
canceled Securities held by the Trustee shall be disposed of as directed by a
Company Order; provided, however, that the Trustee shall not be required to
destroy the certificates representing such canceled Securities.
SECTION 3.11. Right of Set Off. Notwithstanding anything to
the contrary in this Indenture, the Company shall have the right to set off any
payment it is otherwise required to make hereunder to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, a
payment under the Guarantee.
SECTION 3.12. CUSIP Numbers. The Company in issuing the
Securities may use "CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to
Holders; provided, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
SECTION 3.13. Extension of Interest Payment Period; Notice of
Extension. (a) So long as no Event of Default has occurred and is continuing,
the Company shall have the right, at any time during the term of this Security
after March 15, 2000, from time to time to defer payments of interest by
extending for successive periods not exceeding 20 consecutive quarters for each
such period (a "Deferral Period"); provided that no Deferral Period may extend
beyond
<PAGE> 39
39
March 15, 2030. To the extent permitted by applicable law, interest, the payment
of which has been deferred because of the extension of the interest payment
period pursuant to this Section 3.13, will bear interest thereon at the
Applicable Rate compounded quarterly for each quarter of the Deferral Period
("Compounded Interest"). On the applicable Payment Resumption Date, the Company
shall pay all interest then accrued and unpaid on the Securities, including any
Compounded Interest that shall be payable to the Holders of the Securities in
whose names the Securities are registered in the Security Register on the
Regular Record Date fixed for such Payment Resumption Date. A Deferral Period
shall terminate upon the payment by the Company of all interest then accrued and
unpaid on the Securities (together with interest thereon accrued at an annual
rate equal to the Applicable Rate, compounded quarterly, to the extent permitted
by applicable law). Before the termination of any Deferral Period, the Company
may further extend such period as provided in paragraph (b) of this Section
3.13, provided that such period together with all such further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond the Stated
Maturity of the Securities. Upon the termination of any Deferral Period, and
subject to the foregoing requirements, the Company may elect to begin a new
Deferral Period. No interest shall be due and payable during a Deferral Period
except on the Payment Resumption Date as determined pursuant to paragraph (b) of
this Section 3.13. There is no limitation on the number of times that the
Company may elect to begin a Deferral Period.
(b) The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend a Deferral Period. On or prior to the Regular Record Date immediately
preceding the Interest Payment Date on which the Company elects to pay all
interest then accrued and unpaid on the Securities, including Compound Interest,
(the "Payment Resumption Date") the Company shall give the Holder of the
Security and the Trustee written notice that the Deferral Period will end on
such Payment Resumption Date. Notwithstanding the provision of such notice, the
Company may elect to further extend the Deferral Period, subject to the
limitations set forth in Section 3.13(a), by providing the Holder of the
Security and the Trustee with a new Deferral Notice not less than three Business
Days prior to the Regular Record Date immediately preceding the previously
scheduled Payment Resumption Date. The Company may elect to pay all interest
then accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established
<PAGE> 40
40
Payment Resumption Date provided that the Company gives the Holder of the
Security and the Trustee a new Deferral Notice setting forth the revised Payment
Resumption Date at least three Business Days prior to the Regular Record Date
for such revised Payment Resumption Date.
(c) The quarter in which any Deferral Notice is given pursuant
to paragraph (b) hereof shall be counted as one of the 20 quarters permitted in
the maximum Deferral Period permitted under paragraph (a) hereof.
SECTION 3.14. Paying Agent, Security Registrar and Conversion
Agent. The Trustee will initially act as Paying Agent, Security Registrar and
Conversion Agent. The Company may change any Paying Agent, Security Registrar,
co-registrar or Conversion Agent without prior notice. The Company or any of its
Affiliates may act in any such capacity.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect (except as to any surviving rights
of conversion, registration of transfer or exchange of Securities herein
expressly provided for), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities which have been
destroyed, lost or stolen and which have been replaced or paid
as provided in Section 3.06 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as
provided in Section 10.03) have been delivered to the Trustee
for cancelation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancelation
(i) have become due and payable, or
<PAGE> 41
41
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by the
Trustee in the name, and at the expense, of the
Company
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and interest (including Compounded Interest) to the
date of such deposit (in the case of Securities which have
become due and payable) or to the Stated Maturity or
Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the
provisions of the last paragraph of Section 10.03, all money deposited with the
Trustee pursuant to Section 4.01 shall be held in trust and applied by it, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Trustee. All moneys deposited with the Trustee pursuant
to Section 4.01 (and held by it or any Paying Agent) for the payment of
<PAGE> 42
42
Securities subsequently converted shall be returned to the Company upon Company
Request.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default," wherever
used herein, means any one of the following events that has occurred and is
continuing (whatever the reason for such Event of Default and whether it shall
be occasioned by the provisions of Article XI or be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment, decree or order of
any court or any order, rule or regulation of any administrative or governmental
body):
(1) default in the payment of any interest upon any Security,
including any Additional Payments, when it becomes due and payable, and
continuance of such default for a period of 30 days (subject to the
deferral of any due date in the case of a Deferral Period); or
(2) default in the payment of the principal of any Security
when due, whether at its Maturity, upon redemption, by declaration of
acceleration or otherwise; or
(3) default in the observation or performance, in any material
respect, of any covenant of the Company in this Indenture (other than a
covenant a default in the performance of which or the breach of which
is elsewhere in this Section specifically dealt with), and continuance
of such default for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
outstanding principal amount of the Securities a written notice
specifying such default and requiring it to be remedied; or
(4) failure by the Company to issue and deliver Capital Stock
upon an election to convert the Securities into Capital Stock; or
(5) the entry or a decree or order by a court having
jurisdiction in the premises adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the
<PAGE> 43
43
Company under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or appointing a receiver,
liquidator, assignee, trustee, sequestrator (or other similar official)
of the Company or of any substantial part of its property or ordering
the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by the Company in furtherance of any such action; or
(7) the voluntary or involuntary dissolution, winding up or
termination of the Trust, except in connection with (i) the
distribution of Securities to holders of Preferred Securities in
liquidation or redemption of their interests in the Trust, (ii) the
redemption of all of the outstanding Preferred Securities of the Trust
or (iii) certain mergers, consolidations or amalgamations, each as
permitted by the Declaration.
SECTION 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every
such case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of all the Outstanding
Securities and any other amounts payable hereunder (including any Additional
Payments) to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders); provided that, if the Property
Trustee is the sole Holder of the Securities and if upon an Event of Default,
the Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities fail to declare the principal of all the
<PAGE> 44
44
Securities to be immediately due and payable, the holders of at least 25% in
aggregate liquidation amount of Preferred Securities then outstanding shall have
such right by a notice in writing to the Company and the Trustee; and upon any
such declaration such principal and all accrued interest shall become
immediately due and payable. Upon any such declaration such principal amount (or
specified amount) of and the accrued interest (including any Additional
Payments) on all the Securities of such series shall then become immediately due
and payable; provided that the payment of principal and interest on such
Securities (including Additional Payments) shall remain subordinated to the
extent provided in Article XII.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as provided in this Article hereinafter, the Holders of
a majority in aggregate principal amount of the Outstanding Securities, by
written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest (including any Compounded
Interest) on all Securities,
(B) the principal of any Securities which have become
due otherwise than by such declaration of acceleration and
interest thereon at the rate borne by the Securities, and
(C) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
The Company is required to file annually with the Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under this Indenture.
<PAGE> 45
45
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for
Enforcement by Trustee. The Company covenants that if
(1) default is made in the payment of any interest (including
any Compounded Interest) on any Security when such interest becomes due
and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of any
Security at the Stated Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest (including any Additional Payments) and,
to the extent that payment thereof shall be legally enforceable, interest on any
overdue principal and on any overdue interest (including any Additional Sums),
at the rate borne by the Securities, and, in addition thereto, all amounts owing
to the Trustee under Section 6.07.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of any
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under the Trust Indenture Act in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay to
the Trustee any
<PAGE> 46
46
amount due it and any predecessor Trustee under Section 6.07.
No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize
the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing to the Trustee and any
predecessor Trustee under Section 6.07, be for the ratable benefit of the
Holders of the Securities in respect of which such judgment has been recovered.
SECTION 5.06. Application of Money Collected. Subject to
Article XII, any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest (including any Additional Payments), upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest (including any Additional Payments) on the
Securities in respect of which or for the benefit of which such money
has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for
principal and interest (including any Compounded Interest),
respectively; and
THIRD: The balance, if any, to the Company.
SECTION 5.07. Limitation on Suits. Subject to Section 5.08, no
Holder of any Security shall have any right to institute any proceeding,
judicial or otherwise, with
<PAGE> 47
47
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities shall have made written request to
the Trustee to institute proceedings in respect of such Event of
Default, in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all Holders.
SECTION 5.08. Unconditional Right of Holders to Receive
Principal and Interest and to Convert. Notwithstanding any other provision in
this Indenture, the Holder of any Security shall have the right, which is
absolute and unconditional, to receive payment of the principal of and (subject
to Section 3.08) interest (including any Additional Payments) on such Security
on the respective Stated Maturities expressed in such Security (or, in the case
of redemption, on the Redemption Date) and to convert such Security in
accordance with Article XIII and to institute suit for the enforcement of any
such payment and right to convert, and such rights shall not be impaired without
the consent of such Holder. If the Property Trustee is the sole Holder of the
Securities, any holder of the Preferred Securities shall have the right to
institute suit on behalf
<PAGE> 48
48
of the Trust for the enforcement of any such payment and right to convert.
SECTION 5.09. Restoration of Rights and Remedies. If the
Trustee or any Holder has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders shall be restored severally
and respectively to their former positions hereunder and thereafter all rights
and remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as
otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities in the last paragraph of Section 3.07, no
right or remedy herein conferred upon or reserved to the Trustee or to the
Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or
omission of the Trustee or of any Holder of any Security to exercise any right
or remedy accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an acquiescence
therein. Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities shall have the right to direct
the time, method and place of conducting any proceeding for any remedy available
to the Trustee or exercising any trust or power conferred on the Trustee;
provided, that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture; and
<PAGE> 49
49
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults. Subject to Section 9.02
hereof, the Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any, or
interest (including any Additional Payments) on any Security (unless
such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by
acceleration has been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, in the
manner and to the extent provided in the Trust Indenture Act; provided, that
neither this Section nor the Trust Indenture Act shall be deemed to authorize
any court to require such an undertaking or to make such an assessment in any
suit instituted by the Company or the Trustee or in any suit for the enforcement
of the right to receive the principal of and interest (including any Additional
Payments) on any Security or to convert any Security in accordance with Article
XIII.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the
<PAGE> 50
50
Company (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as though no such law
had been enacted.
SECTION 5.16. Enforcement by Holders of Preferred Securities.
Notwithstanding anything to the contrary contained herein, if an Event of
Default has occurred and is continuing and such event is attributable to the
failure of the Company to pay interest or principal on the Securities on the
date such interest or principal is otherwise payable, the Company acknowledges
that, in such event, a holder of Preferred Securities may institute a legal
proceeding directly for enforcement of payment to such Holder of the principal
of or interest on the Debentures having a principal amount equal to the
aggregate liquidation amount of the Preferred Securities of such Holder (a
"Direct Action") on or after the respective due date specified in the
Securities. The Company may not amend this Indenture to remove the foregoing
right to bring a Direct Action without the prior written consent of all the
holders of Preferred Securities. Notwithstanding any payment made to such holder
of Preferred Securities by the Company in connection with a Direct Action, the
Company shall remain obligated to pay the principal of and interest on the
Securities (including Additional Payments, if any) held by the Trust or the
Property Trustee and the Company shall be subrogated to the rights of the holder
of such Preferred Securities with respect to payments on the Preferred
Securities to the extent of any payments made by the Company to such holder in
any Direct Action. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the Holders of the Securities.
ARTICLE VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except
during the continuance of an Event of Default, the Trustee undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent
<PAGE> 51
51
person would exercise or use under the circumstances in the conduct of his own
affairs.
(c) Notwithstanding the foregoing, (i) the duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act
and (ii) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. The Trustee shall give the
Holders notice of any default hereunder as and to the extent provided by the
Trust Indenture Act; provided, however, that in the case of any default of the
character specified in Section 5.01(3), no such notice to Holders shall be given
until at least 30 days after the occurrence thereof. For the purpose of this
Section, the term "default" means any event which is, or after notice or lapse
of time or both would become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the
provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be protected
in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically
<PAGE> 52
52
prescribed) may, in the absence of bad faith on its part, rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel of its choice and the
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to reasonable
examination of the books, records and premises of the Company,
personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder; and
(h) the Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without
negligence or willful misconduct, and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of
Securities. The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their
<PAGE> 53
53
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of the Securities or the
proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying
Agent, any Security Registrar or any other agent of the Company, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.08 and 6.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Paying Agent, Security
Registrar, or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee
in trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company
agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time
agree in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
fees, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
or liability in connection with the exercise or performance of any of
its powers or duties hereunder.
<PAGE> 54
54
SECTION 6.08. Disqualification; Conflicting Interests. If the
Trustee has or shall acquire a conflicting interest within the meaning of the
Trust Indenture Act, the Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to the provisions of,
the Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall
at all times be a Trustee hereunder which shall be a Person that is eligible
pursuant to the Trust Indenture Act to act as such and has a combined capital
and surplus of at least $50,000,000 and has its Corporate Trust Office in
Cincinnati, Ohio. If such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
Neither the Company nor any Person directly or indirectly controlling,
controlled by or under common control with the Company shall serve as Trustee
hereunder. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
SECTION 6.10. Resignation and Removal; Appointment of Successor. (a)
No resignation or removal of the Trustee and no appointment of a successor
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
a majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the
<PAGE> 55
55
Company or by any Holder who has been a bona fide Holder of a Security for
at least six months; or
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder; or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, (i) the Company may remove the Trustee, or (ii) subject
to Section 5.14, any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee. If,
within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities
delivered to the Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and supersede the successor Trustee appointed by the Company.
If no successor Trustee shall have been so appointed by the Company or the
Holders and accepted appointment in the manner hereinafter provided, any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give written notice of each resignation and
each removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 1.06. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
<PAGE> 56
56
SECTION 6.11. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; provided, that on request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments required to more fully and
certainly vest in and confirm to such successor Trustee all such rights, powers
and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Trustee may be merged or converted or with
which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any Person
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder; provided such Person
shall be otherwise qualified and eligible under this Article, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto. In case any Securities shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion or
consolidation to such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company. If
and when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
<PAGE> 57
57
ARTICLE VII
Holders' Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not later than January 15 and July 15 in each
year, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of a date not more than 15 days
prior to the delivery thereof; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days prior
to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to
Holders. (a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) Within 60 days after March 15
of each year, commencing March 15, 2000, the Trustee shall transmit by
first-class mail to Holders such reports concerning the Trustee and its actions
under this Indenture as may be required by Section 313(a) of the Trust Indenture
Act in the manner provided pursuant
<PAGE> 58
58
thereto. The Trustee shall also comply with the other requirements of Section
313 of the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
SECTION 7.04. Reports by Company. The Company shall file with the
Trustee and the Commission, and transmit to Holders, such information, documents
and other reports, and such summaries thereof, as may be required pursuant to
the Trust Indenture Act at the times and in the manner provided pursuant to such
Act; provided, that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 7.05. Tax Reporting. The Company shall provide to the
Trustee on a timely basis such information as the Trustee requires to enable the
Trustee to prepare and file any form required to be submitted by the Company
with the Internal Revenue Service and the Holders relating to original issue
discount, including, without limitation, Form 1099-0ID or any successor form.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge with or into the
Company or convey, transfer
<PAGE> 59
59
or lease its properties and assets substantially as an
entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge with or into
another Person or convey, transfer or lease all or substantially all of
its properties and assets on a consolidated basis to any Person, the
Person formed by such consolidation or into which the Company is merged or
the Person which acquires by conveyance, transfer or lease, all or
substantially all of the properties and assets of the Company on a
consolidated basis shall be a corporation, limited liability company,
partnership or trust, shall be organized and validly existing under the
laws of the United States of America, any State thereof or the District of
Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form reasonably satisfactory to
the Trustee, the due and punctual payment of the principal of and interest
(including any Additional Payments) on all the Securities and the
performance or observance of every covenant of this Indenture on the part
of the Company to be performed or observed and shall have provided for
conversion rights in accordance with Article XIII;
(2) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Company or a
Subsidiary as a result of such transaction as having been incurred by the
Company or such Subsidiary at the time of such trans action, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing;
(3) if at the time any Preferred Securities are outstanding, such
consolidation or merger or conveyance, transfer or lease of assets of the
Company is permitted under, and does not give rise to any breach or
violation of, the Declaration or the Guarantee; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture, comply with this Article and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
<PAGE> 60
60
SECTION 8.02. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer or lease of all or substantially all the properties and assets of the
Company on a consolidated basis in accordance with Section 8.01, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(3) to make provision with respect to the conversion rights of
Holders pursuant to the requirements of Article XIII; or
(4) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to
make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions
of this Indenture; provided, that such action pursuant to this clause (4)
shall not adversely affect the interests of the Holders of the Securities
or, so long as any of the Preferred Securities shall remain outstanding,
the holders of the Preferred Securities; or
<PAGE> 61
61
(5) to comply with the requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities, by Act of said Holders delivered to the Company and
the Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
affected thereby,
(1) extend the Stated Maturity of the principal of, or any
installment of interest (including any Additional Payments) on, any
Security, or reduce the principal amount thereof, or reduce the rate or
extend the time for payment of interest thereon, or reduce any premium
payable upon the redemption thereof, or change the place of payment where,
or the coin or currency in which, any Security or interest thereon is
payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or adversely affect the
right to convert any Security as provided in Article XIII (except as
permitted by Section 9.01(3)), or modify the provisions of this Indenture
with respect to the subordination of the Securities in a manner adverse
to the Holders,
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences provided for in this
Indenture, or
(3) modify any of the provisions of this Section or Section 5.13,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
<PAGE> 62
62
Notwithstanding anything to the contrary in this Indenture or the
Declaration, if the Property Trustee is the sole holder of the Securities, so
long as any of the Preferred Securities remains outstanding, no amendment shall
be made that adversely affects the holders of such Preferred Securities, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of the percentage of the aggregate liquidation
amount of such Preferred Securities then outstanding which is at least equal to
the percentage of aggregate stated liquidation amount of the Outstanding
Securities as shall be required under this Indenture to effect any such
amendment, termination or waiver.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in relying upon, an Opinion of Counsel stating
that the execution of such supplemental indenture is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture which affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a
part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be bound
thereby. No such supplemental indenture shall directly or indirectly modify the
provisions of Article XII in any manner which might terminate or impair the
rights of the Senior Debt pursuant to such subordination provisions.
SECTION 9.05. Conformity with Trust Indenture Act. Every
supplemental indenture executed pursuant to this Article shall conform to the
requirements of the Trust Indenture Act.
<PAGE> 63
63
SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Trustee,
bear a notation in form approved by the Trustee as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
so modified as to conform, in the opinion of the Trustee and the Company, to any
such supplemental indenture, may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE X
Covenants; Representations and Warranties
SECTION 10.01. Payment of Principal and Interest. The Company will
duly and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in the United States an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer, exchange or conversion, and where notices and demands
to or upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in the United States) where the Securities may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an office
or agency in the United States for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
<PAGE> 64
64
SECTION 10.03. Money for Security Payments to Be Held in Trust. If
the Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure to so act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the continuance of any
default by the Company (or any other obligor upon the Securities) in the making
of any payment in respect of the Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of or interest on
any Security and remaining unclaimed for two years after such principal or
interest has become due and payable, shall be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of any such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and all lia-
<PAGE> 65
65
bility of the Trustee or such Paying Agent with respect to such trust money, and
all liability of the Company as trust ee thereof, shall thereupon cease.
SECTION 10.04. Statement by Officers as to Default. The Company will
deliver to the Trustee, within 120 days after the end of each fiscal year of the
Company ending after the date hereof, an Officers' Certificate, stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions, covenants and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Company shall be in
default, specifying all such defaults and the nature and status thereof of which
they may have knowledge.
SECTION 10.05. Limitation on Dividends; Transactions with
Affiliates; Covenants as to the Trust. (a) If at such time (x) there shall have
occurred an Event of Default, (y) the Company shall be in default with respect
to its payment of any obligations under the Guarantee or (z) the Company shall
have given notice of its election to begin a Deferral Period as provided herein
and shall not have rescinded such notice, or such Deferral Period shall be
continuing, the Company covenants that the Company shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock) other than stock dividends which consist of
stock of the same class as that on which the dividends are being paid, (ii) make
any payment of principal, interest or premium, on or repay or repurchase or
redeem any debt securities of the Company that rank pari passu with or junior in
interest to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu with or junior in interest to the
Securities (in each case, other than (A) dividends or distributions in Capital
Stock, (B) any declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(C) payments under the Guarantee, (D) purchases or acquisitions of shares of the
Capital Stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plan or any other contractual obligation
of the Company (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Company's capital stock or the exchange or conversion of
<PAGE> 66
66
one class or series of the Company's capital stock for another class or series
of the Company's capital stock or (F) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
(b) The Company also covenants and agrees (i) that it shall directly
or indirectly maintain 100% ownership of the Common Securities of the Trust;
provided, however, that any permitted successor of the Company hereunder may
succeed to the Company's ownership of such Common Securities and (ii) that it
shall use its reasonable efforts, consistent with the terms and provisions of
the Declaration, to cause the Trust (x) to remain a statutory business trust,
except in connection with the distribution of the Securities to the holders of
Trust Securities in liquidation of the Trust, the redemption of all of the Trust
Securities of the Trust, or certain mergers, consolidations or amalgamations,
each as permitted by the Declaration, and (y) to otherwise continue to be
classified as a grantor trust for United States Federal income tax purposes.
SECTION 10.06. Payment of Expenses of the Trust. In connection with
the offering, sale and issuance of the Securities to the Property Trustee in
connection with the sale of the Trust Securities by the Trust, the Company
shall:
(a) pay for all costs, fees and expenses relating to the exchange
and issuance of the Securities, including compensation of the Trustee
under the Indenture in accordance with the provisions of Section 6.07 of
the Indenture;
(b) be responsible for and pay for all debts and obligations (other
than with respect to the Trust Securities) of the Trust, pay for all costs
and expenses of the Trust (including, but not limited to, costs and
expenses relating to the organization of the Trust, the offering, sale and
issuance of the Trust Securities (including commissions to the
underwriters in connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs and expenses relating
to the operation of the Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses
incurred in connection with the
<PAGE> 67
67
acquisition, financing, and disposition of Trust assets); and
(c) pay any and all taxes (other than United States withholding
taxes attributable to the Trust or its assets) and all liabilities, costs
and expenses with respect to such taxes of the Trust.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Optional Redemption. The Company shall have the right
to redeem the Securities (an "Optional Redemption") in whole or in part, at any
time or from time to time on or after March 15, 2003, at a Redemption Price
equal to $27.27 per $27 principal amount of the Securities to be redeemed plus
any accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before March 15, 2004, and thereafter at $27
per $27 principal amount of the Securities plus, in each case, any accrued and
unpaid interest, including Additional Payments, if any, to the Redemption Date.
SECTION 11.02. Tax Event Redemption. (a) If a Tax Event has occurred
and is continuing and:
(1) the Company has received a Redemption Tax Opinion; or
(2) the Issuer Trustees shall have been informed by nationally
recognized independent tax counsel (reasonably acceptable to the Issuer
Trustees) experienced in such matters that a No Recognition Opinion cannot
be delivered,
then the Company shall have the right upon not less than 20 days, nor more than
60 days, notice to the Holders of the Securities to redeem the Securities in
whole, but not in part, for cash at $27.27 per $27 principal amount of the
Securities plus accrued and unpaid interest, including Additional Payments, if
any, to the Redemption Date, within 90 days following the occurrence of such Tax
Event (the "90 Day Period"); provided, however, that if, at the time there is
available to the Company or the Trust the opportunity to eliminate, within the
90 Day Period, the Tax Event by taking some ministerial action, including, but
not limited to, filing a form or making an election, or pursuing some other
similar reasonable measure which, in the sole judgment of the Company, will have
no adverse effect on the
<PAGE> 68
68
Company, the Trust or the Holders of the Preferred Securities and will involve
no material cost, then the Company or the Trust shall pursue such ministerial
action or other measure in lieu of redemption; and provided further that the
Company shall have no right to redeem the Securities while the Trust is pursuing
any ministerial action or other similar measure pursuant to its obligations
under the Declaration.
(b) If the Company opts not to redeem the Securities pursuant to
this Section 11.02, the Company shall be required to pay Additional Sums in
respect of the Securities pursuant to Section 3.01 for so long as (i) a Tax
Event has occurred and is continuing and (ii) the Property Trustee is the sole
Holder of the Securities.
SECTION 11.03. Selection by Trustee of Securities to Be Redeemed. If
less than all the Securities are to be redeemed (unless such redemption affects
only a single Security), the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee by
such method as the Trustee shall deem fair and appropriate, from the Outstanding
Securities not previously called for redemption. Such selection method may
provide for the selection for redemption of portions (equal to $27 or any
integral multiple thereof) of the principal amount of the Securities.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption as aforesaid and, in case of any Securities
selected for partial redemption as aforesaid, the principal amount thereof to be
redeemed.
The provisions of the two preceding paragraphs shall not apply with
respect to any redemption affecting only a single Security, whether such
Security is to be redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal amount of the
Security shall be in an authorized denomination (which shall not be less than
the minimum authorized denomination) for such Security.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be
given by first-class mail, postage
<PAGE> 69
69
prepaid, mailed not less than 30 (or, in the case of a redemption pursuant to
Section 11.02 hereof, 20) nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at such Holder's address appearing in
the Security Register.
All notices of redemption given pursuant to this Article XI shall
identify the Securities to be redeemed (including, if relevant, CUSIP or ISIN
number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date,
(4) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(5) the date on which the right to convert the Securities to be
redeemed will terminate and the places where such Securities may be
surrendered for conversion.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.05. Deposit of Redemption Price. Prior to 12:00 noon on
any Redemption Date, the Company shall deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.03) an amount of money sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date.
If any Security called for redemption is converted, any money
deposited with the Trustee or with any Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.08) be paid to the Company upon
Company Request
<PAGE> 70
70
or, if then held by the Company, shall be discharged from such trust.
SECTION 11.06. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued interest) such
Securities shall cease to bear interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security shall be paid by the
Company at the Redemption Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant Record
Dates according to the terms and the provisions of Section 3.08.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate borne by the Security.
SECTION 11.07. Securities Redeemed in Part. (a) In the event of any
redemption in part, the Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the date of the mailing of a notice of redemption of
Securities selected for redemption and ending at the close of business on the
day of such mailing and (ii) to register the transfer of or exchange any
Securities so selected for redemption, in whole or in part, except for the
unredeemed portion of any Securities being redeemed in part.
(b) If a partial redemption of the Securities would result in the
delisting of the Preferred Securities issued by the Trust from any national
securities exchange or other organization on which the Preferred Securities are
listed, the Company shall not be permitted to effect such partial redemption and
may only redeem the Securities in whole.
(c) Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee
<PAGE> 71
71
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder, in aggregate principal amount equal to
and in exchange for the unredeemed portion of the principal of the Security so
surrendered. If a Global Security is surrendered, such new Security will
(subject to Section 3.06) also be a new Global Security.
ARTICLE XII
Subordination of Securities
SECTION 12.01. Agreement to Subordinate. The Company covenants and
agrees, and each Holder of Securities by such Holder's acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article XII; and each Holder of a Security, whether upon
original issue or upon transfer or assignment thereof, accepts and agrees to be
bound by such provisions. The payment by the Company of the principal of,
premium, if any, and interest (including Additional Payments) on all Securities
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and junior in right of payment to the prior payment in full of
all Senior Debt, whether outstanding at the date of this Indenture or thereafter
incurred; provided, however, that no provision of this Article XII shall prevent
the occurrence of any default or Event of Default hereunder.
SECTION 12.02. Default on Senior Debt. In the event and during the
continuation of any default by the Company in the payment of principal, premium,
interest or any other payment due on any Senior Debt continuing beyond the
period of grace, if any, specified in the instrument evidencing such Senior
Debt, unless and until such default shall have been cured or waived or shall
have ceased to exist, and in the event that the maturity of any Senior Debt has
been accelerated because of a default, then no payment shall be made by the
Company with respect to the principal of (including redemption payments),
premium, if any, or interest on the Securities.
In the event that, notwithstanding the foregoing, any payment shall
be received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 12.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior Debt
or their respective representatives, or to the trustee or trustees under any
indenture pursuant to which any of such Senior Debt may have been issued, as
<PAGE> 72
72
their respective interests may appear, but only to the extent that the holders
of the Senior Debt (or their representative or representatives or a trustee)
notify the Trustee in writing within 90 days of such payment of the amounts then
due and owing on the Senior Debt and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Senior Debt.
SECTION 12.03. Liquidation; Dissolution; Bankruptcy. Upon any
payment by the Company or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution or winding up or liquidation or reorganization of the Company,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts (including principal, premium, if any, and
interest) due or to become due upon all Senior Debt shall first be paid in full,
or payment thereof provided for in money in accordance with its terms, before
any payment is made on account of the principal (and premium, if any) or
interest on the Securities; and upon any such dissolution or winding up or
liquidation or reorganization, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the Holders of the Securities or the Trustee would be
entitled, except for the provisions of this Article XII, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Debt (pro rata to such holders on the basis of
the respective amounts of Senior Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior Debt may have been issued, as their respective interests may appear, to
the extent necessary to pay such Senior Debt in full, in money or money's worth,
after giving effect to any concur rent payment or distribution to or for the
holders of such Senior Debt, before any payment or distribution is made to the
Holders of Securities or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing shall be received by the
Trustee or the Holders of the Securities before all Senior Debt is paid in full,
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 holders of Senior Debt or their
<PAGE> 73
73
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Debt may have
been issued, and their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior Debt remaining unpaid to
the extent necessary to pay such Senior Debt in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the holders of such Senior Debt.
For purposes of this Article XII, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjust ment, the
payment of which is subordinated at least to the extent provided in this Article
XII with respect to the Securities to the payment of all Senior Debt which may
at the time be outstanding; provided that (i) such Senior Debt is assumed by the
new corporation, if any, resulting from any such reorganization or readjustment,
and (ii) the rights of the holders of such Senior Debt are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company with or into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer or lease of all or substantially all its properties and
assets on a consolidated basis to another Person upon the terms and conditions
provided for in Article VIII hereof shall not be deemed a dissolution, winding
up, liquidation or reorganization for the purposes of this Section 12.03 if such
other Person shall, as a part of such consolidation, merger, conveyance,
transfer or lease, comply with the conditions stated in Article VIII hereof.
Nothing in Section 12.02 or in this Section 12.03 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.07 hereof.
SECTION 12.04. Subrogation. Subject to the payment in full of all
Senior Debt, the rights of the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Debt to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Debt until the principal of (and premium, if any)
and interest on the Securities shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of such Senior
Debt of any cash, property or securities to which the Holders of the Securities
or the Trustee would be entitled except for the provisions of this Article XII,
and no payment pursuant to the provisions of this Article XII, to or for the
benefit of the holders of
<PAGE> 74
74
such Senior Debt by Holders of the Securities or the Trustee, shall, as between
the Company, its creditors other than holders of Senior Debt, and the Holders of
the Securities, be deemed to be a payment by the Company to or on account of
such Senior Debt. It is understood that the provisions of this Article XII are
and are intended solely for the purposes of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of such Senior Debt
on the other hand.
Nothing contained in this Article XII or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company, as the
case may be, other than the holders of Senior Debt, nor shall anything herein or
therein prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XII of the holders
of such Senior Debt in respect of cash, property or securities of the Company,
as the case may be, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred
to in this Article XII, the Trustee, subject to the provisions of Section 6.03,
and the Holders of the Securities shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Securities, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other indebtedness of the Company, as the case may be, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article XII.
SECTION 12.05. Trustee to Effectuate Subordination. Each Holder of
Securities by such Holder's acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this
<PAGE> 75
75
Article XII and appoints the Trustee as such Holder's attorney-in-fact for any
and all such purposes.
SECTION 12.06. Notice by the Company. The Company shall give prompt
written notice to a Responsible Officer of the Trustee of any fact known to the
Company which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Securities pursuant to the provisions of this Article
XII. Notwithstanding the provisions of this Article XII or any other provision
of this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of monies
to or by the Trustee in respect of the Securities pursuant to the provisions of
this Article XII unless and until a Responsible Officer of the Trustee shall
have received written notice thereof at the Corporate Trust Office of the
Trustee from the Company or a holder or holders of Senior Debt or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 6.03 hereof, shall be entitled in
all respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section 12.06 at
least two Business Days prior to the date upon which by the terms hereof any
money may become payable for any purpose (including, without limitation, the
payment of the principal of (and premium, if any) or interest on any Security),
then, anything herein contained to the contrary notwithstanding, the Trustee
shall have full power and authority to receive such money and to apply the same
to the purposes for which it was received, and shall not be affected by any
notice to the contrary which may be received by it within two Business Days
prior to such date.
The Trustee, subject to the provisions of Section 6.03, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee on behalf of
such holder) to establish that such notice has been given by a holder of such
Senior Debt or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Debt to participate in
any payment or distribution pursuant to this Article XII, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Debt held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the right of such Person under this Article XII, and,
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending
<PAGE> 76
76
judicial determination as to the right of such Person to receive such payment.
SECTION 12.07. Rights of the Trustee; Holders of Senior Debt. The
Trustee in its individual capacity shall be entitled to all the rights set forth
in this Article XII in respect of any Senior Debt at any time held by it, to the
same extent as any other holder of Senior Debt, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Debt of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are set forth in this Article XII, and no implied covenants or
obligations with respect to the holders of such Senior Debt shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of such Senior Debt and, subject to the provisions
of Section 6.03, the Trustee shall not be liable to any holder of such Senior
Debt if it shall pay over or deliver to Holders of Securities, the Company or
any other Person money or assets to which any holder of such Senior Debt shall
be entitled by virtue of this Article XII or otherwise.
SECTION 12.08. Subordination May Not Be Impaired. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Debt may, at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the holders of the Securities
and without impairing or releasing the subordination provided in this Article
XII or the obligations hereunder of the Holders of the Securities to the holders
of Senior Debt, do any one or more of the following: (i) change the manner,
place or terms of payment or extend the time of payment of, or renew or alter,
such Senior Debt, or otherwise amend or supplement in any manner such Senior
Debt or any instrument evidencing the same or any agreement under which such
Senior Debt is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Debt; (iii)
release any
<PAGE> 77
77
Person liable in any manner for the collection of such Senior Debt; and (iv)
exercise or refrain from exercising any rights against the Company and any other
Person.
ARTICLE XIII
Conversion of Securities
SECTION 13.01. Conversion Rights. Subject to and upon compliance
with the provisions of this Article, the Securities are convertible, at the
option of the Holder, at any time prior to 5:00 p.m. New York City time on March
15, 2030 into fully paid and nonassessable shares of Capital Stock of the
Company at an initial conversion rate of 0.73 shares of Capital Stock for each
$27 in aggregate principal amount of Securities (the "Initial Conversion Ratio")
(equal to a conversion price of $37 principal amount of Securities per share of
Capital Stock (the "Initial Conversion Price")). The conversion ratio and the
equivalent conversion price in effect at any given time are known as the
"Applicable Conversion Ratio" and the "Applicable Conversion Price",
respectively, and are subject to adjustment as described in this Article XIII. A
Holder of Securities may convert any portion of the principal amount of the
Securities into that number of fully paid and nonassessable shares of Capital
Stock (calculated as to each conversion to the nearest 1/100th of a share)
obtained by dividing the principal amount of the Securities to be converted by
the Applicable Conversion Ratio. In case a Security or portion thereof is called
for redemption, such conversion right in respect of the Security or portion so
called shall expire at the close of the Business Day immediately preceding the
corresponding Redemption Date, unless the Company defaults in making the payment
due upon redemption.
SECTION 13.02. Conversion Procedures. (a) In order to convert all or
a portion of the Securities, the Holder thereof shall deliver to the Conversion
Agent an irrevocable Notice of Conversion setting forth the principal amount of
Securities to be converted, together with the name or names, if other than the
Holder, in which the shares of Capital Stock should be issued upon conversion
and, if such Securities are definitive Securities, surrender to the Conversion
Agent the Securities to be converted, duly endorsed or assigned to the Company
or in blank. In addition, a holder of Preferred Securities may exercise its
right under the Declaration to convert such Preferred Securities into Capital
Stock by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and direct-
<PAGE> 78
78
ing the Conversion Agent (i) to exchange such Preferred Security for a portion
of the Securities held by the Trust (at an exchange rate of $27 principal amount
of Securities for each Preferred Security) and (ii) to immediately convert such
Securities, on behalf of such holder, into Capital Stock of the Company pursuant
to this Article XIII and, if such Preferred Securities are in definitive form,
surrender ing such Preferred Securities, duly endorsed or assigned to the
Company or in blank. So long as any Preferred Securities are outstanding, the
Trust shall not convert any Securities except pursuant to a Notice of
Conversion duly executed and delivered to the Conversion Agent by a holder of
Preferred Securities.
If a Notice of Conversion is delivered on or after the Regular
Record Date and prior to the subsequent Interest Payment Date, the Holder will
be entitled to receive the interest payable on the subsequent Interest Payment
Date on the portion of Securities to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date (unless the Maturity of such portion
of such Security is prior to such Interest Payment Date). Except as otherwise
provided in the immediately preceding sentence, in the case of any Security
which is converted, interest whose Stated Maturity is after the date of
conversion of such Security shall not be payable, and the Company shall not make
nor be required to make any other payment, adjustment or allowance with respect
to accrued but unpaid interest on the Securities being converted, which shall be
deemed to be paid in full. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the day on which the Notice of
Conversion was received (the "Conversion Date") by the Conversion Agent from the
Holder or from a holder of the Preferred Securities effecting a conversion
thereof pursuant to its conversion rights under the Declaration, as the case may
be. The Person or Persons entitled to receive the Capital Stock issuable upon
such conversion shall be treated for all purposes as the record holder or
holders of such Capital Stock as of the Conversion Date. As promptly as
practicable on or after the Conversion Date, the Company shall issue and deliver
at the office of the Conversion Agent, unless otherwise directed by the Holder
in the Notice of Conversion, a certificate or certificates for the number of
full shares of Capital Stock issuable upon such conversion, together with the
cash payment, if any, in lieu of any fraction of any share to the Person or
Persons entitled to receive the same. The Conversion Agent shall deliver such
certificate or certificates to such Person or Persons.
(b) Subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as
<PAGE> 79
79
provided in the last paragraph of Section 3.08 and the second paragraph of
clause (a) of Section 13.02, the Company's delivery upon conversion of the whole
number of shares of Capital Stock into which the Securities are convertible
(together with the cash payment, if any, in lieu of fractional shares) shall be
deemed to satisfy the Company's obligation to pay the principal amount at
Maturity of the portion of Securities so converted and any unpaid interest
(including Compounded Interest and Additional Sums) accrued on such Securities
at the time of such conversion.
(c) No fractional shares of Capital Stock will be issued as a result
of conversion, but in lieu thereof, the Company shall pay to the Conversion
Agent a cash adjustment in an amount equal to the same fraction of the Closing
Price of such fractional interest on the date on which the Securities or
Preferred Securities, as the case may be, were duly surrendered to the
Conversion Agent for conversion, or, if such day is not a Trading Day, on the
next Trading Day, and the Conversion Agent in turn will make such payment, if
any, to the Holder of the Securities or the holder of the Preferred Securities
so converted.
(d) In the event of the conversion of any Security in part only, a
new Security or Securities for the unconverted portion thereof will be issued
in the name of the Holder thereof upon the cancelation thereof in accordance
with Section 3.06.
(e) In effecting the conversion transactions described in this
Section, the Conversion Agent is acting as agent of the holders of Preferred
Securities (in the exchange of Preferred Securities for Securities) and as
agent of the Holders of Securities (in the conversion of Securities into
Capital Stock), as the case may be, directing it to effect such conversion
transactions. The Conversion Agent is hereby authorized (x) if the Trust exists,
(i) to exchange Securities held by or on behalf of the Trust from time to time
for Preferred Securities in connection with the conversion of such Preferred
Securities in accordance with this Article XIII and (ii) to convert all or a
portion of the Securities into Capital Stock and thereupon to deliver such
shares of Capital Stock in accordance with the provisions of this Article XIII
and to deliver to the Trust a new Security or Securities for any resulting
unconverted principal amount and (y) if the Trust no longer exists (i) to
exchange Securities held by the Holders in connection with the conversion of
such Securities in accordance with this Article XIII and (ii) to convert all or
a portion of the Securities into Capital Stock and thereupon to deliver such
shares of Capital Stock in accordance with the provisions of this Article XIII
and to deliver to such
<PAGE> 80
80
Holders a new Security or Securities for any resulting unconverted principal
amount.
SECTION 13.03. Conversion Price Adjustments. The Applicable
Conversion Price shall be subject to adjustment (without duplication) from time
to time as follows:
(i) In case the Company shall pay a dividend or make a distribution
on the Capital Stock exclusively in Capital Stock, the Applicable
Conversion Price in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive
such dividend or other distribution shall be reduced by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
the number of shares of Capital Stock outstanding at the close of business
on the date fixed for such determination and the denominator shall be the
sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the date
fixed for such determination. For the purposes of this subparagraph (i),
the number of shares of Capital Stock at any time outstanding shall not
include shares held in the treasury of the Company. In the event that such
dividend or distribution is not so paid or made, the Applicable Conversion
Price shall again be adjusted to be the Applicable Conversion Price which
would then be in effect if such dividend or distribution had not occurred.
(ii) In case the Company shall pay or make a dividend or other
distribution on its Capital Stock consisting exclusively of, or shall
otherwise issue to all holders of its Capital Stock, rights or warrants,
in each case entitling the holders thereof to subscribe for or purchase
shares of Capital Stock at a price per share less than the current market
price per share (determined as provided in subparagraph (vii)) of the
Capital Stock on the date fixed for the determination of stockholders
entitled to receive such rights or warrants, the Applicable Conversion
Price in effect at the opening of business on the day following the date
fixed for such determination shall be reduced by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
the number of shares of Capital Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Capital Stock which the aggregate of the offering price of the total
number of shares of Capital Stock so offered for subscription or
<PAGE> 81
81
purchase would purchase at such current market price and the denominator
shall be the number of shares of Capital Stock outstanding at the close of
business on the date fixed for such determination plus the number of
shares of Capital Stock so offered for subscription or purchase, such
reduction to become effective immediately after the opening of business on
the day following the date fixed for such determination. To the extent
that rights are not so issued or shares of Capital Stock are not so
delivered after the expiration of such rights or warrants, the Applicable
Conversion Price shall be readjusted to the Applicable Conversion Price
which would then be in effect if such date fixed for the determination of
stockholders entitled to receive such rights or warrants had not been
fixed. For the purposes of this subparagraph (ii), the number of shares of
Capital Stock at any time outstanding shall not include shares held in the
treasury of the Company.
(iii) In case outstanding shares of Capital Stock shall be
subdivided into a greater number of shares of Capital Stock, the
Applicable Conversion Price in effect at the opening of business on the
day following the day upon which such subdivision becomes effective shall
be proportionately reduced and, conversely, in case outstanding shares of
Capital Stock shall each be combined into a smaller number of shares of
Capital Stock, the Applicable Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase,
as the case may be, to become effective immediately after the opening of
business on the day following the day upon which such subdivision or
combination becomes effective.
(iv) Subject to the last sentence of this subparagraph (iv), in case
the Company shall, by dividend or otherwise, distribute to all holders of
its Capital Stock evidences of its indebtedness, shares of any class or
series of capital stock, cash or assets (including securities, but
excluding any rights or warrants referred to in subparagraph (ii) of this
Section 13.03, any dividend or distribution paid exclusively in cash and
any dividend or distribution referred to in subparagraph (i) of this
Section 13.03), the Applicable Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
Applicable Conversion Price reduction contemplated by
<PAGE> 82
82
this subparagraph (iv) by a fraction of which the numerator shall be the
current market price per share (determined as provided in subparagraph
(vii) of this Section 13.03) of the Capital Stock on the date fixed for
the determination of stockholders entitled to receive such distribution
(the "Reference Date") less the fair market value (as determined in good
faith by the Board of Directors, whose determination shall be conclusive
and described in a resolution of the Board of Directors), on the Reference
Date, of the portion of the evidences of indebtedness, shares of capital
stock, cash and assets so distributed applicable to one share of Capital
Stock and the denominator shall be such current market price per share of
the Capital Stock, such reduction to become effective immediately prior to
the opening of business on the day following the Reference Date. In the
event that such dividend or distribution is not so paid or made, the
Applicable Conversion Price shall again be adjusted to be the Applicable
Conversion Price which would then be in effect if such dividend or
distribution had not occurred. For purposes of this subparagraph (iv), any
dividend or distribution that includes shares of Capital Stock or rights
or warrants to subscribe for or purchase shares of Capital Stock shall be
deemed instead to be (1) a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets other than such
shares of Capital Stock or such rights or warrants (making any Applicable
Conversion Price reduction required by this subparagraph (iv))
immediately followed by (2) a dividend or distribution of such shares of
Capital Stock or such rights or warrants (making any further Applicable
Conversion Price reduction required by subparagraph (i) or (ii) of this
Section 13.03), except any shares of Capital Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of
subparagraph (i) of this Section 13.03.
(v) In case the Company shall pay or make a dividend or other
distribution on its Capital Stock exclusively in cash (excluding cash
dividends to the extent that the annualized per share amount thereof does
not exceed 12 1/2 of the current market price per share of the Capital
Stock on the Trading Day next preceding the date of declaration of such
dividend), the Applicable Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Applicable
Conversion Price in effect immediately prior to the effectiveness of the
<PAGE> 83
83
Applicable Conversion Price reduction contemplated by this subparagraph
(v) by a fraction of which the numerator shall be the current market price
per share (determined as provided in subparagraph (vii) of this Section
13.03) of the Capital Stock on the date fixed for the payment of such
distribution less the amount of cash so distributed and not excluded as
provided applicable to one share of Capital Stock and the denominator
shall be such current market price per share of the Capital Stock, such
reduction to become effective immediately prior to the opening of business
on the day following the date fixed for the payment of such distribution;
provided, however, that in the event the portion of the cash so
distributed applicable to one share of Capital Stock is equal to or
greater than the current market price per share (as defined in
subparagraph (vii) of this Section 13.03) of the Capital Stock on the
record date mentioned above, in lieu of the foregoing adjustment, adequate
provision shall be made so that each Holder of Securities shall have the
right to receive upon conversion the amount of cash such Holder would have
received had such Holder converted each Security immediately prior to the
record date for the distribution of the cash. In the event that such
dividend or distribution is not so paid or made, the Applicable Conversion
Price shall again be adjusted to be the Applicable Conversion Price which
would then be in effect if such record date had not been fixed.
(vi) In case a tender or exchange offer (other than an odd-lot
offer) made by the Company or any Subsidiary of the Company for all or any
portion of the Company's Capital Stock shall expire and such tender or
exchange offer shall involve the payment by the Company or such Subsidiary
of consideration per share of Capital Stock having a fair market value (as
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors) at the last time (the "Expiration Time") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have
been amended) that exceeds 110% of the current market price per share
(determined as provided in subparagraph (vii) of this Section 13.03) of
the Capital Stock on the Trading Day next succeeding the Expiration Time,
the Applicable Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Applicable Conversion Price
in effect immediately prior to the effectiveness of the Applicable
Conversion Price reduction contemplated by this subparagraph (vi) by a
fraction of which
<PAGE> 84
84
the numerator shall be the number of shares of Capital Stock outstanding
(including any tendered or exchanged shares) at the Expiration Time
multiplied by the current market price per share (determined as provided
in subparagraph (vii) of this Section 13.03) of the Capital Stock on the
Trading Day next succeeding the Expiration Time and the denominator shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance
(up to any maximum specified in the terms of the tender or exchange offer)
of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum,
being referred to as the "Purchased Shares") and (y) the product of the
number of shares of Capital Stock outstanding (less any Purchased Shares)
at the Expiration Time and the current market price per share (determined
as provided in subparagraph (vii) of this Section 13.03) of the Capital
Stock on the Trading Day next succeeding the Expiration Time, such
reduction to become effective immediately prior to the opening of business
on the day following the Expiration Time.
(vii) For the purpose of any computation under subparagraphs (ii),
(iv), (v) and (vi) of this Section 13.03, the current market price per
share of Capital Stock on any date in question shall be deemed to be the
average of the daily Closing Prices for the ten consecutive Trading Days
prior to the earlier of the day in question and, if applicable, the day
before the "ex" date with respect to the issuance or distribution
requiring such computation; provided, however, that if another event
occurs that would require an adjustment pursuant to subparagraphs (i)
through (vi) of this Section 13.03, inclusive, the Board of Directors may
make such adjustments to the Closing Prices during such five Trading Day
period as it deems appropriate to effectuate the intent of the adjustments
in this Section 13.03, in which case any such determination by the Board
of Directors shall be set forth in a Board Resolution and shall be
conclusive. For purposes of this paragraph, the term "ex" date, (1) when
used with respect to any issuance or distribution, means the first date on
which the Capital Stock is quoted regular way on the New York Stock
Exchange Composite Tape or on such successor securities exchange on which
the Capital Stock may be quoted or listed or in the relevant market from
which the Closing Prices were obtained without the right to receive such
issuance or distribution, and (2) when used with respect to any tender or
exchange offer means the first
<PAGE> 85
85
date on which the Capital Stock is quoted regular way on such securities
exchange or in such market after the Expiration Time of such offer.
(viii) The Company may make such reductions in the Applicable
Conversion Price, in addition to those required by subparagraphs (i),
(ii), (iii), (iv), (v) and (vi) of this Section 13.03, as it considers to
be advisable to avoid or diminish any income tax to holders of Capital
Stock or rights to purchase Capital Stock resulting from any dividend or
distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes.
(ix) There shall also be no adjustment of the Applicable Conversion
Price in case of the issuance of any Capital Stock (or securities
convertible into or exchangeable for Capital Stock), except as
specifically described above. If any action would require adjustment of
the Applicable Conversion Price, pursuant to more than one of the
anti-dilution provisions set forth in this Article XIII, only one
adjustment shall be made and such adjustment shall be the amount of
adjustment that has the highest absolute value to Holders. Furthermore, no
adjustment in the Applicable Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Applicable Conversion Price; provided, however, that any adjustments
which by reason of this sentence are not required to be made shall be
carried forward and taken into account in determining whether any
subsequent adjustment shall be required.
SECTION 13.04. Reclassification, Consolidation, Merger or Sale of
Assets. In the event that the Company shall be a party to any transaction
(including without limitation (a) any recapitalization or reclassification of
the Capital Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination of the Capital Stock), (b) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancelation of outstanding shares of Capital Stock of
the Company), (c) any sale or transfer of all or substantially all of the assets
of the Company or (d) any compulsory share exchange) (each of the events in the
preceding clauses (a) through (d) being referred to as a "Company Transaction"),
in each case, as a result of which shares of Capital Stock shall be converted
into the right to receive other securities, cash or other property, then
<PAGE> 86
86
lawful provision shall be made as part of the terms of such Company Transaction
whereby the Holder of each Security then outstanding shall have the right
thereafter to convert such Security only into (i) in the case of any Company
Trans action other than a Capital Stock Fundamental Change, the kind and amount
of securities, cash and other property receivable upon the consummation of the
Company Transaction by a holder of that number of shares of Capital Stock into
which such Security was convertible immediately prior to such transaction, after
giving effect to any adjustment in the Applicable Conversion Price required by
the provision of Section 13.07(a)(i), and (ii) in the case of a Company
Transaction involving a Capital Stock Fundamental Change, common stock of the
kind received by holders of Capital Stock as a result of such Capital Stock
Fundamental Change in an amount determined pursuant to the provisions of Section
13.07(a)(ii). Holders of the Securities shall have no voting rights with respect
to any Company Transaction described in this Section 13.04.
The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XIII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
SECTION 13.05. Notice of Adjustments of Conversion Price. Whenever
the Applicable Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Applicable Conversion
Price and shall prepare a certificate signed by the Chief Financial
Officer or the Treasurer of the Company setting forth the adjusted
Applicable Conversion Price and showing in reasonable detail the facts
upon which such adjustment is based, and such certificate shall forthwith
be filed with the Trustee, the Conversion Agent and the transfer agent for
the Preferred Securities and the Securities; and
(b) a notice stating the Applicable Conversion Price has been
adjusted and setting forth the adjusted Applicable Conversion Price shall
as soon as practicable be mailed by the Company to all record holders of
<PAGE> 87
87
Preferred Securities and the Securities at their last addresses as they
appear upon the stock transfer books of the Company and the books and
records of the Trust, respectively.
SECTION 13.06. Prior Notice of Certain Events. In case:
(i) the Company shall (1) declare any dividend (or any other
distribution) on its Capital Stock, other than (A) a dividend payable in
shares of Capital Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 13.03(iv) or (v) or (2)
authorize a tender or exchange offer that would require an adjustment
pursuant to Section 13.03(vi);
(ii) the Company shall authorize the granting to all holders of
Capital Stock of rights or warrants to subscribe for or purchase any
shares of stock of any class or series or of any other rights or warrants;
(iii) of any reclassification of Capital Stock (other than a
subdivision or combination of the outstanding Capital Stock, or a change
in par value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the Company is a
party and for which approval of any stockholders of the Company shall be
required, or of the sale or transfer of all or substantially all of the
assets of the Company or of any compulsory share exchange whereby the
Capital Stock is converted into other securities, cash or other property;
or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (a) if any Preferred Securities are outstanding, cause to
be filed with the transfer agent for the Preferred Securities, and shall cause
to be mailed to the holders of record of the Preferred Securities, at their last
addresses as they shall appear upon the books and records of the Trust, or (b)
shall cause to be mailed to all Holders at their last addresses as they shall
appear in the Security Register, at least fifteen days prior to the applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record (if any) is to be taken for the purpose of such dividend,
distribution, rights or warrants or, if a record is not to be taken, the date as
of which the holders of Capital Stock of record to be entitled to such dividend,
distribution, rights or warrants are to be determined or (y) the date on which
such
<PAGE> 88
88
reclassification, consolidation, merger, sale, transfer, share exchange,
dissolution, liquidation or winding up is expected to become effective, and the
date as of which it is expected that holders of Capital Stock of record shall be
entitled to exchange their shares of Capital Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, share exchange, dissolution, liquidation or winding up (but no failure
to mail such notice or any defect therein or in the mailing thereof shall affect
the validity of the corporate action required to be specified in such notice).
SECTION 13.07. Adjustments in Case of Fundamental Changes. (a)
Notwithstanding any other provision in this Article XIII to the contrary, in the
case of any Company Transaction involving a Fundamental Change, the Applicable
Conversion Price will be adjusted immediately after such Fundamental Change as
follows:
(i) in the case of a Non-Stock Fundamental Change, the Applicable
Conversion Price of the Securities shall thereupon become the lower of (A)
the Applicable Conversion Price in effect immediately prior to such
Non-Stock Fundamental Change, but after giving effect to any other prior
adjustments effected pursuant to this Article XIII, and (B) the result
obtained by multiplying the greater of the Relevant Price or the then
applicable Reference Market Price by the Optional Redemption Ratio (such
product shall hereinafter be referred to as the "Adjusted Relevant Price"
or the "Adjusted Reference Market Price", as the case may be); and
(ii) in the case of a Capital Stock Fundamental Change, the
Applicable Conversion Price of the Securities in effect immediately prior
to such Capital Stock Fundamental Change, but after giving effect to any
other prior adjustments effected pursuant to this Article XIII, shall
thereupon be adjusted by multiplying such Applicable Conversion Price by a
fraction of which the numerator shall be the Purchaser Stock Price and the
denominator shall be the Relevant Price; provided, however, that in the
event of a Capital Stock Fundamental Change in which (A) 100% of the value
of the consideration received by a holder of Capital Stock is common stock
of the successor, acquiror or other third party (and cash, if any, is paid
only with respect to any fractional interests in such common stock
resulting from such Capital Stock Fundamental Change) and (B) all of the
Capital Stock shall have been exchanged for, converted into or ac-
<PAGE> 89
89
quired for common stock (and cash with respect to fractional interests) of
the successor, acquiror or other third party, the Applicable Conversion
Price of the Securities in effect immediately prior to such Capital Stock
Fundamental Change shall thereupon be adjusted by multiplying such
Applicable Conversion Price by a fraction of which the numerator shall be
one and the denominator shall be the number of shares of common stock of
the successor, acquiror, or other third party received by a stockholder
for one share of Capital Stock as a result of such Capital Stock
Fundamental Change.
(b) Definitions. The following definitions shall apply to terms used
in this Article XIII:
(1) "Closing Price" of any security on any day shall mean on any day
the last reported sale price of such security on such day, or in case no
sale takes place on such day, the average of the closing bid and asked
prices in each case on the principal national securities exchange on which
such securities are listed or admitted to trading or, if not listed or
admitted to trading on any national securities exchange, on the NNM or, if
such securities are not listed or admitted to trading on any national
securities exchange or quoted on the NNM, the average of the closing bid
and asked prices in the over-the-counter market as furnished by any New
York Stock Exchange member firm, or the national, commission-recognized
trading system, selected by the Company for such purpose.
(2) "Capital Stock Fundamental Change" shall mean any Fundamental
Change in which more than 50% of the value (as determined in good faith by
the Board of Directors) of the consideration received by holders of
Capital Stock consists of common stock that for each of the ten
consecutive Trading Days immediately prior to the Entitlement Date has
been admitted for listing or admitted for listing subject to notice of
issuance on a national securities exchange or quoted on the NNM.
(3) "Entitlement Date" shall mean the record date for determination
of the holders of Capital Stock entitled to receive securities, cash or
other property in connection with a Non-Stock Fundamental Change or a
Capital Stock Fundamental Change or, if there is no such record date, the
date upon which holders of Capital Stock shall have the right to receive
such securities, cash or other property.
<PAGE> 90
90
(4) "Fundamental Change" shall mean the occurrence of any
transaction or event in connection with a plan pursuant to which all or
substantially all of the Capital Stock shall be exchanged for,
converted into, acquired for or constitute solely the right to receive
securities, cash or other property (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in
the case of a plan involving more than one such transaction or event,
for purposes of adjustment of the Applicable Conversion Price, such
Fundamental Change shall be deemed to have occurred when substantially
all of the Capital Stock of the Company shall be exchanged for,
converted into, or acquired for or constitute solely the right to
receive securities, cash or other property, but the adjustment shall be
based upon the highest weighted average per share consideration that a
holder of Capital Stock could have received in such transactions or
events as a result of which more than 50% of the Capital Stock of the
Company shall have been exchanged for, converted into, or acquired for
or constitute solely the right to receive securities, cash or other
property.
(5) "Non-Stock Fundamental Change" shall mean any
Fundamental Change other than a Capital Stock
Fundamental Change.
(6) "Optional Redemption Ratio" means a fraction of which the
numerator shall be $27 and the denominator will be the then current
Optional Redemption Price or, prior to March 15, 2003, an amount per
Security determined by the Company in its sole discretion, after
consultation with an investment banking firm, to be the equivalent of
the hypothetical redemption price that would have been applicable if
the Securities had been redeemable during such period.
(7) "Purchaser Stock Price" shall mean, with respect to any
Capital Stock Fundamental Change, the average of the daily Closing
Prices of the common stock received in such Capital Stock Fundamental
Change for the ten (10) consecutive Trading Days prior to and including
the Entitlement Date, as adjusted in good faith by the Board of
Directors to appropriately reflect any of the events referred to in
subparagraphs (i), (ii), (iii), (iv), (v) and (vi) of Section 13.03.
(8) "Reference Market Price" shall initially mean on the date
of original issuance of the Securities, $18 (which is an amount equal
to 66-2/3% of the liquidation
<PAGE> 91
91
amount per Preferred Security), and, in the event of any adjustment to
the Applicable Conversion Price, other than as a result of a Non-Stock
Fundamental Change, the Reference Market Price shall also be adjusted
so that the ratio of the Reference Market Price to the Applicable
Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $18 to the Initial Conversion Price.
(9) "Relevant Price" shall mean (i) in the event of a
Non-Stock Fundamental Change in which the holders of the Capital Stock
receive only cash, the amount of cash received by a stockholder for one
share of Capital Stock and (ii) in the event of any other Non-Stock
Fundamental Change or any Capital Stock Fundamental Change, the average
of the daily Closing Prices of the Capital Stock for the ten (10)
consecutive Trading Days prior to and including the Entitlement Date,
in each case, as adjusted in good faith by the Company to appropriately
reflect any of the events referred to in subparagraphs (i), (ii),
(iii), (iv), (v) and (vi) of Section 13.03.
(10) "Trading Day" shall mean a Business Day on which
securities are traded on the national securities exchange, trading
system or quotation system used to determine the Closing Price.
SECTION 13.08. Dividend or Interest Reinvestment Plans. (a)
Notwithstanding the foregoing provisions, the issuance of any shares of Capital
Stock pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Capital Stock under any such plan, and
the issuance of any shares of Capital Stock or options or rights to purchase
such shares pursuant to any employee benefit plan or program of the Company or
pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the date the Securities were first
issued, shall not be deemed to constitute an issuance of Capital Stock or
exercisable, exchangeable or convertible securities by the Company to which any
of the adjustment provisions described above applies.
(b) There shall also be no adjustment of the Applicable
Conversion Price in case of the issuance of any stock (or securities convertible
into or exchangeable for stock) of the Company except as specifically described
in this Article XIII.
<PAGE> 92
92
SECTION 13.09. Certain Additional Rights. Notwithstanding any
other provision of this Article XIII to the contrary, rights, warrants,
evidences of indebtedness, other securities, cash or other assets (including,
without limitation, any rights distributed pursuant to any stockholder rights
plan) shall be deemed not to have been distributed for purposes of this Article
XIII if the Company makes proper provision so that each Holder who converts a
Security (or any portion thereof) after the date fixed for determination of
stockholders entitled to receive such distribution shall be entitled to receive
upon such conversion, in addition to the shares of Capital Stock issuable upon
such conversion, the amount and kind of such distributions that such Holder
would have been entitled to receive if such Holder had, immediately prior to
such determination date, converted such Security into Capital Stock.
SECTION 13.10. Trustee Not Responsible for Determining
Conversion Price or Adjustments. Neither the Trustee nor any Conversion Agent
shall at any time be under any duty or responsibility to any Holder of any
Security to determine whether any facts exist which may require any adjustment
of the Applicable Conversion Price, or with respect to the nature or extent of
any such adjustment when made, or with respect to the method employed, or herein
or in any supplemental indenture provided to be employed, in making the same.
Neither the Trustee nor any Conversion Agent shall be accountable with respect
to the validity or value (or the kind or amount) of any shares of Capital Stock
or of any securities or property, which may at any time be issued or delivered
upon the conversion of any Security; and neither the Trustee nor any Conversion
Agent makes any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make
any cash payment or to issue, transfer or deliver any shares of Capital Stock or
stock certificates or other securities or property upon the surrender of any
Security for the purpose of conversion, or, except as expressly herein provided,
to comply with any of the covenants of the Company contained in Article X or
this Article XIII.
ARTICLE XIV
Immunity of Incorporators,
Stockholders, Officers and Directors
SECTION 14.01. No Recourse. No recourse under or upon any
obligation, covenant or agreement of this Indenture, or of any Security, or for
any claim based thereon or
<PAGE> 93
93
otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that this
Indenture and the obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or is or shall be
incurred by, the incorporators, stockholders, officers or directors as such, of
the Company or of any predecessor or successor corporation, or any of them,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom; and that any and all such
personal liability of every name and nature, either at common law or in equity
or by constitution or statute, of, and any and all such rights and claims
against, every such incorporator, stockholder, officer or director as such,
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in this Indenture
or in any of the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the execution of
this Indenture and the issuance of such Securities.
<PAGE> 94
94
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed as of the day and year first above written.
CHEMED CORPORATION,
by __________________________________
Name:
Title:
FIRSTAR BANK, NATIONAL
ASSOCIATION,
by __________________________________
Name:
Title:
<PAGE> 95
EXHIBIT A
FORM OF SECURITY
[FORM OF FACE OF SECURITY]
[Include if a Global Security: THIS SECURITY IS A GLOBAL SECURITY WITHIN THE
MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME
OF THE DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE
DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR A SECURITY REGISTERED IN THE NAME
OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND NO TRANSFER OF THIS SECURITY (OTHER
THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF
THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO CHEMED
CORPORATION OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND
ANY SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME
AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND
ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
<PAGE> 96
2
CHEMED CORPORATION
Convertible Junior Subordinated
Debenture Due 2030
No. $
[CUSIP No. ]
CHEMED CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (herein called "the Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns,
the principal sum [indicated on Schedule A hereof](1) [of Dollars](2) ($ )
on March 15, 2030.
Interest Payment Dates: March 15, June 15, September 15 and
December 15, commencing March 15, 2000
Regular Record Dates: the close of business on the first of the
month in which the applicable Interest Payment
Date occurs, commencing March 1, 2000
Reference is hereby made to the further provisions of this
Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
- ----------
(1) Applicable to Global Securities only.
(2) Applicable to certificated Securities only.
<PAGE> 97
IN WITNESS WHEREOF, the Company has caused this instrument to
be signed manually or by facsimile by its duly authorized officers and a
facsimile of its corporate seal to be affixed hereto or imprinted hereon.
Dated: ,
CHEMED CORPORATION
By:____________________________________
Name:
Title:
[Seal]
Attest:
_____________________
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated: Firstar Bank, National Association
as Trustee,
By: ____________________________________
Authorized Signatory
<PAGE> 98
2
[FORM OF REVERSE OF SECURITY]
CHEMED CORPORATION
Convertible Junior Subordinated
Debenture Due 2030(3)
1. Interest. CHEMED Corporation, a Delaware corporation (the
"Company"), is the issuer of this Convertible Junior Subordinated Debenture Due
2030 (the "Security") limited in aggregate principal amount to $27, issued under
the Indenture hereinafter referred to. The Company promises to pay interest on
the Securities in cash from -, 2000 or from the most recent interest payment
date to which interest has been paid or duly provided for, quarterly (subject to
deferral for up to 20 consecutive quarters as described in Section 3 hereof) in
arrears on March 15, June 15, September 15 and December 15 of each year (each
such date, an "Interest Payment Date"), commencing March 15, 2000, at $0.50 per
$27 principal amount for the period from issuance of the Securities to March 15,
2000, and from March 15, 2000, at the Applicable Rate, plus Additional Sums, if
any, until the principal hereof shall have become due and payable.
Except for the interest payable on March 15, 2000, the amount
of interest payable for any period will be computed on the basis of twelve
30-day months and a 360-day year. To the extent lawful, the Company shall pay
interest on overdue installments of interest (without regard to any applicable
grace period) at the rate borne by the Securities, compounded quarterly. Any
interest paid on this Security shall be increased to the extent necessary to pay
Additional Sums as set forth in this Security.
2. Additional Sums. The Company shall pay to CHEMED Capital
Trust (and its permitted successors or assigns under the Declaration) (the
"Trust") such additional amounts as may be necessary in order that the amount of
dividends or other distributions then due and payable by the Trust on the
Preferred Securities that at any time remain outstanding in accordance with the
terms thereof shall not be reduced as a result of any additional taxes, duties
and other governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any other taxing authority.
3. Extension of Interest Payment Period. So long as no Event
of Default has occurred and is continuing, the Company shall have the right, at
any time during the term of this Security, from time to time to defer payments
of interest by extending the interest payment period of such Security for up to
20 consecutive quarters (a "Deferral Period"); provided that no Deferral Period
may extend beyond March 15, 2030. To the extent permitted by applicable law,
interest, the payment of which has been deferred because of the extension of the
interest payment period pursuant to Section 3.13 of the Indenture, will bear
interest thereon at the Applicable Rate compounded quarterly for each quarter of
the Deferral Period ("Compounded Interest"). On the applicable Payment
Resumption Date, the Company shall pay all interest then accrued and unpaid on
the Securities, including any Compounded Interest that shall be payable to the
Holders of the Securities in whose
- --------
(3) All terms used in this Security which are defined in the Indenture or in
the Declaration referred to herein shall have the meanings as signed to them in
the Indenture or the Declaration, as the case may be.
<PAGE> 99
3
names the Securities are registered in the Security Register on the record date
fixed for such Payment Resumption Date. Before the termination of any Deferral
Period, the Company may further extend such period as provided in the Indenture,
provided that such period together with all such further extensions thereof
shall not exceed 20 consecutive quarters or extend beyond the Stated Maturity of
the Security. Upon the termination of any Deferral Period and upon the payment
of all Compounded Interest and Additional Sums (together, "Additional
Payments"), if any, then due, the Company may commence a new Deferral Period,
subject to the foregoing requirements. No interest shall be due and payable
during a Deferral Period except on the applicable Payment Resumption Date.
The Company shall give the Holder of the Security and the
Trustee written notice (a "Deferral Notice") of its selection of a Deferral
Period at least ten days prior to the record date for any distributions that
would have been payable on the Trust Securities except for the decision to begin
or extend such Deferral Period. The Company may elect to pay all interest then
accrued and unpaid on the Securities, including Compound Interest, on an
Interest Payment Date prior to its most recently established Payment Resumption
Date, provided that the Company gives the Holder of the Security and the Trustee
a new Deferral Notice setting forth the revised Payment Resumption Date at least
three Business Days prior to the Regular Record Date for such revised Payment
Resumption Date.
The quarter in which any Deferral Notice is given pursuant to
the second paragraph of this Section 3 shall be counted as one of the 20
quarters permitted in the maximum Deferral Period permitted under the first
paragraph of this Section 3.
4. Method of Payment. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the regular
record date for such interest installment, which shall be the close of business
on the fifteenth day immediately preceding each Interest Payment Date (the
"Regular Record Date"), commencing March 1, 2000. Any such interest not so
punctually paid or duly provided for shall forthwith cease to be payable to the
Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities not less than ten days prior to such Special Record Date, or be paid
at any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture, provided that any such payment will be made in such coin or currency
of the United States of America which at the time of payment is a legal tender
for payment of public and private debts.
Payment of the principal of and interest on this Security will
be made at the office or agency of the Company maintained for that purpose in
Cincinnati, Ohio, in coin or currency of the United States of America which at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at any time that the Property Trustee is not the sole
holder of the Securities, payment of interest may, at the option of the Company,
be made by check mailed to
<PAGE> 100
4
the address of the Person entitled thereto as such address shall appear in the
Security Register or by wire transfer.
5. Paying Agent and Security Registrar. The Trustee will act
as Paying Agent, Security Registrar and Conversion Agent. The Company may change
any Paying Agent, Security Registrar, co-registrar or Conversion Agent without
prior notice. The Company or any of its Affiliates may act in any such capacity.
6. Indenture. The Company issued the Securities under an
indenture, dated as of January -, 2000 (the "Indenture"), between the Company
and Firstar Bank, National Association, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by the Trust Indenture Act of 1939 ("Trust
Indenture Act") as in effect on the date of the Indenture. The Securities are
subject to, and qualified by, all such terms, certain of which are summarized
herein, and holders are referred to the Indenture and the Trust Indenture Act
for a statement of such terms. The Securities are unsecured general obligations
of the Company limited to up to $- and subordinated in right of payment to all
existing and future Senior Debt of the Company. No reference herein to the
Indenture and no provision of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Security at the times, place and rate,
and in the coin or currency, herein prescribed or to convert this Security as
provided in the Indenture.
7. Optional Redemption. The Securities are redeemable at the
Company's option (an "Optional Redemption") in whole or in part, at any time or
from time to time, on or after March 15, 2003, at a Redemption Price equal to
$27.27 per $27 principal amount of the Securities to be redeemed plus any
accrued and unpaid interest, including Additional Payments, if any, to the
Redemption Date, if redeemed on or before March 15, 2004, and thereafter at $27
per $27 principal amount of the Securities plus, in each case, any accrued and
unpaid interest, including Additional Payments, if any, to the Redemption Date.
8. Optional Redemption Upon Tax Event. Subject to the
conditions set forth in the Indenture, the Securities are subject to redemption
in whole, but not in part, if a Tax Event shall occur and be continuing, at any
time within 90 days following the occurrence of such Tax Event, at a Redemption
Price equal to $27.27 per $27 principal amount thereof, plus accrued but unpaid
interest, including Additional Payments, if any, to the Redemption Date.
In lieu of the foregoing, the Company also shall have the
option of causing the Securities to remain outstanding and pay Additional Sums
on the Securities.
9. Notice of Redemption. Notice of redemption will be mailed
by first-class mail, postage prepaid, at least 30 days (or 20 days, in the case
of a redemption upon the occurrence of a Tax Event), but not more than 60 days
before the Redemption Date to each Holder of
<PAGE> 101
5
the Securities to be redeemed at such Holder's address appearing in the Security
Register.
10. No Sinking Fund. There are no sinking fund payments
with respect to the Securities.
11. Payment to Registered Holders; Cessation of Interest
Accrual Upon Redemption. If this Security is redeemed subsequent to a Regular
Record Date with respect to any Interest Payment Date specified above and on or
prior to such Interest Payment Date, then any accrued interest will be paid to
the person in whose name this Security is registered at the close of business on
such record date. On or after the Redemption Date, interest will cease to accrue
on the Securities, or portion thereof, called for redemption.
12. Subordination. The payment of the principal of, interest
on or any other amounts due on the Securities is subordinated in right of
payment to all existing and future Senior Debt (as defined below) of the
Company, as described in the Indenture. Each Holder, by accepting a Security,
agrees to such subordination and authorizes and directs the Trustee on its
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee as its attorney-in-fact for
such purpose.
"Senior Debt" means (i) the principal of, and premium and
interest, if any, on all indebtedness of the Company for money borrowed, whether
outstanding on the date of execution of the Indenture or thereafter created,
assumed or incurred, (ii) all obligations to make payment pursuant to the terms
of financial instruments, such as (a) securities contracts and foreign currency
exchange contracts, (b) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements), cap
agreements, floor agreements, collar agreements, interest rate agreements,
foreign exchange agreements, options, commodity futures contracts and commodity
options contracts, and (c) similar financial instruments; except, in the case of
both (i) and (ii) above, such indebtedness and obligations that are expressly
stated to rank junior in right of payment to, or pari passu in right of payment
with, the Securities, (iii) indebtedness or obligations of others of the kind
described in both (i) and (ii) above for the payment of which the Company is
responsible or liable as guarantor or otherwise, and (iv) deferrals, renewals or
extensions of any such Senior Debt; provided, however, that Senior Debt shall
not be deemed to include (a) any Debt of the Company which, when incurred and
without respect to any election under Section 1111(b) of the United States
Bankruptcy Code of 1978, was without recourse to the Company, (b) trade accounts
payable and accrued liabilities arising in the ordinary course of business, (c)
any Debt of the Company to any of its subsidiaries, (d) Debt to any employee of
the Company, and (e) Debt which by its terms is subordinated to trade accounts
payable or accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of such Debt by the Holders of the
Securities as a result of the subordination provisions of the Indenture would be
greater than such payments otherwise would have been as a result of any
obligation of such holders of such Debt to pay amounts over to the obligees on
such trade accounts payable or accrued liabilities arising in the ordinary
course of business as a result of subordination provisions to which such Debt is
subject.
13. Conversion. The Holder of any Security has the right,
exercisable at any time prior to 5:00 p.m., New York City time, on March 15,
2030, to convert the principal amount thereof (or any portion
<PAGE> 102
6
thereof that is an integral multiple of $27) into shares of Capital Stock at the
initial conversation rate of 0.73 shares of Capital Stock for each $27 in
aggregate principal amount of Securities (equivalent to a conversion price of
$37 per share of Capital Stock of the Company). The conversion ratio and
equivalent conversion price in effect at any time are known as the "Applicable
Conversion Price" and the "Applicable Conversion Ratio," respectively, and are
subject to adjustment under certain circumstances. If a Security is called for
redemption, the conversion right will terminate at the close of business on the
Business Day immediately preceding the corresponding Redemption Date, unless the
Company defaults in making the payment due upon redemption.
To convert a Security, a Holder must (1) complete and sign a
conversion notice substantially in the form attached hereto, (2) surrender the
Security to a Conversion Agent, (3) furnish appropriate endorsements or transfer
documents if required by the Security Registrar or Conversion Agent and (4) pay
any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Security for conversion after the close of business on the Regular Record Date
for the payment of an installment of interest and prior to the opening of
business on the next Interest Payment Date, then, notwithstanding such
conversion, the interest payable on such Interest Payment Date will be paid to
the registered Holder of such Security on such Regular Record Date. In such
event, such Security, when surrendered for conversion, need not be accompanied
by payment of an amount equal to the interest payable on such Interest Payment
Date on the portion so converted. The number of shares issuable upon conversion
of a Security is determined by dividing the principal amount of the Security
converted by the Applicable Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The outstanding principal amount of any
Security shall be reduced by the portion of the principal amount thereof
converted into shares of Capital Stock.
14. Registration, Transfer, Exchange and Denominations. As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Security is registrable in the Security Register, upon
surrender of this Security for registration of transfer at the office or agency
of the Company in Cincinnati, Ohio, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and integral multiples thereof. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith. Prior to due presentment
of this Security for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name this
Security is registered as the owner hereof for all purposes, whether or not this
Security be overdue, and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary. In the event of redemption or
conversion of this Security in part only, a new Security or Securities for the
unredeemed or unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancelation hereof.
<PAGE> 103
7
15. Persons Deemed Owners. Except as provided in Section 3
hereof, the registered Holder of a Security may be treated as its owner
for all purposes.
16. Unclaimed Money. If money for the payment of principal or
interest remains unclaimed for two years, the Trustee and the Paying Agent shall
pay the money back to the Company at its written request. After that, holders of
Securities entitled to the money must look to the Company for payment unless an
abandoned property law designates another Person and all liability of the
Trustee and such Paying Agent with respect to such money shall cease.
17. Events of Default and Remedies. The Securities shall have
the Events of Default as set forth in Section 5.01 of the Indenture. Subject to
certain limitations in the Indenture, if an Event of Default occurs and is
continuing, the Trustee by notice to the Company or the holders of at least 25%
in aggregate principal amount of the Outstanding Securities by notice to the
Company and the Trustee may declare all amounts payable on the Securities
(including any Additional Payments) to be due and payable immediately; provided
that, if the Property Trustee is the sole Holder of the Security and if upon an
Event of Default, the Trustee or the holder of not less than 25% in aggregate
principal amount of the then outstanding Securities fail to declare the
principal of all the Securities to be immediately due and payable, the holders
of at least 25% in aggregate liquidation amount of Preferred Securities then
outstanding shall have such right by a notice in writing to the Company and the
Trustee; and upon any such declaration such principal and all accrued interest
shall become immediately due and payable; and provided further that the payment
of principal and interest on such Securities shall remain subordinated to the
extent provided in the Indenture.
In the case of an Event of Default, the holders of a majority
in principal amount of the Outstanding Securities by written notice to the
Trustee may rescind an acceleration and its consequences if the rescission would
not conflict with any judgment or decree and if all existing Events of Default
have been cured or waived except nonpayment of principal or interest that has
become due solely because of the acceleration.
Holders may not enforce the Indenture or the Securities except
as provided in the Indenture. Subject to certain limitations, holders of a
majority in principal amount of the then outstanding Securities issued under the
Indenture may direct the Trustee in its exercise of any trust or power. The
Company must furnish annually compliance certificates to the Trustee. The above
description of Events of Default and remedies is qualified by reference to, and
subject in its entirety by, the more complete description thereof contained in
the Indenture.
18. Amendments, Supplements and Waivers. The Indenture
permits, subject to the rights of the holders of Preferred Securities set forth
therein and in the Declaration and with certain other exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Company, and the rights of the Holders of the Securities
under the Indenture, at any time, by the Company and the Trustee with the
consent of the Holders of a majority in aggregate principal amount of the
Securities at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities at the time Outstanding, on behalf of the Holders of all the
Securities,
<PAGE> 104
8
subject to the rights of the holders of the Preferred Securities set forth
therein and in the Declaration, to waive compliance by the Company with certain
provisions of the Indenture and certain past defaults under the Indenture and
their consequences. Any such consent or waiver by the Holder of this Security
shall be conclusive and binding upon such Holder and upon all future Holders of
this Security and of any Security issued upon the registration of transfer
hereof or in exchange therefor or in lieu hereof, whether or not notation of
such consent or waiver is made upon this Security. The above description of
amendments, supplements and waivers is qualified by reference to, and subject in
its entirety, by the more complete description thereof contained in the
Indenture.
19. Trustee Dealings with the Company. The Trustee, in its
individual or any other capacity may become the owner or pledgee of the
Securities and may otherwise deal with the Company or an Affiliate with the same
rights it would have, as if it were not a Trustee, subject to certain
limitations provided for in the Indenture and in the Trust Indenture Act. Any
Agent may do the same with like rights.
20. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of, or by reason of such obligations or their
creation. Each Holder of the Securities by accepting a Security waives and
releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
21. Governing Law. THE INTERNAL LAWS OF THE STATE OF
DELAWARE SHALL GOVERN THE INDENTURE AND THE SECURITIES WITHOUT REGARD TO
CONFLICT OF LAW PROVISIONS THEREOF.
22. Authentication. The Securities shall not be valid
until authenticated by the manual signature of an authorized officer of the
Trustee or an authenticating agent.
23. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder of the Securities upon
written request and without charge a copy of the Indenture.
Request may be made to:
Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Attention of: Chief Financial Officer
<PAGE> 105
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to
_______________________________________________________________________________
(Insert assignee's social security or tax I.D. number)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Your Signature: ______________________________________________________
(Sign exactly as your name appears on the
other side of this Security)
Date: ____________________________
Signature Guarantee:(4) ______________________________________________
- --------
(4) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.)
<PAGE> 106
(TO BE ATTACHED TO GLOBAL SECURITIES)
SCHEDULE A
The initial principal amount of this Global Security shall be
$ . The following increases or decreases in the principal amount of this
Global Security have been made:
<TABLE>
<CAPTION>
Amount of in-
crease in Princi-
pal Amount of
this Global Secu- Amount of de- Principal Amount Signature of
rity including crease in Princi- of this Global authorized offi-
increase upon pal Amount of Security follow- cer of Trustee
exercise of over- this Global Secu- ing such decrease or Securities
Date Made allotment option rity or increase Custodian
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
</TABLE>
<PAGE> 107
ELECTION TO CONVERT
To: Chemed Corporation
The undersigned owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion below designated,
into Capital Stock of CHEMED CORPORATION in accordance with the terms of the
Indenture referred to in this Security, and directs that the shares issuable and
deliverable upon conversion, together with any check in payment for fractional
shares, be issued in the name of and delivered to the undersigned, unless a
different name has been indicated in the assignment below. If shares are to be
issued in the name of a person other than the undersigned, the undersigned will
pay all transfer taxes payable with respect thereto.
Date: ,
in whole __
Portions of Security to be
converted ($- or integral
multiples thereof):
$________________
________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and
Address, Including Zip Code, and
Social Security or Other Identifying
Number
________________________________________
________________________________________
________________________________________
Signature Guarantee: (5)
________________________________________
- --------
(5) (Signature must be guaranteed by an "eligible guarantor institution" that
is, a bank, stockbroker, savings and loan association or credit union meeting
the requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.)
<PAGE> 1
Exhibit (b)(4)
PREFERRED SECURITIES GUARANTEE AGREEMENT
Between
CHEMED CORPORATION
and
FIRSTAR BANK, NATIONAL ASSOCIATION
Dated as of January -, 2000
<PAGE> 2
2
CROSS-REFERENCE TABLE */
<TABLE>
<CAPTION>
Section of Trust Section of
Indenture Act of 1939 Guarantee Agreement
- --------------------- -------------------
<S> <C>
310(a)......................................................... 4.01(a)
310(b)......................................................... 4.01(c), 2.08
310(c)......................................................... Inapplicable
311(a)......................................................... 2.02(b)
311(b)......................................................... 2.02(b)
311(c)......................................................... Inapplicable
312(a)......................................................... 2.02(a)
312(b)......................................................... 2.02(b)
313 ......................................................... 2.03
314(a)......................................................... 2.04
314(b)......................................................... Inapplicable
314(c)......................................................... 2.05
314(d)......................................................... Inapplicable
314(e)......................................................... 1.01, 2.05, 3.02
314(f)......................................................... 2.01, 3.02
315(a)......................................................... 3.01(d)
315(b)......................................................... 2.07
315(c)......................................................... 3.01
315(d)......................................................... 3.01(d)
316(a)......................................................... 1.01, 2.06, 5.04
316(b)......................................................... 5.03
316(c)......................................................... 8.02
317(a)......................................................... Inapplicable
317(b)......................................................... Inapplicable
318(a)......................................................... 2.01(b)
318(b)......................................................... 2.01
318(c)......................................................... 2.01(a)
</TABLE>
- --------
*/ This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation................................ 2
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application.............................. 5
SECTION 2.02. Lists of Holders of Securities................................ 6
SECTION 2.03. Reports by the Guarantee Trustee.............................. 6
SECTION 2.04. Periodic Reports to Guarantee Trustee......................... 6
SECTION 2.05. Evidence of Compliance with Conditions Precedent.............. 6
SECTION 2.06. Events of Default; Waiver..................................... 7
SECTION 2.07. Event of Default; Notice...................................... 7
SECTION 2.08. Conflicting Interests......................................... 7
ARTICLE III
Powers, Duties and Rights of
Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee.................... 7
SECTION 3.02. Certain Rights of Guarantee Trustee........................... 9
SECTION 3.03. Not Responsible for Recitals or Issuance of Guarantee......... 12
</TABLE>
<PAGE> 4
2
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility................................ 12
SECTION 4.02. Appointment, Removal and Resignation of Guarantee Trustee..... 13
ARTICLE V
Guarantee
SECTION 5.01. Guarantee..................................................... 13
SECTION 5.02. Subordination................................................. 14
SECTION 5.03. Waiver of Notice and Demand................................... 14
SECTION 5.04. Obligations Not Affected...................................... 14
SECTION 5.05. Rights of Holders............................................. 15
SECTION 5.06. Guarantee of Payment.......................................... 16
SECTION 5.07. Subrogation................................................... 16
SECTION 5.08. Independent Obligations....................................... 16
SECTION 5.09. Conversion.................................................... 16
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions.................................... 17
SECTION 6.02. Ranking....................................................... 18
ARTICLE VII
Termination
SECTION 7.01. Termination................................................... 18
</TABLE>
<PAGE> 5
3
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation................................................... 18
SECTION 8.02. Indemnification............................................... 19
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns........................................ 19
SECTION 9.02. Amendments.................................................... 19
SECTION 9.03. Notices....................................................... 20
SECTION 9.04. Benefit....................................................... 21
SECTION 9.05. Governing Law................................................. 21
</TABLE>
<PAGE> 6
THIS PREFERRED SECURITIES GUARANTEE
AGREEMENT ("Guarantee"), dated as of January -, 2000,
is executed and delivered by CHEMED CORPORATION, a
Delaware corporation (the "Guarantor"), and Firstar
Bank, National Association, a United States banking
corporation, as trustee (the "Guarantee Trustee"),
for the benefit of the HOLDERS (as defined herein)
from time to time of the Preferred Securities (as
defined herein) of CHEMED CAPITAL TRUST, a Delaware
statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of , 2000, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing and offering for exchange (the "Exchange Offer") on the date
hereof up to 2,000,000 shares of convertible trust preferred securities, having
an aggregate stated liquidation amount of up to $54,000,000 designated the
Convertible Trust Preferred Securities (liquidation amount $27 per Preferred
Security) (the "Preferred Securities");
WHEREAS as incentive for the Holders to participate in the
Exchange Offer, the Guarantor desires irrevocably and unconditionally to agree,
to the extent set forth in this Guarantee, to pay on a subordinated basis to the
Holders the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
WHEREAS the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Guarantee for the benefit of the holders of the Common
Securities (as defined herein) except that if a Debenture Event of Default or a
Declaration Event of Default (each as defined herein) (or an event that, with
passage of time, would become such a Debenture Event of Default) shall have
occurred and be continuing, the rights of holders of the Common Securities to
receive Guarantee Payments under the Common Securities Guarantee are
subordinated to the rights of Holders to receive Guarantee Payments under this
Guarantee.
NOW, THEREFORE, in consideration of the purchase
by each Holder of Preferred Securities, which purchase the Guarantor hereby
agrees shall benefit the Guarantor, the
<PAGE> 7
2
Guarantor executes and delivers this Guarantee for the benefit of the Holders.
ARTICLE I
Definitions and Interpretation
SECTION 1.01. Definitions and Interpretation. In this
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.01; terms defined in the Declaration as at the date of
execution of this Guarantee have the same meaning when used in this
Guarantee unless otherwise defined in this Guarantee;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee unless otherwise defined in this
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Securities" means the convertible common securities
(liquidation amount $27 per common security)
<PAGE> 8
3
representing common undivided beneficial interests in the assets of the Issuer.
"Covered Person" means any Holder or beneficial
owner of Preferred Securities.
"Debenture Event of Default" means an Event of Default as
defined in the Indenture.
"Debentures" means the series of convertible junior
subordinated debt securities of the Guarantor designated the Convertible Junior
Subordinated Debentures Due 2030 held by the Property Trustee (as defined in the
Indenture) of the Issuer.
"Declaration Event of Default" means an Event of Default as
defined in the Declaration.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Guarantee; provided, however, that
except with respect to a default in payment of any Guarantee Payment, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions (as defined in the Declaration) that are required to be
paid on the Preferred Securities, to the extent that the Issuer shall have funds
on hand available therefor at such time, (ii) the applicable Redemption Price
(as defined in the Indenture) with respect to Preferred Securities called for
redemption by the Issuer, to the extent that the Issuer has funds on hand
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding up or liquidation of the Issuer (other than in connection
with the distribution of Debentures to the Holders or the redemption of all the
Preferred Securities), the lesser of (a) the aggregate liquidation amount
thereof plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution") to the extent the Issuer has
funds available therefor and (b) the amount of assets of the Issuer remaining
available for distribution to Holders upon liquidation of the Issuer after
satisfaction of liabilities to creditors of the Issuer as required by applicable
law.
<PAGE> 9
4
"Guarantee Trustee" means Firstar Bank, National Association
until a Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee and thereafter means each
such Successor Guarantee Trustee.
"Holder" means any holder, as registered on the books and
records of the Issuer of any outstanding Preferred Securities; provided,
however, that, in determining whether the holders of the requisite percentage in
liquidation amount of the Preferred Securities have given any request, notice,
consent or waiver hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives or agents of the Guarantee
Trustee.
"Indenture" means the Indenture dated as of January -, 2000,
among the Guarantor and Firstar Bank, National Association, as trustee, and any
indenture supplemental thereto, pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, Holder(s), voting
separately as a class, representing more than 50% of the stated aggregate
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities then outstanding.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman of the Board, President or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Controller, the Secretary or
an Assistant Secretary of such Person, and delivered to the Guarantee Trustee.
Any Officers' Certificate delivered with respect to compliance with a condition
or covenant provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
<PAGE> 10
5
(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.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Senior Debt" shall have the meaning set forth in
the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.01.
"Trust Indenture Act" means the Trust Indenture Act of 1939.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee, which are incorporated by reference
hereto, and shall, to the extent applicable, be governed by such provisions; and
<PAGE> 11
6
(b) If and to the extent that any provision of this Guarantee
limits, qualifies or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.02. Lists of Holders of Securities. (a) The
Guarantor shall provide the Guarantee Trustee (i) within 14 days after January 1
and June 30 of each year, commencing June 30, 2000, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date; provided that the Guarantor shall
not be obligated to provide such List of Holders at any time the List of Holders
does not differ from the most recent List of Holders given to the Guarantee
Trustee by the Guarantor, and (ii) at any other time, within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no more
than 14 days before such List of Holders is given to the Guarantee Trustee. The
Guarantee Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.03. Reports by the Guarantee Trustee. Within 60 days
after March 15 of each year, commencing March 15, 2000, the Guarantee Trustee
shall provide to the Holders of the Securities such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee, the Securities and Exchange
Commission and the Holders such documents, reports and information as required
by Section 314 (if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
SECTION 2.05. Evidence of Compliance with Conditions
Precedent. The Guarantor shall provide to the Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Guarantee
which relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate
<PAGE> 12
7
or opinion required to be given by an officer pursuant to Section 314(c)(1) may
be given in the form of an Officers' Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a
Majority in liquidation amount of the Preferred Securities may, by vote, on
behalf of the Holders of all of the Preferred Securities, waive any past Event
of Default and its consequences. Upon such waiver, any such Event of Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Guarantee, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any right consequent therefrom.
SECTION 2.07. Event of Default; Notice. (a) The Guarantee
Trustee shall, within 90 days after the occurrence of an Event of Default
actually known to the Guarantee Trustee, transmit by mail, first-class postage
prepaid, to the Holders, notices of all Events of Default known to the Guarantee
Trustee, unless such defaults have been cured before the giving of such notice;
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee, or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Guarantee Trustee shall have received written notice or a Responsible Officer
charged with the administration of the Declaration shall have obtained written
notice.
SECTION 2.08. Conflicting Interests. The Declaration shall be
deemed to be specifically described in this Guarantee for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
Powers, Duties and Rights of Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a)
This Guarantee shall be held by the Guarantee Trustee for the benefit of the
Holders, and the Guarantee
<PAGE> 13
8
Trustee shall not transfer this Guarantee to any Person except a Holder
exercising his or her rights pursuant to Section 5.05(d) or to a Successor
Guarantee Trustee on acceptance by such Successor Guarantee Trustee of its
appointment to act as Successor Guarantee Trustee. The right, title and interest
of the Guarantee Trustee shall automatically vest in any Successor Guarantee
Trustee, and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee, and no implied covenants shall be read into this Guarantee
against the Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.06), the Guarantee Trustee
shall exercise such of the rights and powers vested in it by this Guarantee, and
use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee, and the Guarantee Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee,
and no implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee
<PAGE> 14
9
may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Guarantee Trustee
and conforming to the requirements of this Guarantee; but in
the case of any such certificates or opinions that by any
provision hereof are specifically required to be furnished to
the Guarantee Trustee, the Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Preferred Securities, relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.01:
(i) the Guarantee Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
<PAGE> 15
10
(ii) any direction or act of the Guarantor contemplated by
this Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) whenever, in the administration of this Guarantee, the
Guarantee Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder,
the Guarantee Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
rely upon an Officers' Certificate which, upon receipt of such request,
shall be promptly delivered by the Guarantor;
(iv) the Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any
rerecording, refiling or reregistration thereof);
(v) the Guarantee Trustee may consult with legal counsel of
its selection, and the written advice or opinion of such legal counsel
with respect to legal matters shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with such
advice or opinion. Such legal counsel may be legal counsel to the
Guarantor or any of its Affiliates and may include any of the
Guarantor's employees. The Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Guarantee from any court of competent jurisdiction.
(vi) the Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee at
the request or direction of any Holder, unless such Holder shall have
provided to the Guarantee Trustee security and indemnity satisfactory
to the Guarantee Trustee against the costs, expenses (including
attorneys' fees and expenses) and liabilities that might be incurred by
it in complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee Trustee;
provided that nothing contained in this Section 3.02(a)(vi) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee;
(vii) the Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated
<PAGE> 16
11
in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Guarantee Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of any agent
or attorney appointed with due care by it hereunder;
(ix) any action taken by the Guarantee Trustee or its agents
hereunder shall bind the Holders, and the signature of the Guarantee
Trustee or its agents alone shall be sufficient and effective to
perform any such action; it being understood that no third party shall
be required to inquire as to the authority of the Guarantee Trustee to
so act or as to its compliance with any of the terms and provisions of
this Guarantee, both of which shall be conclusively evidenced by the
Guarantee Trustee's or its agent's taking such action; and
(x) whenever in the administration of this Guarantee the
Guarantee Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Guarantee Trustee (i) may request written instructions
from the Holders or, other than with respect to enforcing any remedy or
right or taking any action related thereto, the Guarantor, (ii) may
refrain from enforcing such remedy or right or taking such other action
until such written instructions are received, and (iii) shall be
protected in acting in accordance with such written instructions.
(b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
<PAGE> 17
12
SECTION 3.03. Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee; Eligibility. (a) There shall
at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.01(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.01(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 3.10(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 3.10(b) of the Trust Indenture Act.
<PAGE> 18
13
SECTION 4.02. Appointment, Removal and Resignation of
Guarantee Trustee. (a) Subject to Section 4.02(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 4.02(a) until a Successor Guarantee Trustee has been appointed and
has accepted such appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of an instrument of removal or resignation,
the Guarantee Trustee resigning or being removed may petition any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.02, the
Guarantor shall pay to the Guarantee Trustee all amounts accrued to the date of
such termination, removal or resignation.
ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and
unconditionally agrees to pay in full on a subordinated basis to the Holders the
Guarantee Payments (without duplication of amounts theretofore paid by or on
behalf of the Issuer), as and when due, in coin or currency
<PAGE> 19
14
of the United States of America which at the time of payment is legal tender for
payment of public and private debt regardless of any defense, right of setoff or
counterclaim that the Issuer may have or assert other than the defense of
payment. The Guarantor's obligation to make a Guarantee Payment may be satisfied
by direct payment of the required amounts by the Guarantor to the Holders or by
causing the Issuer to pay such amounts to the Holders.
SECTION 5.02. Subordination. If a Debenture Event of Default
or a Declaration Event of Default (or an event that, with passage of time, would
become a Debenture Event of Default) shall have occurred and be continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated to the rights of Holders to
receive Guarantee Payments under this Guarantee.
SECTION 5.03. Waiver of Notice and Demand. The Guarantor
hereby waives notice of acceptance of this Guarantee and of any liability to
which it applies or may apply, presentment, demand for payment, any right to
require a proceeding first against the Issuer or any other Person before
proceeding against the Guarantor, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 5.04. Obligations Not Affected. The obligations,
covenants, agreements and duties of the Guarantor under this Guarantee shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the
Preferred Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, the amount payable upon redemption
or the amount payable upon liquidation or any other sums payable under
the terms of the Preferred Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Debentures permitted by the
Indenture);
<PAGE> 20
15
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Preferred Securities, or any action on the part of the
Issuer granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in the
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.04 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders or any other
Person to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.05. Rights of Holders. The Guarantor expressly
acknowledges that:
(a) This Guarantee will be deposited with the Guarantee
Trustee to be held for the benefit of the Holders.
(b) The Guarantee Trustee has the right to enforce this
Guarantee on behalf of the Holders.
(c) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee.
<PAGE> 21
16
(d) Any Holder may institute a legal proceeding directly
against the Guarantor to enforce its rights under this Guarantee,
without first instituting a legal proceeding against the Issuer, the
Guarantee Trustee or any other Person.
SECTION 5.06. Guarantee of Payment. This Guarantee creates a
guarantee of payment and not of collection. This Guarantee will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts theretofore paid by the Issuer) or upon distribution of
Debentures to Holders as provided in the Declaration.
SECTION 5.07. Subrogation. The Guarantor shall be subrogated
to all (if any) rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Guarantee and shall
have the right to waive payment by the Issuer pursuant to Section 5.01;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Guarantee, if,
at the time of any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 5.08. Independent Obligations. The Guarantor
acknowledges that its obligations hereunder are independent of the obligations
of the Issuer with respect to the Preferred Securities, and that the Guarantor
shall be liable as principal and as debtor hereunder to make Guarantee Payments
pursuant to the terms of this Guarantee notwithstanding the occurrence of any
event referred to in subsections (a) through (g), inclusive, of Section 5.04
hereof.
SECTION 5.09. Conversion. The Guarantor acknowledges its
obligation to issue and deliver common stock upon the conversion of the
Preferred Securities.
<PAGE> 22
17
ARTICLE VI
Limitation of Transactions; Subordination
SECTION 6.01. Limitation of Transactions. So long as any
Preferred Securities remain outstanding, if there shall have occurred and be
continuing a Debenture Event of Default, a Declaration Event of Default or an
event that, with the giving of notice or the lapse of time or both, would
constitute a Debenture Event of Default or a Declaration Event of Default, or a
selection by the Guarantor of a Deferral Period as provided in the Indenture and
such period, or any extension thereof, shall be continuing, then (a) the
Guarantor shall not declare or pay any dividend on, or make any distribution
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock (other than stock dividends paid by the
Guarantor which stock dividends consist of the stock of the same class as that
on which the dividend is being paid), (b) the Guarantor shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Guarantor which rank pari passu with or
junior in interest to the Debentures and (c) shall not make any guarantee
payments with respect to any guarantee by the Guarantor of the debt securities
of any subsidiary of the Guarantor if such guarantee ranks pari passu with or
junior in interest to the Debentures (in each case, other than (A) dividends or
distributions in Common Stock, (B) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the issuance of stock
under any such plan in the future, or the redemption or repurchase of any such
rights pursuant thereto, (C) payments under this Guarantee, (D) purchases or
acquisitions of shares of the Common Stock in connection with the satisfaction
by the Guarantor of its obligations under any employee benefit plan or any other
contractual obligation of the Guarantor (other than a contractual obligation
ranking pari passu with or junior in interest to the Securities), (E) as a
result of a reclassification of the Guarantor's capital stock or the exchange or
conversion of one class or series of the Guarantor's capital stock for another
class or series of the Guarantor's capital stock or (F) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged).
<PAGE> 23
18
SECTION 6.02. Ranking. This Guarantee will constitute an
unsecured obligation of the Guarantor and will rank subordinate to all Senior
Debt of the Guarantor to the same extent that the Debentures are subordinated
pursuant to the Indenture.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Guarantee shall terminate upon
(i) full payment of the amount payable upon redemption of all Preferred
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Preferred Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders of all of the
Preferred Securities or (iii) full payment of the amounts payable in accordance
with the Declaration upon liquidation of the Issuer. Notwithstanding the
foregoing, this Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any Holder must restore payment of any sums
paid under the Preferred Securities or under this Guarantee.
ARTICLE VIII
Indemnification
SECTION 8.01. Exculpation. (a) No Indemnified Person shall be
liable, responsible or accountable in damages or otherwise to the Guarantor or
any Covered Person for any loss, damage or claim incurred by reason of any act
or omission performed or omitted by such Indemnified Person in good faith in
accordance with this Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Guarantee or by law, except that an Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.
(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
<PAGE> 24
19
behalf of the Guarantor, including information, opinions, reports or statements
as to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders might properly be paid.
SECTION 8.02. Indemnification. (a) The Guarantor agrees to
indemnify each Indemnified Person for, and to hold each Indemnified Person
harmless against, any and all loss, liability or expense including taxes (other
than taxes based on the income of such Indemnified Person) incurred without
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder, including the
costs and expenses (including reasonable legal fees and expenses) of defending
itself against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The obligation
to indemnify as set forth in this Section 8.02 shall survive the termination of
this Guarantee.
(b) To the fullest extent permitted by applicable law,
expenses (including legal fees and expenses) incurred by an Indemnified Person
in defending any claim, demand, action, suit or proceeding shall, from time to
time, be advanced by the Guarantor prior to the final disposition of such claim,
demand, action, suit or proceeding upon receipt by the Guarantor of an
undertaking by or on behalf of the Indemnified Person to repay such amount if it
shall be determined that the Indemnified Person is not entitled to be
indemnified as authorized in Section 8.02(a).
(c) No Indemnified Person shall claim or exact any lien or
charge on any Guarantee Payments as a result of any amount due to it under this
Guarantee.
ARTICLE IX
Miscellaneous
SECTION 9.01. Successors and Assigns. All guarantees and
agreements contained in this Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders.
SECTION 9.02. Amendments. Except with respect to any changes
that do not adversely affect the rights of Holders (in which case no consent of
Holders will be required), this Guarantee may only be amended with the prior
<PAGE> 25
20
approval of the Holders of a majority in liquidation amount of the Preferred
Securities then outstanding. The provisions of Section 12.02 of the Declaration
with respect to meetings of holders of the Securities (as defined in the
Declaration) apply to the giving of such approval.
SECTION 9.03. Notices. All notices provided for in this
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first-class mail, as follows:
(a) if given to the Issuer, in care of the Regular Trustees at
the Issuer's mailing address set forth below (or such other address as
the Issuer may give notice):
Kevin J. McNamara
Timothy F. O'Toole
Sandra Laney
Chemed Capital Trust
c/o Chemed Corporation
2600 Chemed Center
Cincinnati, Ohio 45202-4726
Attention: Treasurer
(b) If given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders):
Firstar Bank, National Association
425 Walnut Street
6th Floor
Cincinnati, OH 45202
Attention: Keith A. Maurmeier
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders):
Chemed Corporation
2600 Chemed Center
Cincinnati, Ohio 45202-4726
Attention: Treasurer
(c) If given to any Holder, at the address set forth on the
books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid
<PAGE> 26
21
except that if a notice or other document is refused delivery or cannot be
delivered because of a changed address of which no notice was given, such notice
or other document shall be deemed to have been delivered on the date of such
refusal or inability to deliver.
SECTION 9.04. Benefit. This Guarantee is solely for the
benefit of the Holders and, subject to Section 3.01(a), is not separately
transferable from the Preferred Securities.
SECTION 9.05. Governing Law. THIS PREFERRED SECURITIES
GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF DELAWARE AND OF THE UNITED
STATES DISTRICT COURTS LOCATED IN THE STATE OF DELAWARE FOR ANY LAWSUITS, CLAIMS
OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT AND AGREE NOT
TO COMMENCE ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING EXCEPT IN SUCH COURTS.
THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO
THE LAYING OF VENUE OF ANY LAWSUIT, CLAIM, OR OTHER PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT IN THE COURTS OF THE STATE OF DELAWARE OR THE UNITED
STATES DISTRICT COURTS LOCATED IN THE STATE OF DELAWARE, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
CHEMED CORPORATION, as
Guarantor,
by ___________________________________
Name:
Title:
FIRSTAR BANK, NATIONAL
ASSOCIATION, as Guarantee
Trustee,
by
____________________________________
Name:
Title:
<PAGE> 1
EXHIBIT (b)(5)
COMMON SECURITIES GUARANTEE AGREEMENT
Between
CHEMED CORPORATION
and
FIRSTAR BANK, NATIONAL ASSOCIATION
Dated as of January -, 2000
<PAGE> 2
COMMON SECURITIES GUARANTEE AGREEMENT
This COMMON SECURITIES GUARANTEE AGREEMENT (the "Common
Securities Guarantee"), dated as of January -, 2000, is executed and delivered
by Chemed Corporation, a Delaware corporation (the "Guarantor"), for the benefit
of the Holders (as defined herein) from time to time of the Common Securities
(as defined in the Declaration (as defined herein)) of Chemed Capital Trust, a
Delaware business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of January -, 2000, among the Trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof up to 2,000,000 Common Securities, having
an aggregate stated liquidation amount of up to $54,000,000, designated the
Convertible Common Securities (liquidation amount $27 per each of the
Convertible Common Securities);
WHEREAS as incentive for the Holders to purchase the Common
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Common Securities Guarantee, to pay on a
subordinated basis to the Holders of the Common Securities the Guarantee
Payments (as defined herein) and to make certain other payments on the terms and
conditions set forth herein; and
WHEREAS the Guarantor is also executing and delivering a
guarantee agreement in substantially identical terms to this Common Securities
Guarantee for the benefit of the holders of the Preferred Securities (the
"Guarantee") except that if a Debenture Event of Default or a Declaration Event
of Default (each as defined herein) (or an event that, with passage of time,
would become a Debenture Event of Default) shall have occurred and be
continuing, the rights of Holders of the Common Securities to receive Guarantee
Payments under this Common Securities Guarantee are subordinated to the rights
of holders of Preferred Securities to receive Guarantee Payments under the
Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Common Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Common
Securities Guarantee for the benefit of the Holders.
<PAGE> 3
2
ARTICLE I
SECTION 1.01. In this Common Securities Guarantee, unless the
context otherwise requires, the terms set forth below shall have the following
meanings.
(a) capitalized terms used in this Common Securities Guarantee
but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01 or the Guarantee;
(b) terms defined in the Declaration as at the date of
execution of this Common Securities Guarantee have the same meaning
when used in this Common Securities Guarantee unless otherwise defined
in this Common Securities Guarantee or in the Guarantee;
(c) a term defined anywhere in this Common Securities
Guarantee has the same meaning throughout;
(d) all references to "the Common Securities Guarantee" or
"this Common Securities Guarantee" are to this Common Securities
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Common Securities Guarantee to
Articles and Sections are to Articles and Sections of this Common
Securities Guarantee unless otherwise specified; and
(f) a reference to the singular includes the plural and vice
versa.
"Debenture Event of Default" means an Event of Default under
the Indenture.
"Declaration Event of Default" means an Event of Default under
the Declaration.
"Guarantee Payments" shall mean the following payments or
distributions, without duplication, with respect to the Common Securities, to
the extent not paid or made by or on behalf of the Issuer: (i) any accrued and
unpaid Distributions which are required to be paid on such Common Securities, to
the extent that the Issuer shall have funds on hand available therefor at such
time, (ii) the applicable Redemption Price (as defined in the Indenture) with
respect to any Common Securities called for redemption by the Issuer, to the
extent that the Issuer has funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding up or liquidation of
the
<PAGE> 4
3
Issuer (other than in connection with the distribution of Debentures to the
Holders or the redemption of all the Common Securities), the lesser of (a) the
aggregate liquidation amount thereof plus accrued and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution") to the extent the Issuer has funds available therefor and (b) the
amount of assets of the Issuer remaining available for distribution to Holders
upon liquidation of the Issuer after satisfaction of liabilities to creditors of
the Issuer as required by applicable law.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any outstanding Common Securities.
"Senior Debt" shall have the meaning set forth in the
Indenture.
ARTICLE II
SECTION 2.01. The Guarantor irrevocably and unconditionally
agrees to pay in full on a subordinated basis to the Holders the Guarantee
Payments (without duplication of amounts theretofore paid by or on behalf of the
Issuer), as and when due, in coin or currency of the United States of America
which at the time of payment is legal tender for payment of public and private
debt regardless of any defense, right of set-off or counterclaim which the
Issuer may have or assert other than the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
SECTION 2.02. If a Debenture Event of Default or a Declaration
Event of Default (or an event that, with passage of time, would become a
Debenture Event of Default) shall have occurred and be continuing, the rights of
Holders of the Common Securities to receive Guarantee Payments under this Common
Securities Guarantee are subordinated to the rights of holders of Preferred
Securities to receive Guarantee Payments under the Guarantee.
SECTION 2.03. The Guarantor hereby waives notice of acceptance
of this Common Securities Guarantee and of any liability to which it applies or
may apply, presentment, demand for payment, any right to require a proceeding
first against the Issuer or any other Person before proceeding against the
Guarantor, protest, notice of nonpayment, notice
<PAGE> 5
4
of dishonor, notice of redemption and all other notices and demands.
SECTION 2.04. The obligations, covenants, agreements and
duties of the Guarantor under this Common Securities Guarantee shall in no way
be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Common
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, the amount payable upon
redemption, Liquidation Distribution or any other sums payable under
the terms of the Common Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with, the Common Securities (other than an extension of time
for payment of Distributions, that results from the extension of any
interest payment period on the Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Common Securities, or any action on the part of the Issuer
granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(e) any invalidity of, or defect or deficiency in the Common
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this
<PAGE> 6
5
Section 2.04 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders or any other
Persons to give notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 2.05. The Guarantor expressly acknowledges that any
Holder of Common Securities may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Common Securities Guarantee,
without first instituting a legal proceeding against the Issuer or any other
Person.
SECTION 2.06. This Common Securities Guarantee creates a
guarantee of payment and not of collection. This Common Securities Guarantee
will not be discharged except by payment of the Guarantee Payments in full
(without duplication of amounts theretofore paid by the Issuer) or upon
distribution of Debentures to Holders as provided in the Declaration.
SECTION 2.07. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
such Holders by the Guarantor under this Common Securities Guarantee and shall
have right to waive payment by the Issuer pursuant to Section 2.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights which
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Common Securities
Guarantee, if, at the time of any such payment, any amounts are due and unpaid
under this Common Securities Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Holders.
SECTION 2.08. The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with respect to the
Common Securities and that the Guarantor shall be liable as principal and as
debtor hereunder to make Guarantee Payments pursuant to the terms of this Common
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 2.04 hereof.
<PAGE> 7
6
SECTION 2.09. The Guarantor acknowledges its obligation to
issue and deliver shares of its common stock upon the conversion of the Common
Securities.
ARTICLE III
SECTION 3.01. So long as any Common Securities remain
outstanding, if (i) there shall have occurred and be continuing a Debenture
Event of Default, a Declaration Event of Default or an event that, with the
giving of notice or the lapse of time or both, would constitute a Debenture
Event of Default or a Declaration Event of Default or (ii) a selection by the
Guarantor of a Deferral Period as provided in the Indenture and such period, or
any extension thereof, shall be continuing, then (a) the Guarantor shall not
declare or pay any dividend on, or make any distributions with respect to, or
redeem, purchase, acquire or make a liquidation payment with respect to, any of
its capital stock (other than stock dividends paid by the Guarantor which
consist of the stock of the same class as that on which the dividend is being
paid), (b) the Guarantor shall not make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Guarantor which rank pari passu with or junior in interest to the Debentures
and (c) shall not make any guarantee payments with respect to any guarantee by
the Guarantor of the debt securities of any subsidiary of the Guarantor if such
guarantee ranks pari passu with or junior in interest to the Debentures (in each
case, other than (A) dividends or distributions in Common Stock, (B) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (C)
payments under the Guarantee, (D) purchases or acquisitions of shares of the
Common Stock in connection with the satisfaction by the Guarantor of its
obligations under any employee benefit plan or any other contractual obligation
of the Guarantor (other than a contractual obligation ranking pari passu with or
junior in interest to the Securities), (E) as a result of a reclassification of
the Guarantor's capital stock or the exchange or conversion of one class or
series of the Guarantor's capital stock for another class or series of the
Guarantor's capital stock or (F) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged).
<PAGE> 8
7
SECTION 3.02. This Common Securities Guarantee will constitute
an unsecured obligation of the Guarantor and will rank subordinate to all Senior
Debt of the Guarantor to the same extent that the Debentures (as defined in the
Indenture) are subordinated pursuant to the Indenture.
ARTICLE IV
SECTION 4.01. This Common Securities Guarantee shall terminate
upon (i) full payment of the amount payable upon redemption of the Common
Securities, (ii) the distribution of the Guarantor's common stock to the Holders
in respect of the conversion of the Common Securities into the Guarantor's
common stock or the distribution of the Debentures to the Holders in exchange
for all of the Common Securities or (iii) full payment of the amounts payable in
accordance with the Declaration upon liquidation of the Issuer. Notwithstanding
the foregoing, this Common Securities Guarantee will continue to be effective or
will be reinstated, as the case may be, if at any time any Holder of Common
Securities must restore payment of any sums paid under the Common Securities or
under this Common Securities Guarantee.
ARTICLE V
SECTION 5.01. All guarantees and agreements contained in this
Common Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders.
SECTION 5.02. Except with respect to any changes which do not
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Common Securities Guarantee may only be amended with the
prior approval of the Holders of a majority in liquidation amount of the
outstanding Common Securities. The provisions of Section 12.02 of the
Declaration with respect to meetings of Holders of the Securities apply to the
giving of such approval.
SECTION 5.03. All notices provided for in this Common
Securities Guarantee shall be in writing, duly signed by the party giving such
notice, and shall be delivered, telecopied or mailed by registered or certified
mail, as follows:
<PAGE> 9
8
(a) if given to the Issuer, in care of the Regular
Trustees at the Issuer's mailing address set forth
below (or such other address as the Issuer may give
notice of to the Holders of the Common Securities):
Kevin J. McNamara
Timothy F. O'Toole
Sandra Laney
Chemed Capital Trust
c/o Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Attention: Treasurer
(b) if given to the Guarantor, at the Guarantor's mailing
address set forth be low (or such other address as
the Guarantor may give notice of to the Holders of
the Common Securities):
Chemed Corporation
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
Attention: Treasurer
(c) if given to any Holder of Common Securities, at the
address set forth on the books and records of the
Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 5.04. This Common Securities Guarantee is solely for
the benefit of the Holders and is not separately transferable from the Common
Securities.
SECTION 5.05. THIS COMMON SECURITIES GUARANTEE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY CONSENT TO SUBMIT TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF DELAWARE AND OF
<PAGE> 10
9
THE UNITED STATES DISTRICT COURTS LOCATED IN THE STATE OF DELAWARE FOR ANY
LAWSUITS, CLAIMS OR OTHER PROCEEDINGS ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND AGREE NOT TO COMMENCE ANY SUCH LAWSUIT, CLAIM OR OTHER PROCEEDING
EXCEPT IN SUCH COURTS. THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY LAWSUIT, CLAIM, OR OTHER
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN THE COURTS OF THE
STATE OF DELAWARE OR THE UNITED STATES DISTRICT COURTS LOCATED IN THE STATE OF
DELAWARE, AND HEREBY FURTHER IRREVOCABLY AND UNCONDITIONALLY WAIVE AND AGREE NOT
TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH LAWSUIT, CLAIM OR OTHER
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
<PAGE> 11
THIS COMMON SECURITIES GUARANTEE is executed as of the day and
year first above written.
CHEMED CORPORATION, as Guarantor
By: _______________________________
Name:
Title:
FIRSTAR BANK, NATIONAL ASSOCIATION,
as Guarantee Trustee,
By: _______________________________
Name:
Title:
<PAGE> 12
TABLE OF CONTENTS
Page
----
ARTICLE I
SECTION 1.01............................................................. 2
ARTICLE II
SECTION 2.01............................................................. 3
SECTION 2.02............................................................. 3
SECTION 2.03............................................................. 3
SECTION 2.04............................................................. 4
SECTION 2.05............................................................. 5
SECTION 2.06............................................................. 5
SECTION 2.07............................................................. 5
SECTION 2.08............................................................. 5
SECTION 2.09............................................................. 6
ARTICLE III
SECTION 3.01............................................................. 6
SECTION 3.02............................................................. 7
ARTICLE IV
SECTION 4.01............................................................. 7
ARTICLE V
SECTION 5.01............................................................. 7
SECTION 5.02............................................................. 7
SECTION 5.03............................................................. 7
SECTION 5.04............................................................. 8
SECTION 5.05............................................................. 8
<PAGE> 1
Exhibit (d)
[Letterhead of]
CRAVATH, SWAINE & MOORE
December 23, 1999
Offer to Exchange Convertible Trust Preferred Securities of
Chemed Capital Trust for up to 2,000,000 Shares of Capital
Stock of Chemed Corporation
Ladies and Gentlemen:
We have acted as special counsel for Chemed Corporation (the
"Company") and Chemed Capital Trust (the "Trust") in connection with the offer
by the Company and the Trust (the "Exchange Offer") to exchange the Trust's
Convertible Trust Preferred Securities (the "Preferred Securities") for up to
2,000,000 outstanding shares (the "Shares") of Capital Stock, par value $1 per
Share, of the Company. In connection therewith, we have prepared the discussion
set forth under the caption "U.S. Federal Income Tax Considerations" (the
"Discussion") in the Offering Circular (the "Offering Circular") that is part of
the Issuer Tender Offer Statement on Schedule 13E-4 dated December 23, 1999 (the
"Schedule 13E-4"), filed by the Company and the Trust with the Securities and
Exchange Commission.
In rendering our opinion, we have examined the form of Amended
and Restated Declaration of Trust of Chemed Capital Trust dated as of January ,
2000 (the "Declaration") included as an Exhibit to the Schedule 13E-4, and have
assumed that the Trustees will conduct the affairs of the Trust in accordance
with the Declaration. We hereby confirm that, in our opinion, the Discussion
accurately sets forth a summary of the material U.S. Federal income tax
consequences of the exchange of Shares for Preferred Securities pursuant to the
Exchange Offer, and of the ownership and disposition of the Preferred
Securities.
<PAGE> 2
2
We hereby consent to the filing of this opinion as an exhibit
to the Schedule 13E-4 and to the use of our name under the caption in the
Offering Circular. The issuance of such consent does not concede that we are an
"expert" for the purposes of the Securities Act of 1933.
Very truly yours,
/s/ Cravath, Swaine & Moore
Cravath, Swaine & Moore
Chemed Corporation
Chemed Capital Trust
2600 Chemed Center
255 East Fifth Street
Cincinnati, Ohio 45202-4726
