<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 17, 1996
REGISTRATION NO. 33-63227
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 2
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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<TABLE>
<S> <C> <C>
TEXTRON INC. DELAWARE 05-0315468
TEXTRON CAPITAL I DELAWARE TO BE APPLIED FOR
TEXTRON CAPITAL II DELAWARE TO BE APPLIED FOR
TEXTRON CAPITAL III DELAWARE TO BE APPLIED FOR
TEXTRON FINANCE, L.P. DELAWARE TO BE APPLIED FOR
(EXACT NAME OF REGISTRANT AS (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
SPECIFIED IN ITS CHARTER) INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
</TABLE>
------------------------
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND 02903
(401) 421-2800
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF EACH REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
MICHAEL D. CAHN
ASSISTANT GENERAL COUNSEL -- CORPORATE
AND ASSISTANT SECRETARY
TEXTRON INC.
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND 02903
(401) 421-2800
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE FOR EACH REGISTRANT)
------------------------
COPIES TO:
LOUIS A. GOODMAN
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
ONE BEACON STREET
BOSTON, MA 02108
(617) 573-4800
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: From time to
time after the effective date of the Registration Statement, as determined by
market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended (the "Securities Act"), other than securities offered only in
connection with dividend or interest reinvestment plans, please check the
following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. /X/
(Cover continued on next page.)
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.
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<PAGE> 2
(Continued from previous page.)
<TABLE>
<CAPTION>
==========================================================================================================
PROPOSED
MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT (1)(2)(3) PRICE (1)(2)(3) FEE (2)
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<S> <C> <C> <C> <C>
Preferred Securities of Textron
Capital I.....................
Preferred Securities of Textron
Capital II....................
Preferred Securities of Textron
Capital III...................
Preferred Securities of Textron
Finance, L.P..................
Senior Debt Securities of
Textron Inc...................
Subordinated Debt Securities of
Textron Inc...................
Junior Subordinated Debt
Securities of Textron Inc.....
Guarantees of Preferred
Securities of Textron Capital
I, Textron Capital II and
Textron Capital III by Textron
Inc. (4)......................
Guarantee of Preferred
Securities of Textron Finance,
L.P. by Textron Inc. (4)......
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Total........................... $800,000,000 100% $800,000,000 $275,862.07
==========================================================================================================
<FN>
(1) Such indeterminate number of Preferred Securities of Textron Capital I,
Textron Capital II, Textron Capital III and Textron Finance, L.P. and such
indeterminate principal amount of Senior Debt Securities, Subordinated Debt
Securities or Junior Subordinated Debt Securities of Textron Inc. as may
from time to time be issued at indeterminate prices. Junior Subordinated
Debt Securities may be issued and sold to Textron Capital I, Textron Capital
II, Textron Capital III and Textron Finance, L.P., in which event such
Junior Subordinated Debt Securities may later be distributed to the holders
of Preferred Securities upon a dissolution of Textron Capital I, Textron
Capital II, Textron Capital III and Textron Finance, L.P. and the
distribution of the assets thereof.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate public offering price of the Preferred
Securities of Textron Capital I, Textron Capital II, Textron Capital III and
Textron Finance, L.P. and the Senior Debt Securities, Subordinated Debt
Securities or Junior Subordinated Debt Securities of Textron Inc. registered
will not exceed $800,000,000.
(3) Exclusive of accrued interest and distributions, if any.
(4) Includes back-up undertakings, consisting of obligations by Textron Inc. to
provide certain indemnities in respect of, and pay and be responsible for
certain expenses, costs, liabilities, and debts of, as applicable, Textron
Capital I, Textron Capital II, Textron Capital III and Textron Finance,
L.P., as set forth in the Amended and Restated Declaration of Trust, the
Subordinated Indenture and Supplemental Indentures thereto, in each case as
further described in the Registration Statement. No separate consideration
will be received for any Guarantees or any back-up undertakings.
</TABLE>
Pursuant to Rule 429 under the Securities Act of 1933, as amended, the
prospectus included in this Registration Statement also relates to the remaining
unsold $210,985,000 principal amount of debt securities previously registered by
Textron Inc. under its Registration Statement on Form S-3 (File No. 33-46501).
<PAGE> 3
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 17, 1996
PROSPECTUS
$1,010,985,000
TEXTRON INC.
SENIOR DEBT SECURITIES, SUBORDINATED DEBT
SECURITIES AND JUNIOR SUBORDINATED DEBT SECURITIES
------------------------
TEXTRON CAPITAL I
TEXTRON CAPITAL II
TEXTRON CAPITAL III
TEXTRON FINANCE, L.P.
PREFERRED SECURITIES GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TEXTRON INC.
------------------------
Textron Inc. ("Textron"), a Delaware corporation, may offer, from time to
time, its (i) unsecured senior debt securities (the "Senior Debt Securities"),
(ii) unsecured subordinated debt securities (the "Subordinated Debt Securities")
or (iii) unsecured junior subordinated debt securities (the "Junior Subordinated
Debt Securities"), each consisting of debentures, notes or other evidences of
indebtedness (item (i), (ii) or (iii) above being referred to herein as the
"Debt Securities"), or any combination of the foregoing, in each case in one or
more series and in amounts, at prices and on terms to be determined at or prior
to the time of any such offering. Textron's obligations under the Subordinated
Debt Securities and the Junior Subordinated Debt Securities will be subordinate
and junior in right of payment to certain other senior indebtedness of Textron
as described herein or as may be described in an accompanying Prospectus
Supplement (the "Prospectus Supplement").
Textron Capital I, Textron Capital II and Textron Capital III (each, a
"Textron Trust" and, together, the "Textron Trusts"), each a statutory business
trust formed under the laws of the State of Delaware, may offer, from time to
time, preferred securities, representing undivided beneficial interests in the
assets of the respective Textron Trust ("Trust Preferred Securities") with the
payment of periodic cash distributions ("distributions") and payments on
liquidation, redemption or otherwise of such Trust Preferred Securities
guaranteed (each, a "Trust Guarantee") on a subordinated basis by Textron to the
extent described herein. See "Description of Trust Guarantees." Textron Finance,
L.P. ("Textron Partnership"), a limited partnership formed under the laws of the
State of Delaware, may offer, from time to time, its preferred securities
("Partnership Preferred Securities") in one or more series with the payment of
distributions and payments on liquidation, redemption or otherwise guaranteed
(the "Partnership Guarantee") on a subordinated basis by Textron to the extent
described herein. See "Description of Partnership Guarantee." Textron's
obligations under the Trust Guarantees will rank pari passu with its obligations
under the Partnership Guarantee and the senior most preferred or preference
stock of Textron. See "Description of Trust Guarantees -- Status of Trust
Guarantees" and "Description of Partnership Guarantee -- Status of Partnership
Guarantee." Junior Subordinated Debt Securities may be issued and sold from time
to time in one or more series by Textron to (i) a Textron Trust, or a trustee of
such trust, in connection with the investment of the proceeds from the offering
of Trust Preferred Securities, (ii) Textron Partnership in connection with the
investment of the proceeds from the offering of Partnership Preferred Securities
or (iii) other purchasers, including the general public.
Specific terms of the Debt Securities of any series, the Trust Preferred
Securities of any Textron Trust or the Partnership Preferred Securities in
respect of which this Prospectus is being delivered (the "Offered Securities")
will be set forth in a Prospectus Supplement with respect to such Offered
Securities, which will describe, without limitation and where applicable, the
following: (i) in the case of Debt Securities, the specific designation,
aggregate principal amount, denomination, maturity, premium, if any, redemption
or sinking fund provisions, if any, interest rate (which may be fixed or
variable), if any, the time and method of calculating interest payments, if any,
dates on which premium, if any, and interest, if any, will be payable, the
currency in which principal of, premium, if any, and interest, if any, on the
Debt Securities will be payable, the right of Textron, if any, to defer payment
of interest on the Junior Subordinated Debt Securities and the maximum length of
such deferral period, the initial public offering price, subordination terms,
and any listing on a securities exchange and other specific terms of the
offering of Debt Securities, and (ii) in the case of Trust Preferred Securities
and Partnership Preferred Securities (collectively, the "Preferred Securities"),
the designation, number of securities, liquidation preference per security,
initial public offering price, any listing on a securities exchange,
distribution rate (or method of calculation thereof), dates on which
distributions shall be payable and dates from which distributions shall accrue,
any voting rights, any redemption or sinking fund provisions, any other rights,
preferences, privileges, limitations or restrictions relating to the Preferred
Securities and the terms upon which the proceeds of the sale of the Preferred
Securities shall be used to purchase a specific series of Junior Subordinated
Debt Securities of Textron. If so specified in the applicable Prospectus
Supplement, Offered Securities may be issued in whole or in part in the form of
one or more temporary or permanent global securities.
The Offered Securities may be offered in amounts, at prices and on terms to
be determined at the time of offering; provided, however, that the aggregate
initial public offering price of all Offered Securities shall not exceed
$1,010,985,000 (or (i) its equivalent (based on the applicable exchange rate at
the time of sale) if Debt Securities are issued with principal amounts
denominated in one or more foreign currencies or currency units as shall be
designated by Textron, or (ii) such greater amount, if Debt Securities are
issued at an original issue discount, as shall result in aggregate proceeds of
$1,010,985,000). Any Prospectus Supplement relating to any series of Offered
Securities will contain information concerning certain United States federal
income tax considerations, if applicable, to the Offered Securities.
Textron, any of the Textron Trusts or Textron Partnership may sell the
Offered Securities directly, through agents designated from time to time or
through underwriters or dealers. See "Plan of Distribution." If any agents of
Textron, each of the Textron Trusts or Textron Partnership or any underwriters
or dealers are involved in the sale of the Offered Securities, the names of such
agents, underwriters or dealers and any applicable commissions and discounts
will be set forth in any related Prospectus Supplement.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE COMMISSIONER OF
INSURANCE FOR THE STATE OF NORTH CAROLINA, NOR HAS THE COMMISSIONER OF
INSURANCE RULED UPON THE ACCURACY OR THE ADEQUACY OF
THIS DOCUMENT.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF SECURITIES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
THE DATE OF THIS PROSPECTUS IS JANUARY , 1996.
<PAGE> 4
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY ACCOMPANYING PROSPECTUS
SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TEXTRON, ANY OF THE TEXTRON TRUSTS
OR TEXTRON PARTNERSHIP, OR ANY UNDERWRITER, AGENT OR DEALER. NEITHER THE
DELIVERY OF THIS PROSPECTUS AND ANY PROSPECTUS SUPPLEMENT NOR ANY SALE MADE
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCE, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF TEXTRON, ANY OF THE TEXTRON TRUSTS OR TEXTRON
PARTNERSHIP SINCE THE DATE THEREOF. THIS PROSPECTUS AND ANY PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO
WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION.
------------------------
AVAILABLE INFORMATION
This Prospectus constitutes a part of a registration statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") filed by Textron, each of the Textron Trusts and Textron Partnership
with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
Offered Securities. This Prospectus does not contain all of the information set
forth in such Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. Reference is made
to such Registration Statement and to the exhibits relating thereto for further
information with respect to Textron, the Textron Trusts, Textron Partnership and
the Offered Securities. Any statements contained herein concerning the
provisions of any document filed as an exhibit to the Registration Statement or
otherwise filed with the Commission or incorporated by reference herein are not
necessarily complete, and, in each instance, reference is made to the copy of
such document so filed for a more complete description of the matter involved.
Each such statement is qualified in its entirety by such reference.
Textron is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information concerning
Textron can be inspected and copied at prescribed rates at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the following Regional Offices of the Commission: 7 World
Trade Center, New York, New York 10048; and Citicorp Center, 500 W. Madison St.,
Chicago, Illinois 60661-2511. Copies of such material can be obtained from the
Public Reference Section of the Commission, at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Such reports, proxy statements and
other information can also be inspected at the office of the New York Stock
Exchange, Inc. on which Textron common stock is traded, at 20 Broad Street, New
York, New York 10005.
No separate financial statements of the Textron Trusts or Textron
Partnership have been included or incorporated by reference herein. Textron does
not consider that such financial statements would be material to holders of the
Preferred Securities because (i) all of the voting securities of the Textron
Trusts and Textron Partnership will be owned, directly or indirectly, by
Textron, a reporting company under the Exchange Act, (ii) the Textron Trusts and
Textron Partnership have no independent operations but exist for the sole
purpose of issuing securities representing undivided beneficial interests in
their respective assets and investing the proceeds thereof in Junior
Subordinated Debt Securities issued by Textron, (iii) the obligations of the
Textron Trusts under the Trust Preferred Securities are fully and
unconditionally guaranteed by Textron to the extent that the respective Textron
Trust has funds available to meet such obligations, and (iv) the obligations of
Textron Partnership under the Partnership Preferred Securities are fully and
unconditionally guaranteed by Textron to the extent Textron Partnership has
funds legally available to meet such obligations. See "Description of Debt
Securities," "Description of Trust Guarantees" and "Description of Partnership
Guarantee."
2
<PAGE> 5
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by Textron (File No. 1-5480) with the
Commission pursuant to the Exchange Act are incorporated by reference herein and
made a part hereof:
(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1994;
and
(b) Quarterly Reports on Form 10-Q for the fiscal quarters ended April 1,
July 1 and September 30, 1995.
All documents filed by Textron pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date hereof and prior to the
termination of the offering of the Offered Securities pursuant hereto shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained herein
or in a document incorporated or deemed to be incorporated by reference herein
or in any Prospectus Supplement shall be deemed to be modified or superseded for
purposes of this Prospectus, or in any Prospectus Supplement, to the extent that
a statement contained herein or therein (or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or
therein) 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 Prospectus or any Prospectus Supplement.
Textron undertakes to provide, without charge, to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
such person, a copy of any or all of the foregoing documents incorporated herein
by reference, other than exhibits to such documents, unless such exhibits are
specifically incorporated by reference into such documents. Such requests should
be directed to: Corporate Communications Department, Textron Inc., 40
Westminster Street, Providence, Rhode Island 02903, telephone (401) 421-2800.
3
<PAGE> 6
TEXTRON INC.
Textron is a global, multi-industry company with operations in six business
segments: Aircraft, Automotive, Industrial, Systems and Components, Finance and
Paul Revere insurance. Textron's products and services include Bell helicopters,
Cessna aircraft, Speidel watchbands, Avco Financial Services, E-Z-GO golf cars,
Jacobsen lawn and turf care equipment and disability insurance provided by The
Paul Revere Corporation.
Textron's corporate office is located at 40 Westminster Street, Providence,
Rhode Island 02903; its telephone number is (401) 421-2800.
TEXTRON TRUSTS
Each of the Textron Trusts is a statutory business trust formed under
Delaware law pursuant to (i) a declaration of trust (the "Declaration") executed
by Textron, as sponsor for such trust (the "Sponsor"), and the trustees of such
trusts and (ii) the filing of a certificate of trust with the Secretary of State
of the State of Delaware on October 4, 1995. Each of the Textron Trusts exists
for the exclusive purposes of (i) issuing the Trust Preferred Securities and
common securities representing undivided beneficial interests in the assets of
the Trust (the "Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities"), (ii) investing the gross proceeds from the
sale of the Trust Securities in the Junior Subordinated Debt Securities and
(iii) engaging in only those other activities necessary or incidental thereto.
All of the Trust Common Securities will be directly or indirectly owned by
Textron. The Trust Common Securities will rank PARI PASSU, and payments will be
made thereon PRO RATA, with the Trust Preferred Securities, except that, upon an
event of default under the Declaration, the rights of the holders of the Trust
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 Trust Preferred Securities. Textron will directly or indirectly
acquire Trust Common Securities in an aggregate liquidation amount equal to at
least 3% of the total capital of each Textron Trust.
Each Textron Trust has a term of approximately 55 years but may terminate
earlier, as provided in each Declaration. Each Textron Trust's business and
affairs will be conducted by the trustees (the "Textron Trustees") appointed by
Textron as the direct or indirect holder of all the Trust Common Securities. The
holder of the Trust Common Securities will be entitled to appoint, remove or
replace any of, or increase or reduce the number of, the Textron Trustees of the
Textron Trusts. The duties and obligations of the Textron Trustees shall be
governed by the Declaration of such Textron Trust. Each Textron Trust will have
two Textron Trustees (the "Regular Trustees") who are employees or officers of
or who are affiliated with Textron. One Textron Trustee of each Textron Trust
will be a financial institution that is not affiliated with Textron and has a
specified minimum amount of aggregate capital, surplus, and undivided profits of
not less than $50,000,000, which shall act as property trustee and as indenture
trustee for the purposes of compliance with the provisions of Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), pursuant to the terms set
forth in a Prospectus Supplement (the "Institutional Trustee"). In addition,
unless the Institutional Trustee maintains a principal place of business in the
State of Delaware and otherwise meets the requirements of applicable law, one
Textron Trustee of each Textron Trust will have a principal place of business or
reside in the State of Delaware (the "Delaware Trustee"). Textron will pay all
fees and expenses related to the Textron Trusts and the offering of the Trust
Securities.
The office of the Delaware Trustee for each of the Textron Trusts is The
Chase Manhattan Bank (USA), 802 Delaware Avenue, Wilmington, Delaware 19801. The
address for each Textron Trust is c/o Textron, the Sponsor of the Textron
Trusts, at Textron's corporate headquarters located 40 Westminster Street,
Providence, Rhode Island 02903, telephone (401) 421-2800.
TEXTRON FINANCE, L.P.
Textron Partnership is a limited partnership formed under the laws of the
State of Delaware. Textron Partnership exists for the sole purpose of issuing
its partnership interests and investing the net proceeds thereof
4
<PAGE> 7
in Junior Subordinated Debt Securities. All of its partnership interests, as of
the date hereof, are beneficially owned, directly or indirectly, by Textron.
Textron is the sole general partner in Textron Partnership (the "General
Partner"). Textron Holdings, Inc., a Delaware corporation and wholly-owned
subsidiary of Textron ("Textron Holdings"), is, as of the date hereof, the sole
limited partner in Textron Partnership. Upon the issuance of Partnership
Preferred Securities, which securities represent limited partner interests in
Textron Partnership, Textron Holdings will remain as a limited partner, but will
have no interest in the profits and dividends or in the assets of Textron
Partnership. Textron Partnership has a term of approximately 99 years, unless
earlier dissolved. Textron Partnership's office in the State of Delaware is c/o
The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, New Castle County, Delaware 19801, telephone: (302) 658-7581. All of
Textron Partnership's business and affairs will be conducted by Textron, as
General Partner. The business address of Textron Partnership is c/o Textron
Inc., 40 Westminster Street, Providence, Rhode Island 02903, telephone number
(401) 421-2800.
USE OF PROCEEDS
The proceeds from the sale by each Textron Trust of its Trust Preferred
Securities and the proceeds from the sale by Textron Partnership of its
Partnership Preferred Securities will be invested in the Junior Subordinated
Debt Securities of Textron. Except as may otherwise be described in the
Prospectus Supplement relating to a series of Senior Debt Securities,
Subordinated Debt Securities or Junior Subordinated Debt Securities, Textron
intends to use the net proceeds from the sale of such series of Senior Debt
Securities, Subordinated Debt Securities or Junior Subordinated Debt Securities
for general corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions
of the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may apply to the Debt
Securities so offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The Debt Securities may be issued, from time to time, in one or more
series, and will constitute either Senior Debt Securities, Subordinated Debt
Securities or Junior Subordinated Debt Securities. The Senior Debt Securities
may be issued under an Indenture, dated as of April 15, 1987, between Textron
and Chemical Bank (as successor to Manufacturers Hanover Trust Company), as
trustee (the "Senior Debt Trustee"), as supplemented by the First Supplemental
Senior Indenture, dated as of March 15, 1988, and the Second Supplemental Senior
Indenture, dated as of , 1996, each between Textron and the Senior
Debt Trustee (the "Senior Indenture"). The Subordinated Debt Securities may be
issued under an Indenture, dated as of May 1, 1985, between Textron and The
Chase Manhattan Bank, N.A., as trustee (the "Subordinated Debt Trustee"), as
supplemented by the First Supplemental Subordinated Indenture, dated as of
December 18, 1986, and the Second Supplemental Subordinated Indenture, dated as
of , 1996, each between Textron and the Subordinated Debt Trustee
(the "Subordinated Indenture"). The Junior Subordinated Debt Securities may be
issued under an Indenture, dated as of , 1996 (the "Junior
Subordinated Indenture"), between Textron and The Chase Manhattan Bank, N.A., as
trustee (the "Junior Subordinated Debt Trustee").
The following summaries of certain provisions of the Debt Securities, and
the Senior Indenture, the Subordinated Indenture and the Junior Subordinated
Indenture (each individually, an "Indenture" and collectively, the
"Indentures"), do not purport to be complete and are subject to, and are
qualified in their entirety by express reference to, all of the provisions of
the Indentures, including the definitions therein of certain terms, copies
and/or forms of which are filed or incorporated by reference as exhibits to the
Registration Statement. The Senior Debt Trustee, the Subordinated Debt Trustee
and the Junior Subordinated Debt Trustee are each referred to herein as a "Debt
Trustee." All article and section references appearing herein are to articles
and sections of the Indentures, unless otherwise indicated, and capitalized
5
<PAGE> 8
terms which are not otherwise defined in this Prospectus shall have the meanings
specified in the Indentures to which they relate.
TERMS APPLICABLE TO SENIOR DEBT SECURITIES, SUBORDINATED DEBT SECURITIES AND
JUNIOR SUBORDINATED DEBT SECURITIES
GENERAL. The Debt Securities will be direct, unsecured obligations of
Textron. No Indenture limits the amount of Debt Securities which may be issued
thereunder, and each provides that Debt Securities may be issued thereunder in
series up to the aggregate principal amount which may be authorized from time to
time by the Board of Directors. (Senior Indenture and Subordinated Indenture,
sec. 301; Junior Subordinated Indenture, sec. 3.1)
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for the following terms and other information with respect to the
Debt Securities being offered thereby: (i) the designation, priority, aggregate
principal amount, authorized denominations and the currency or currency units
for which Debt Securities may be purchased or in which such Debt Securities may
be denominated and/or the currency or currency units in which principal of,
premium, if any, and/or interest, if any, on such Debt Securities will be
payable and whether Textron or the Holders of any such Debt Securities may elect
to receive payments in respect of such Debt Securities in a currency or currency
units other than that in which such Debt Securities are stated to be payable;
(ii) the percentage of their principal amount at which such Debt Securities will
be issued; (iii) the date on which such Debt Securities will mature; (iv) the
rate per annum at which such Debt Securities will bear interest or the method of
determination of such rate; (v) the dates on which such interest will be
payable; (vi) the rights, if any, to defer payments of interest on the Junior
Subordinated Debt Securities by extending the interest payment period, and the
maximum duration of such extensions; (vii) the place or places where payments on
such Debt Securities shall be made; (viii) any redemption terms or sinking fund
provisions; (ix) the terms of subordination of Debt Securities of that series;
(x) whether Debt Securities will be issued in fully registered form without
coupons attached, in bearer form with or without coupons, or both; (xi) whether
Debt Securities issued in fully registered form will be represented by either a
global security delivered to a depositary and recorded in a book-entry system
maintained by such depositary or by a certificate delivered to the Holder; (xii)
the restrictions, if any, applicable to the exchange of Debt Securities of a
series of one form for another of such series and to the offer, sale and
delivery of the Debt Securities; (xiii) whether and under what circumstances
Textron will pay additional amounts in the event of certain developments with
respect to United States withholding tax or information reporting laws; or (xiv)
other specific terms.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully registered form without coupons, will be
exchangeable for other Debt Securities of the same series, registered in the
same name, for a like aggregate principal amount in authorized denominations,
and will be transferable at any time or from time to time at the Corporate Trust
Office of the respective Debt Trustee or at any other office or agency of
Textron maintained for that purpose. No charge will be made to the Holder for
any such exchange or transfer except for any tax or governmental charge
incidental thereto.
One or more series of Debt Securities may be sold at a substantial discount
below their stated principal amount, bearing interest at a rate which at the
time of issuance is below market rates. Federal income tax consequences and
special considerations applicable to any such series will be described in the
Prospectus Supplement relating thereto.
If a Prospectus Supplement specifies that Debt Securities are denominated
in a currency other than United States dollars, such Prospectus Supplement shall
also specify the currency in which the principal, premium, if any, and interest
on such Debt Securities will be payable, which may be United States dollars
based upon the exchange rate for such other currency existing on or about the
time a payment is due.
Unless otherwise described in the Prospectus Supplement accompanying this
Prospectus, there are no covenants or provisions contained in any of the
Indentures which afford the Holders of the Debt Securities protection in the
event of a highly leveraged transaction involving Textron.
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CONSOLIDATION, MERGER AND SALE OF ASSETS. Each Indenture provides that
Textron will not consolidate with or merge into any other corporation or convey,
transfer or lease its assets substantially as an entirety unless (a) the
successor is a corporation organized in the United States and expressly assumes
the due and punctual payment of the principal of (and premium, if any) and
interest on all Debt Securities issued thereunder and the performance of every
other covenant of the respective Indenture on the part of Textron and (b)
immediately thereafter 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. Upon any such consolidation, merger, conveyance or transfer,
the successor corporation shall succeed to and be substituted for Textron under
the respective Indenture and thereafter the predecessor corporation shall be
relieved of all obligations and covenants under the respective Indenture and
Debt Securities. (Article Eight)
EVENTS OF DEFAULT. Each Indenture provides that the following are Events
of Default thereunder with respect to any series of Senior, Subordinated or
Junior Subordinated Debt Securities, as the case may be: (a) default in the
payment of the principal of (or premium, if any, on) any Debt Security of such
series at its Maturity; (b) default in making a sinking fund payment, if any,
when and as the same shall be due and payable by the terms of the Debt
Securities of such series; (c) default for 30 days in the payment of any
installment of interest on any Debt Security of such series; (d) default for 90
days after written notice in the performance of any other covenant in respect of
the Debt Securities of such series contained in the respective Indenture; (e)
certain events of bankruptcy, insolvency or reorganization, or court appointment
of a receiver, liquidator or trustee of Textron or its property; and (f) any
other Event of Default provided in the applicable resolution of the Board of
Directors or supplemental indenture under which such series of Debt Securities
is issued. (Senior Indenture and Subordinated Indenture, Section 501; Junior
Subordinated Indenture, Section 5.1) An Event of Default with respect to a
particular series of Debt Securities issued under any Indenture does not
necessarily constitute an Event of Default with respect to any other series of
Debt Securities issued thereunder. The applicable Debt Trustee may withhold
notice to the Holders of any series of Debt Securities of any default with
respect to such series (except in the payment of principal, premium or interest)
if it considers such withholding to be in the interests of such Holders. (Senior
Indenture and Subordinated Indenture, Section 602; Junior Subordinated
Indenture, Section 6.2)
If an Event of Default with respect to any series of Debt Securities shall
have occurred and be continuing, the applicable Debt Trustee or the Holders of
25% in aggregate principal amount of the Debt Securities of such series may
declare the principal, or in the case of discounted Debt Securities, such
portion thereof as may be described in the Prospectus Supplement accompanying
this Prospectus, of all the Debt Securities of such series to be due and payable
immediately. (Senior Indenture and Subordinated Indenture, Section 502; Junior
Subordinated Indenture, Section 5.2)
Each Indenture contains a provision entitling the respective Debt Trustee
to be indemnified by the Holders before proceeding to exercise any right or
power under such Indenture at the request of any of the Holders. (Senior
Indenture and Subordinated Indenture, Section 603; Junior Subordinated
Indenture, Section 6.3) Each Indenture provides that the Holders of a majority
in principal amount of the Outstanding Debt Securities of any series thereunder
may direct the time, method and place of conducting any proceeding for any
remedy available to the applicable Debt Trustee or exercising any trust or
power conferred upon such Debt Trustee, with respect to the Debt Securities of
such series. (Senior Indenture and Subordinated Indenture, Section 512; Junior
Subordinated Indenture, Section 5.12) The right of a Holder to institute a
proceeding with respect to an Indenture is subject to certain conditions
precedent including notice and indemnity to the applicable Debt Trustee, but
the Holder has an absolute right to receipt of principal, premium, if any, and
interest at the respective Stated Maturities (or, in the case of redemption, on
the Redemption Date) or to institute suit for the enforcement thereof. (Senior
Indenture and Subordinated Indenture, Sections 507 and 508; Junior Subordinated
Indenture, Sections 5.7 and 5.8)
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of any series under any of the Indentures may on
behalf of the Holders of all the Debt Securities of such series waive any past
defaults except (a) a default in payment of the principal of (or premium, if
any) or interest, if any, on any Debt Security of such series and (b) a default
in respect of a covenant or provision of the respective Indenture which cannot
be amended or modified without the consent of the Holder of each Debt Security
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affected; PROVIDED, HOWEVER, that with respect to Junior Subordinated Debt
Securities, if the Junior Subordinated Debt Securities of such series are held
by a Textron Trust or a trustee of such trust or by Textron Partnership, such
waiver or modification to such waiver shall not be effective until the holders
of a majority in liquidation preference of Trust Securities of the applicable
Textron Trust or of the applicable series of Partnership Preferred Securities,
as the case may be, shall have consented to such waiver or modification to such
waiver; PROVIDED FURTHER, that if the consent of the Holder of each Outstanding
Junior Subordinated Debt Security is required, such waiver shall not be
effective until each holder of the Trust Securities of the applicable Textron
Trust or of the applicable series of Partnership Preferred Securities, as the
case may be, shall have consented to such waiver. (Senior Indenture and
Subordinated Indenture, sec. 513; Junior Subordinated Indenture, sec. 5.13)
Each Indenture requires Textron to furnish to the applicable Debt Trustee
an annual statement as to defaults, if any, by Textron under such Indenture.
(Senior Indenture, sec. 1006; Subordinated Indenture, sec. 1004; Junior
Subordinated Indenture, sec. 10.4)
Modifications and Amendments. Modifications and amendments of each
Indenture may be made by Textron and the respective Debt Trustee with the
consent of the Holders of a majority in principal amount of the Debt Securities
at the time Outstanding of each series which is affected thereby, PROVIDED that
no such modification or amendment may, without the consent of the Holder of each
Debt Security affected thereby: (i) modify the terms of payment of principal,
premium, if any, or interest; or (ii) reduce the percentage of Holders of Debt
Securities necessary to modify or amend the applicable Indenture or waive
compliance by Textron with any covenant or past default or in the case of Senior
Debt Securities reduce quorum or voting requirements for meetings of Holders
PROVIDED, FURTHER, that with respect to Junior Subordinated Debt Securities, if
the Junior Subordinated Debt Securities of such series are held by a Textron
Trust or a trustee of such trust or by Textron Partnership, such supplemental
indenture shall not be effective until the holders of a majority in liquidation
preference of Trust Securities of the applicable Textron Trust or of the
applicable series of Partnership Preferred Securities, as the case may be, shall
have consented to such supplemental indenture; PROVIDED FURTHER, that if the
consent of the Holder of each Outstanding Junior Subordinated Debt Security is
required, such supplemental indenture shall not be effective until each holder
of the Trust Securities of the applicable Textron Trust or of the applicable
series of Partnership Preferred Securities, as the case may be, shall have
consented to such supplemental indenture. (Senior Indenture and Subordinated
Indenture, sec. 902; Junior Subordinated Indenture, sec. 9.2)
Discharge and Defeasance. Textron may discharge all of its obligations
(except those set forth below) to holders of any series of Debt Securities
issued under any Indenture, which Debt Securities have not already been
delivered to the applicable Debt Trustee for cancellation and which either have
become due and payable or are by their terms due and payable within one year (or
are to be called for redemption within one year) by depositing with the
applicable Debt Trustee an amount certified to be sufficient to pay when due the
principal of and premium, if any, and interest, if any, on all outstanding Debt
Securities of such series and to make any mandatory sinking fund payments
thereon when due. (Senior Indenture and Subordinated Indenture, sec. 401; Junior
Subordinated Indenture, sec. 4.1)
Unless otherwise specified in the applicable Prospectus Supplement with
respect to the Debt Securities of a series, Textron, at its option, (i) will be
discharged from any and all obligations in respect of the Debt Securities of
such series, other than with respect to Junior Subordinated Debt Securities
issued in connection with Trust Preferred Securities (except for certain
obligations to register the transfer or exchange of Debt Securities of such
series, to replace mutilated, defaced, destroyed, lost or stolen Debt Securities
of such series, and to maintain Paying Agents and hold moneys for payment in
trust) or (ii) need not comply with certain covenants specified in the
applicable Prospectus Supplement with respect to the Debt Securities of that
series, and the occurrence of an event described in clause (d) under "Events of
Default" above with respect to any defeased covenant and clause (f) of the
"Events of Default" above shall no longer be an Event of Default if, in either
case, Textron deposits with the Debt Trustee, in trust, money or U.S. Government
Obligations that through the payment of interest thereon and principal thereof
in accordance with their terms will provide money in an amount sufficient to pay
all the principal of (and premium, if any) and any interest on the Debt
Securities of such series on the dates such payments are due (which may include
one or more redemption
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dates designated by Textron) in accordance with the terms of such Debt
Securities. Such a trust may only be established, if, among other things,
Textron shall have delivered an Opinion of Counsel, which, in the case of a
discharge pursuant to clause (i), must be based upon a ruling or administrative
pronouncement of the Internal Revenue Service, to the effect that the Holders of
the Debt Securities will not recognize gain or loss for Federal income tax
purposes as a result of such deposit or defeasance and will be subject to
Federal income tax in the same manner as if such defeasance had not occurred.
(Senior Indenture and Subordinated Indenture, sec.sec. 402, 403 and 404; Junior
Subordinated Indenture, sec.sec. 4.2, 4.3 and 4.4) In the event Textron omits to
comply with its remaining obligations under the applicable Indenture after a
defeasance of such Indenture with respect to the Debt Securities of any series
as described under clause (ii) above and the Debt Securities of such series are
declared due and payable because of the occurrence of any undefeased Event of
Default, the amount of money and U.S. Government Obligations on deposit with the
Debt Trustee may be insufficient to pay amounts due on the Debt Securities of
such series at the time of the acceleration resulting from such Event of
Default. However, Textron will remain liable in respect of such payments.
Concerning the Debt Trustees. Each of the Senior Debt Trustee, the
Subordinated Debt Trustee and the Junior Subordinated Debt Trustee have extended
substantial credit facilities (the borrowings under which constitute Senior
Indebtedness) to Textron. Textron and certain of its subsidiaries also maintain
bank accounts, borrow money and have other customary banking or investment
banking relationships with each Debt Trustee in the ordinary course of business.
Global Securities. Each Indenture provides that the registered Debt
Securities of a series may be issued in the form of one or more fully registered
Global Securities (a "Registered Global Security") that will be deposited with a
depositary (a "Depositary") or with a nominee for a Depositary identified in the
Prospectus Supplement relating to such series and registered in the name of the
Depositary or a nominee thereof. (Senior Indenture and Subordinated Indenture,
sec. 301; Junior Subordinated Indenture, sec. 3.1) In such case, one or more
Registered Global Securities will be issued in a denomination or aggregate
denominations equal to the portion of the aggregate principal amount of
outstanding registered Debt Securities of the series to be represented by such
Registered Global Security or Securities. Unless and until it is exchanged in
whole for Debt Securities in definitive registered form, a Registered Global
Security may not be transferred except as a whole by the Depositary for such
Registered Global Security to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor of such Depositary or a
nominee of such successor. The Depositary currently accepts only debt securities
that are payable in U.S. dollars.
The specific terms of the depositary arrangement with respect to any
portion of a series of Debt Securities to be represented by a Registered Global
Security will be described in the Prospectus Supplement relating to such series.
Ownership of beneficial interests in a Registered Global Security will be
limited to persons that have accounts with the Depositary for such Registered
Global Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Registered Global Security, the Depositary
for such Registered Global Security will credit, on its book-entry registration
and transfer system, the participants' accounts with the respective principal
amounts of the Debt Securities represented by such Registered Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Debt Securities. Ownership of beneficial interests in such
Registered Global Security will be shown on, and the transfer of such ownership
interests will be effected only through records maintained by the Depositary for
such Registered Global Security (with respect to interests of participants) and
on the records of participants (with respect to interests of persons holding
through participants). The laws of some states may require that certain
purchasers of securities take physical delivery of such securities in definitive
form. Such limits and such laws may impair the ability to own, transfer or
pledge beneficial interests in Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global Security for all
purposes under
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the applicable Indenture. Except as set forth below, owners of beneficial
interests in a Registered Global Security will not be entitled to have the Debt
Securities represented by such Registered Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such Debt
Securities in definitive form and will not be considered the owners or holders
thereof under the Indenture. Accordingly, each person owning a beneficial
interest in a Registered Global Security must rely on the procedures of the
Depositary for such Registered Global Security and, if such person is not a
participant, on the procedures of the participant through which such person owns
its interest, to exercise any rights of a holder under the applicable Indenture.
Textron understands that under existing industry practices, if Textron requests
any action of holders or if an owner of a beneficial interest in a Registered
Global Security desires to give or take any action which a holder is entitled to
give or take under the applicable Indenture, the Depositary for such Registered
Global Security would authorize the participants holding the relevant beneficial
interests to give or take such action, and such participants would authorize
beneficial owners owning through such participants to give or take such action
or would otherwise act upon the instructions of beneficial owners holding
through them.
Principal, premium, if any, and interest payments on Debt Securities
represented by a Registered Global Security registered in the name of a
Depositary or its nominee will be made to such Depositary or its nominee, as the
case may be, as the registered owner of such Registered Global Security. None of
Textron, the applicable Debt Trustee or any other agent of Textron or agent of
the Debt Trustee will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in such Registered Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
Textron expects that the Depositary for any Debt Securities represented by
a Registered Global Security, upon receipt of any payment of principal, premium
or interest in respect of such Registered Global Security, will immediately
credit participants' accounts with payments in amounts proportionate to their
respective beneficial interests in such Registered Global Security as shown on
the records of such Depositary. Textron also expects that payments by
participants to owners of beneficial interests in such Registered Global
Security held through such participants will be governed by standing customer
instructions and customary practices, as is now the case with the securities
held for the accounts of customers in bearer form or registered in "street
name," and will be the responsibility of such participants.
If the Depositary for any Debt Securities represented by a Registered
Global Security is at any time unwilling or unable to continue as Depositary or
ceases to be a clearing agency registered under the Exchange Act, and a
successor Depositary registered as a clearing agency under the Exchange Act is
not appointed by Textron within 90 days, Textron will issue such Debt Securities
in definitive form in exchange for such Registered Global Security. In addition,
Textron may at any time and in its sole discretion determine not to have any of
the Debt Securities of a series represented by one or more Registered Global
Securities and, in such event, will issue Debt Securities of such series in
definitive form in exchange for all of the Registered Global Security or
Securities representing such Debt Securities. Any Debt Securities issued in
definitive form in exchange for a Registered Global Security will be registered
in such name or names as the Depositary shall instruct the relevant Trustee. It
is expected that such instructions will be based upon directions received by the
Depositary from participants with respect to ownership of beneficial interests
in such Registered Global Security.
The Debt Securities of a series may also be issued in the form of one or
more bearer global Securities (a "Bearer Global Security") that will be
deposited with a common depositary for Euro-clear and Cedel Bank, societe
anonyme, or with a nominee for such depositary identified in the Prospectus
Supplement relating to such series. The specific terms and procedures, including
the specific terms of the depositary arrangement, with respect to any portion of
a series of Debt Securities to be represented by a Bearer Global Security will
be described in the Prospectus Supplement relating to such series.
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PARTICULAR TERMS OF THE SENIOR DEBT SECURITIES
RANKING OF SENIOR DEBT SECURITIES. The Senior Debt Securities will
constitute part of the senior debt of Textron and rank equally with all other
unsecured debt of Textron except subordinated debt.
LIMITATION UPON MORTGAGES. The Senior Indenture prohibits Textron and its
Restricted Subsidiaries from issuing, assuming or guaranteeing any mortgage,
security interest, pledge, lien or other encumbrance ("mortgages") upon any
Principal Property of Textron or any Restricted Subsidiary or upon any shares of
stock or indebtedness of any Restricted Subsidiary without equally and ratably
securing the Senior Debt Securities. The foregoing restriction, however, will
not apply to: (a) mortgages on property, shares of stock or indebtedness of any
corporation existing at the time such corporation becomes a Restricted
Subsidiary; (b) mortgages on property existing at the time of acquisition of
such property by Textron or a Restricted Subsidiary, or mortgages to secure the
payment of all or any part of the purchase price of such property upon the
acquisition thereof or to secure indebtedness incurred prior to, at the time of,
or within 180 days after, the acquisition thereof for the purpose of financing
all or any part of the purchase price thereof, or mortgages to secure the cost
of improvements to such acquired property; (c) mortgages to secure indebtedness
of a Restricted Subsidiary owing to Textron or another Restricted Subsidiary;
(d) mortgages existing at the date of the Senior Indenture; (e) mortgages on
property of a corporation existing at the time such corporation is merged into
or consolidated with Textron or a Restricted Subsidiary or at the time of a
sale, lease or other disposition of the properties of a corporation as an
entirety or substantially as an entirety to Textron or a Restricted Subsidiary;
(f) certain mortgages in favor of governmental entities; or (g) extensions,
renewals or replacements of any mortgage referred to in the foregoing clauses
(a) through (f). (Section 1004)
Notwithstanding the restrictions outlined in the preceding paragraph,
Textron or any Restricted Subsidiary will be permitted to issue, assume or
guarantee any mortgage without equally and ratably securing the Senior Debt
Securities, provided that after giving effect thereto, the aggregate amount of
all debt so secured by mortgages (not including mortgages permitted under
clauses (a) through (g) above) does not exceed 10% of the shareholders' equity
of Textron and its consolidated Subsidiaries computed in accordance with
generally accepted accounting principles as set forth on the most recent
consolidated balance sheet of Textron and its consolidated Subsidiaries.
(Section 1004)
LIMITATION UPON SALE AND LEASEBACK TRANSACTIONS. The Senior Indenture
prohibits Textron and its Restricted Subsidiaries from entering into any sale
and leaseback transaction with respect to any Principal Property other than any
such transaction involving a lease for a term of not more than three years or
any such transaction between Textron and a Restricted Subsidiary or between
Restricted Subsidiaries, unless either (a) Textron or such Restricted Subsidiary
would be entitled to incur indebtedness secured by a mortgage on Principal
Property at least equal in amount to the Attributable Debt with respect to such
sale and leaseback transaction, without equally and ratably securing the Senior
Debt Securities, pursuant to the limitation in the Senior Indenture described
above under "Limitation upon Mortgages," or (b) Textron shall apply an amount
equal to the greater of the net proceeds of such sale or the Attributable Debt
with respect to such sale and leaseback transaction to (i) the retirement of
Senior Indebtedness that matures more than twelve months after the creation of
such Senior Indebtedness or (ii) the acquisition, construction, development or
improvement of properties, facilities or equipment which are, or upon such
acquisition, construction, development, or improvement will be, a Principal
Property or a part thereof. (Section 1005)
CERTAIN DEFINITIONS. The term "Attributable Debt" when used in connection
with a sale and leaseback transaction referred to above shall mean the total net
amount of rent (discounted at the rate per annum borne by the Senior Debt
Securities) required to be paid during the remaining term of the applicable
lease. (Section 101)
The term "Principal Property" shall mean any manufacturing plant or
manufacturing facility which is (i) owned by Textron or any Restricted
Subsidiary, (ii) located within the continental United States, and (iii) in the
opinion of the Board of Directors materially important to the total business
conducted by Textron and the Restricted Subsidiaries taken as a whole. (Section
101)
The term "Restricted Subsidiary" shall mean any Subsidiary (i)
substantially all the property of which is located within the continental United
States and (ii) which owns any Principal Property; provided that the
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term "Restricted Subsidiary" shall not include any Subsidiary which is
principally engaged in leasing or in financing receivables, or which is
principally engaged in financing Textron's operations outside the continental
United States. (sec. 101)
The term "Subsidiary" shall mean a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by Textron
or by one or more other Subsidiaries, or by Textron and one or more other
Subsidiaries. (sec. 101)
WAIVER OF CERTAIN COVENANTS. Compliance by Textron with the foregoing and
certain other restrictive covenants may be omitted with respect to the Senior
Debt Securities of any series if before the time for such compliance the Holders
of a majority in principal amount of such series at the time Outstanding shall
waive such compliance. (sec. 1007)
PARTICULAR TERMS OF THE SUBORDINATED DEBT SECURITIES
RANKING OF SUBORDINATED DEBT SECURITIES. The Subordinated Debt Securities
will rank senior to any Junior Subordinated Debt Securities and will be
subordinated and junior in right of payment to any Senior Debt Securities and
certain other indebtedness of Textron to the extent set forth in the Prospectus
Supplement that will accompany this Prospectus.
PARTICULAR TERMS OF THE JUNIOR SUBORDINATED DEBT SECURITIES
GENERAL. Junior Subordinated Debt Securities are issuable in one or more
series pursuant to a resolution of Textron's Board of Directors or established
in one or more indentures supplemental to the Junior Subordinated Indenture
(each, a "Supplemental Indenture"). (sec. 3.1)
RANKING OF JUNIOR SUBORDINATED DEBT SECURITIES. The Junior Subordinated
Debt Securities will be subordinated and junior in right of payment to any
Senior Debt Securities and Subordinated Debt Securities and certain other
indebtedness of Textron to the extent set forth in the Prospectus Supplement
that will accompany this Prospectus.
EVENTS OF DEFAULT. In addition to those Events of Default described above
under "Terms Applicable to Senior Debt Securities, Subordinated Debt Securities
and Junior Subordinated Debt Securities -- Events of Default," the Junior
Subordinated Indenture provides that the following are Events of Default
thereunder with respect to any series of Junior Subordinated Debt Securities:
(a) in the event Junior Subordinated Debt Securities of a series are issued and
sold to a Textron Trust or a trustee of such trust in connection with the
issuance of Trust Securities by such Textron Trust, such Textron Trust shall
have voluntarily or involuntarily dissolved, wound-up its business or otherwise
terminated its existence, except in connection with (i) the distribution of
Junior Subordinated Debt Securities to holders of Trust Securities in
liquidation or redemption of their interests in such Textron Trust upon a
Special Event, (ii) the redemption of all of the outstanding Trust Securities of
such Textron Trust or (iii) certain mergers, consolidations or amalgamations,
each as permitted by the Declaration of such Textron Trust, or (b) in the event
Junior Subordinated Debt Securities of a series are issued and sold to Textron
Partnership in connection with the issuance of Partnership Preferred Securities
by Textron Partnership, Textron Partnership shall have voluntarily or
involuntarily dissolved, wound-up its business or otherwise terminated its
existence, except in connection with (i) the distribution of Junior Subordinated
Debt Securities to holders of Partnership Preferred Securities in liquidation or
redemption of their interests in Textron Partnership, (ii) the redemption of all
of the outstanding Partnership Preferred Securities of Textron Partnership or
(iii) certain mergers, consolidations or amalgamations, each as permitted by the
limited partnership agreement of Textron Partnership. (sec. 5.1)
CERTAIN PROVISIONS APPLICABLE TO TEXTRON TRUSTS. In the event Junior
Subordinated Debt Securities are issued to a Textron Trust (or a trustee of such
trust) in connection with the issuance of Trust Securities by any Textron Trust,
such Junior Subordinated Debt Securities subsequently may be distributed PRO
RATA to the holders of such Trust Securities in connection with the dissolution
of such Textron Trust upon the occurrence of certain events described in the
Prospectus Supplement relating to such Trust Securities. Only one series of
Junior Subordinated Debt Securities will be issued to a Textron Trust, or a
trustee of such trust, in connection
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with the issuance of Trust Securities by such Textron Trust. If Junior
Subordinated Debt Securities are issued to a Textron Trust or a trustee of such
trust in connection with the issuance of Trust Securities by such Textron Trust
and (i) there shall have occurred any event that would constitute an Event of
Default, (ii) Textron shall be in default with respect to its payment of any
obligations under the related Trust Guarantee or Trust Common Guarantee (as
defined below), or (iii) Textron shall have given notice of its election to
defer payments or interest on such Junior Subordinated Debt Securities by
extending the interest payment period as provided in the Junior Subordinated
Indenture and such period, or any extension thereof, shall be continuing, then
(a) Textron will not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payment with respect
thereto, and (b) Textron shall not make any payment of interest, principal (or
premium, if any, on) or repay, repurchase or redeem any debt securities issued
by Textron which rank pari passu with or junior to such Junior Subordinated Debt
Securities. The Trust Guarantee or Trust Common Guarantee, however, will except
from the foregoing (i) any stock dividends paid by Textron where the dividend
stock is the same stock as that on which the dividend is being paid and (ii) any
purchases by Textron of its common stock from The Paul Revere Corporation ("Paul
Revere") or its subsidiaries pursuant to the Agreement to Purchase Stock, dated
April 12, 1990, among Textron, The Paul Revere Life Insurance Company, The Paul
Revere Protective Life Insurance Company and The Paul Revere Variable Annuity
Insurance Company, and the Stock Purchase Agreement, dated as of September 23,
1993, between Textron and Paul Revere (together, the "Paul Revere Stock Purchase
Agreements").
In the event Junior Subordinated Debt Securities are issued to a Textron
Trust or a trustee of such trust in connection with the issuance of Trust
Securities of such Textron Trust, for so long as such Trust Securities remain
outstanding, Textron will covenant (i) to directly or indirectly maintain 100%
ownership of the Trust Common Securities of such Textron Trust; PROVIDED,
HOWEVER, that any permitted successor of Textron under the Junior Subordinated
Indenture may succeed to Textron's ownership of such Trust Common Securities
(ii) not voluntarily dissolve, wind-up or terminate such Textron Trust, except
in connection with a distribution of Junior Subordinated Debt Securities upon a
Special Event and in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration of the applicable Textron Trust,
(iii) timely perform its duties as Sponsor of the applicable Textron Trust and
(iv) to use its reasonable efforts to cause such Textron Trust (a) to remain a
statutory business trust, except in connection with the distribution of Junior
Subordinated Debt Securities to the holders of Trust Securities in liquidation
of such Textron Trust, the redemption of all of the Trust Securities of such
Textron Trust, or certain mergers, consolidations or amalgamations, each as
permitted by the Declaration of such Textron Trust, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes. (Section 10.5)
CERTAIN PROVISIONS APPLICABLE TO TEXTRON PARTNERSHIP. In the event Junior
Subordinated Debt Securities are issued to Textron Partnership in connection
with the issuance of a series of Partnership Preferred Securities by Textron
Partnership, such Junior Subordinated Debt Securities subsequently may be
distributed to the holders of such series of Partnership Preferred Securities in
connection with the dissolution of Textron Partnership upon the occurrence of
certain events described in the Prospectus Supplement relating to such series of
Partnership Preferred Securities. If Junior Subordinated Debt Securities are
issued to Textron Partnership in connection with the issuance of Partnership
Preferred Securities by Textron Partnership and (i) there shall have occurred
any event that would constitute an Event of Default, (ii) Textron shall be in
default with respect to its payment of any obligations under the related
Partnership Guarantee (as defined below), or (iii) Textron shall have given
notice of its election to defer payments or interest on such Junior Subordinated
Debt Securities by extending the interest payment period as provided in the
Junior Subordinated Indenture and such period, or any extension thereof, shall
be continuing, then (a) Textron will not declare or pay any dividend on, make
any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto and (b) Textron shall not make any
payment of interest, principal (or premium, if any, on) or repay, repurchase or
redeem any debt securities issued by Textron which rank PARI PASSU with or
junior to such Junior Subordinated Debt Securities. The Partnership Guarantee,
however, will except from the foregoing (i) any stock dividends paid by Textron
where the dividend stock is the same stock as that on which the
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dividend is being paid and (ii) any purchases by Textron of its common stock
from Paul Revere or its subsidiaries pursuant to the Paul Revere Stock Purchase
Agreements.
So long as any Junior Subordinated Debt Securities are held by Textron
Partnership, Textron will covenant that the General Partner shall not (i) direct
the time, method and place of conducting any proceeding for any remedy available
to the Special Representative, or exercising any trust or power conferred on the
Special Representative with respect to the Junior Subordinated Debt Securities,
(ii) waive any past default which is waivable under the Junior Subordinated
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Junior Subordinated Debt Securities shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Junior Subordinated Debt Securities or of the Junior Subordinated Indenture
without, in each case, obtaining the prior approval of the holders of at least a
majority or more of the aggregate liquidation preference of the Partnership
Preferred Securities then outstanding, provided, however, that where a consent
under the Junior Subordinated Debt Securities would require the consent of each
holder affected thereby, no such consent shall be given by the General Partner
without the prior consent of each holder of the Partnership Preferred
Securities. The General Partner shall not revoke any action previously
authorized or approved by a vote of Partnership Preferred Securities without the
approval of the holders of Partnership Preferred Securities representing a
majority or more of the aggregate liquidation preference of the Outstanding
Partnership Preferred Securities. (Section 10.6)
Textron will also covenant (i) to remain the sole direct or indirect
general partner of Textron Partnership and maintain direct or indirect ownership
of 100% of the general partner interests thereof; provided that any permitted
successor of Textron under the Junior Subordinated Indenture may succeed to
duties as General Partner, (ii) to contribute capital to the extent required to
maintain its capital at an amount equal to at least 3% of the total capital
contributions to Textron Partnership, (iii) not to voluntarily dissolve, wind-up
or terminate Textron Partnership, except in connection with the distribution of
Junior Subordinated Debentures upon a Special Event and in connection with the
certain mergers, consolidations or amalgamations permitted by the agreement of
limited partnership of Textron Partnership, (iv) timely perform all of its
duties as General Partner of Textron Partnership and (v) to use its reasonable
efforts to cause Textron Partnership to remain a limited partnership except in
connection with a distribution of Junior Subordinated Debt Securities upon a
Special Event as provided in the limited partnership agreement of Textron
Partnership, the redemption of all Partnership Preferred Securities of the
applicable series and in connection with certain mergers, consolidations or
amalgamations permitted by the limited partnership agreement of Textron
Partnership, and otherwise continue to be treated as a partnership for United
States federal income tax purposes. (Section 10.6)
DESCRIPTION OF TRUST PREFERRED SECURITIES
Each Textron Trust may issue, from time to time, only one series of Trust
Preferred Securities having terms described in the Prospectus Supplement
relating thereto. The Declaration of each Textron Trust authorizes the Regular
Trustees of such Textron Trust to issue on behalf of such Textron Trust one
series of Trust Preferred Securities. The Declaration will be qualified as an
indenture under the Trust Indenture Act. The Trust Preferred Securities will
have such terms, including distributions, redemption, voting, liquidation rights
and such other preferred, deferred or other special rights or such restrictions
as shall be set forth in the Declaration or made part of the Declaration by the
Trust Indenture Act. Reference is made to any Prospectus Supplement relating to
the Trust Preferred Securities of a Textron Trust for specific terms, including
(i) the distinctive designation of such Trust Preferred Securities, (ii) the
number of Trust Preferred Securities issued by such Textron Trust, (iii) the
annual distribution rate (or method of determining such rate) for Trust
Preferred Securities issued by such Textron Trust and the date or dates upon
which such distributions shall be payable, (iv) whether distributions on Trust
Preferred Securities issued by such Textron Trust shall be cumulative, and, in
the case of Trust Preferred Securities having such cumulative distribution
rights, the date or dates or method of determining the date or dates from which
distributions on Trust Preferred Securities issued by such Textron Trust shall
be cumulative, (v) the amount or amounts which shall be paid out of the assets
of such Textron Trust to the Holders of Trust Preferred Securities of such
Textron Trust upon voluntary or involuntary dissolution, winding-up or
termination of such Textron Trust, (vi) the obligation, if any, of such Textron
Trust to purchase or redeem Trust Preferred Securities issued by such Textron
Trust and the price or
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prices at which, the period or periods within which and the terms and conditions
upon which Trust Preferred Securities issued by such Textron Trust shall be
purchased or redeemed, in whole or in part, pursuant to such obligation, (vii)
the voting rights, if any, of Trust Preferred Securities issued by such Textron
Trust in addition to those required by law, including the number of votes per
Trust Preferred Security and any requirement for the approval by the holders of
Trust Preferred Securities, or of Trust Preferred Securities issued by one or
more Textron Trusts, or of both, as a condition to specified action or
amendments to the Declaration of such Textron Trust, and (viii) any other
relevant rights, preferences, privileges, limitations or restrictions of Trust
Preferred Securities issued by such Textron Trust consistent with the
Declaration of such Textron Trust or with applicable law. All Trust Preferred
Securities offered hereby will be guaranteed by Textron to the extent set forth
below under "Description of Trust Guarantees." Certain United States federal
income tax considerations applicable to any offering of Trust Preferred
Securities will be described in the Prospectus Supplement relating thereto.
In connection with the issuance of Trust Preferred Securities, each Textron
Trust will issue one series of Trust Common Securities. The Declaration of each
Textron Trust authorizes the Regular Trustees of such trust to issue on behalf
of such Textron Trust one series of Trust Common Securities having such terms
including distributions, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. The terms of the Trust Common
Securities issued by such Textron Trust will be substantially identical to the
terms of the Trust Preferred Securities issued by such trust and the Trust
Common Securities will rank pari passu, and payments will be made thereon pro
rata with the Trust Preferred Securities except that, upon an Event of Default
under the Declaration, the rights of the holders of the Trust 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 Trust
Preferred Securities. Except in certain limited circumstances, the Trust Common
Securities will also carry the right to vote and to appoint, remove or replace
any of the Textron Trustees of such Textron Trust. All of the Trust Common
Securities of a Textron Trust will be directly or indirectly owned by Textron.
DESCRIPTION OF TRUST GUARANTEES
Set forth below is a summary of information concerning the Trust Guarantees
that will be executed and delivered by Textron for the benefit of the holders,
from time to time, of Trust Preferred Securities. Each Trust Guarantee will be
qualified as an indenture under the Trust Indenture Act. The Chase Manhattan
Bank, N.A. will act as indenture trustee under each Trust Guarantee (the "Trust
Preferred Securities Guarantee Trustee"). The terms of each Trust Guarantee will
be those set forth in such Trust Guarantee and those made part of such Trust
Guarantee by the Trust Indenture Act. The summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the form of Trust Guarantee, which is filed as
an exhibit to the Registration Statement of which this Prospectus forms a part,
and the Trust Indenture Act. Each Trust Guarantee will be held by the Trust
Preferred Securities Guarantee Trustee for the benefit of the holders of the
Trust Preferred Securities of a Textron Trust.
GENERAL
Pursuant to and to the extent set forth in each Trust Guarantee, Textron
will irrevocably and unconditionally agree to pay in full to the holders of the
Trust Preferred Securities issued by a Textron Trust (except to the extent paid
by such Textron Trust), as and when due, regardless of any defense, right of
set-off or counterclaim which such Textron Trust may have or assert, the
following payments (the "Trust Guarantee Payments"), without duplication: (i)
any accrued and unpaid distributions that are required to be paid on such Trust
Preferred Securities, to the extent such Textron Trust shall have funds
available therefor, (ii) the redemption price, including all accrued and unpaid
distributions (the "Redemption Price"), to the extent such Textron Trust has
funds available therefor with respect to any Trust Preferred Securities called
for redemption by such Textron Trust and (iii) upon a voluntary or involuntary
dissolution, winding-up or termination of such Textron Trust (other than in
connection with the distribution of Junior Subordinated Debt Securities to the
holders of Trust Preferred Securities or the redemption of all of the Trust
Preferred Securities) the lesser of (a) the aggregate of the liquidation amount
and all accrued and unpaid distributions on such Trust Preferred
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Securities to the date of payment to the extent such Textron Trust has funds
available therefor or (b) the amount of assets of such Textron Trust remaining
for distribution to holders of such Trust Preferred Securities in liquidation of
such Textron Trust. Textron's obligation to make a Trust Guarantee Payment may
be satisfied by direct payment of the required amounts by Textron to the holders
of Trust Preferred Securities or by causing such Textron Trust to pay such
amounts to such holders.
Each Trust Guarantee will be a full and unconditional guarantee with
respect to the Trust Preferred Securities issued by a Textron Trust from the
time of issuance of such Trust Preferred Securities but will not apply to any
payment of distributions except to the extent such Textron Trust shall have
funds available therefor. If Textron does not make interest payments on the
Junior Subordinated Debt Securities purchased by a Textron Trust, such Textron
Trust will not pay distributions on the Trust Preferred Securities issued by
such Textron Trust and will not have funds available therefor. See "Particular
Terms of the Junior Subordinated Debt Securities."
Textron has also agreed to irrevocably and unconditionally guarantee the
obligations of each Textron Trust with respect to the Trust Common Securities
(the "Trust Common Guarantees") to the same extent as the Trust Guarantees,
except that, upon an Event of Default under the Junior Subordinated Indenture,
holders of Trust Preferred Securities of Textron Trust under the Trust Guarantee
shall have priority over holders of Trust Common Securities of such Textron
Trust under the applicable Trust Common Guarantee with respect to distributions
and payments on liquidation, redemption or otherwise.
CERTAIN COVENANTS OF TEXTRON
In each Trust Guarantee, Textron will covenant that, so long as any Trust
Preferred Securities issued by a Textron Trust remain outstanding, if there
shall have occurred any event that would constitute an Event of Default under
such Trust Guarantee or the Declaration of such Textron Trust, then (a) Textron
will not declare or pay any dividend on, make any distributions with respect to,
or redeem, purchase, acquire or make a liquidation payment with respect to, any
of its capital stock or make any guarantee payment with respect thereto and (b)
Textron shall not make any payment of interest, principal (or premium, if any,
on) or repay, repurchase or redeem any debt securities issued by Textron which
rank pari passu with or junior to such Junior Subordinated Debt Securities. Each
Trust Guarantee, however, will except from the foregoing (i) any stock dividends
paid by Textron where the dividend stock is the same stock as that on which the
dividend is being paid and (ii) any purchases by Textron of its common stock
from Paul Revere or its subsidiaries pursuant to the Paul Revere Stock Purchase
Agreements.
MODIFICATION OF THE TRUST GUARANTEES; ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Trust Preferred Securities (in which case no vote will be
required), each Trust Guarantee may be amended only with the prior approval of
the holders of not less than a majority in liquidation amount of the outstanding
Trust Preferred Securities issued by a Textron Trust. The manner of obtaining
any such approval of holders of such Trust Preferred Securities will be set
forth in an accompanying Prospectus Supplement. All guarantees and agreements
contained in a Trust Guarantee shall bind the successors, assignees, receivers,
trustees and representatives of Textron and shall inure to the benefit of the
holders of the Trust Preferred Securities of a Textron Trust then outstanding.
EVENTS OF DEFAULT
An Event of Default under the Trust Guarantee will occur upon the failure
of Textron to perform any of its payments or other obligations thereunder. The
holders of a majority in liquidation amount of the Trust Preferred Securities to
which a Trust Guarantee relates have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trust
Preferred Securities Guarantee Trustee in respect of the Trust Guarantee or to
direct the exercise of any trust or power conferred upon the Trust Preferred
Securities Guarantee Trustee under the Trust Guarantee.
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Notwithstanding the foregoing, any holder of Trust Preferred Securities
relating to such Trust Guarantee may institute a legal proceeding directly
against Textron to enforce the Trust Preferred Securities Guarantee Trustee's
rights under such Trust Guarantee without first instituting a legal proceeding
against a Textron Trust, the Trust Preferred Securities Guarantee Trustee or any
other person or entity.
Textron will be required to provide annually to the Trust Preferred
Securities Guarantee Trustee a statement as to the performance by Textron of
certain of its obligations under each of the Trust Guarantees and as to any
default in such performance.
INFORMATION CONCERNING THE TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
The Trust Preferred Securities Guarantee Trustee, prior to the occurrence
of a default, undertakes to perform only such duties as are specifically set
forth in the Trust Guarantee and, after default with respect to a
Trust Guarantee, shall exercise the same degree of care as a prudent individual
would exercise in the conduct of his or her own affairs. Subject to such
provision, the Trust Preferred Securities Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by a Trust Guarantee
Agreement at the request of any holder of Trust Preferred Securities unless it
is offered reasonable indemnity against the costs, expenses and liabilities that
might be incurred thereby.
TERMINATION OF THE TRUST GUARANTEES
Each Trust Guarantee will terminate as to the Trust Preferred Securities
issued by a Textron Trust upon full payment of the Redemption Price of all Trust
Preferred Securities of such Textron Trust, upon distribution of the Junior
Subordinated Debt Securities held by such Textron Trust to the holders of the
Trust Preferred Securities of a Textron Trust or upon full payment of the
amounts payable in accordance with the Declaration of such Textron Trust upon
liquidation of such Textron Trust. Each Trust Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of Trust Preferred Securities issued by a Textron Trust must restore payment of
any sums paid under such Trust Preferred Securities or such Trust Guarantee.
STATUS OF THE TRUST GUARANTEES
Each Trust Guarantee will constitute an unsecured obligation of Textron and
will rank (i) subordinate and junior in right of payment to all other
liabilities of Textron, (ii) pari passu with the most senior preferred or
preference stock now or hereafter issued by Textron and with any guarantee now
or hereafter entered into by Textron in respect of any preferred or preference
stock of any affiliate of Textron (including the Partnership Guarantee) and
(iii) senior to Textron's common stock. The terms of the Trust Preferred
Securities provide that each holder of Trust Preferred Securities issued by a
Textron Trust by acceptance thereof agrees to the subordination provisions and
other terms of the applicable Trust Guarantee.
Each Trust Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under a Trust Guarantee
without instituting a legal proceeding against any other person or entity).
GOVERNING LAW
The Trust Guarantees will be governed by and construed in accordance with
the law of the State of New York.
DESCRIPTION OF PARTNERSHIP PREFERRED SECURITIES
Textron Partnership may issue, from time to time, Partnership Preferred
Securities, in one or more series, having terms described in the Prospectus
Supplement relating thereto. The agreement of limited partnership of Textron
Partnership will be amended and restated (as so amended and restated, the
"Limited Partnership Agreement") to authorize the establishment of one or more
series of Partnership Preferred Securities, having such terms, including
dividends, redemption, voting, liquidation rights and such other preferred,
deferred or
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other special rights or such restrictions as shall be set forth therein or
otherwise established by the General Partner pursuant thereto. Reference is made
to the Prospectus Supplement relating to the Partnership Preferred Securities of
a particular series for specific terms, including (i) the distinctive
designation of such series that shall distinguish it from other series; (ii) the
number of Partnership Preferred Securities included in such series, which number
may be increased or decreased from time to time unless otherwise provided by the
General Partner in creating the series; (iii) the annual dividend rate (or
method of determining such rate) for Partnership Preferred Securities of such
series and the date or dates upon which such dividends shall be payable; (iv)
whether dividends on Partnership Preferred Securities of such series shall be
cumulative, and, in the case of Partnership Preferred Securities of any series
having cumulative dividend rights, the date or dates or method of determining
the date or dates from which dividends on Partnership Preferred Securities of
such series shall be cumulative; (v) the amount or amounts that shall be paid
out of the assets of Textron Partnership to the holders of Partnership Preferred
Securities of such series upon voluntary or involuntary dissolution, winding-up
or termination of Textron Partnership; (vi) the price or prices at which, the
period or periods within which, and the terms and conditions upon which,
Partnership Preferred Securities of such series may be redeemed or purchased, in
whole or in part, at the option of Textron Partnership or the General Partner;
(vii) the obligation, if any, of Textron Partnership to purchase or redeem
Partnership Preferred Securities of such series and the price or prices at
which, the period or periods within which, and the terms and conditions upon
which, Partnership Preferred Securities of such series shall be purchased or
redeemed, in whole or in part, pursuant to such obligation; (viii) the voting
rights, if any, of Partnership Preferred Securities of such series in addition
to those required by law, including the number of votes per Partnership
Preferred Security and any requirement for the approval by the holders of
Partnership Preferred Securities, or of Partnership Preferred Securities of one
or more series, or of both, as a condition to specified action or amendments to
the Limited Partnership Agreement; and (ix) any other relative rights,
preferences, privileges, limitations or restrictions of Preferred Securities of
the series not inconsistent with the Limited Partnership Agreement or with
applicable law. All Partnership Preferred Securities offered hereby will be
guaranteed by Textron to the extent set forth below under "Description of
Partnership Guarantee." Any applicable federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
DESCRIPTION OF PARTNERSHIP GUARANTEE
Set forth below is a summary of information concerning the Partnership
Guarantee that will be executed and delivered by Textron for the benefit of the
holders from time to time of Partnership Preferred Securities. The summary does
not purport to be complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Partnership Guarantee,
which is filed as an exhibit to the Registration Statement of which this
Prospectus forms a part.
GENERAL
Pursuant to and to the extent set forth in the Partnership Guarantee,
Textron will irrevocably and unconditionally agree to pay in full to the holders
of the Partnership Preferred Securities of each series (to the extent not paid
by Textron Partnership), as and when due, regardless of any defense, right of
set-off or counterclaim that Textron Partnership may have or assert, the
following payments (the "Partnership Guarantee Payments"), without duplication:
(i) any accrued and unpaid dividends that have theretofore been declared on the
Partnership Preferred Securities of such series, (ii) the redemption price,
including all accrued and unpaid dividends (the "Redemption Price"), with
respect to any Partnership Preferred Securities called for redemption by Textron
Partnership and (iii) upon a liquidation of Textron Partnership, the lesser of
(a) the aggregate of the liquidation preference and all accrued and unpaid
dividends on the Partnership Preferred Securities of such series to the date of
payment and (b) the amount of assets of Textron Partnership remaining available
for distribution to holders of Partnership Preferred Securities of such series
in liquidation of Textron Partnership, payable in kind. Textron's obligation to
make a Partnership Guarantee Payment may be satisfied by direct payment of the
required amounts by Textron to the holders of Partnership Preferred Securities
or by causing Textron Partnership to pay such amounts to such holders.
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The Partnership Guarantee will be a guarantee on a subordinated basis with
respect to each series of Partnership Preferred Securities from the time of
issuance of such series of Partnership Preferred Securities, but will not apply
to any payment of dividends unless and until such dividends are declared. If
Textron does not make interest payments on the Junior Subordinated Debt
Securities purchased by Textron Partnership, it is expected that Textron
Partnership will not declare or pay dividends on the Partnership Preferred
Securities. See "Particular Terms of the Junior Subordinated Debt Securities."
The Preferred Securities Guarantee, when taken together with Textron's
obligations under the Junior Subordinated Debt Securities, the Subordinated
Indenture, and the Declaration will provide a full and unconditional guarantee
on a subordinated basis by the Company of payments due on the Preferred
Securities.
CERTAIN COVENANTS OF TEXTRON
In the Partnership Guarantee, Textron will covenant that, so long as any
Partnership Preferred Securities remain outstanding, if at such time Textron
shall be in default with respect to its payment obligations under the
Partnership Guarantee or there shall have occurred any Event of Default under
the Junior Subordinated Indenture, then (a) Textron will not declare or pay any
dividend on, make any distributions with respect to, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of its capital stock
or make any guarantee payment with respect thereto, and (b) Textron shall not
make any payment of interest, principal (or premium, if any, on) or repay,
repurchase or redeem any debt securities issued by Textron which rank PARI PASSU
with or junior to such Junior Subordinated Debt Securities. The Partnership
Guarantee, however, will except from the foregoing (i) any stock dividends paid
by Textron where the dividend stock is the same stock as that on which the
dividend is being paid and (ii) any purchases by Textron of its common stock
from Paul Revere or its subsidiaries pursuant to the Paul Revere Stock Purchase
Agreements.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not adversely affect the rights
of holders of Partnership Preferred Securities (in which case no consent will be
required), the Partnership Guarantee may be amended only with the prior approval
of the holders of not less than a majority in liquidation preference of the
outstanding Partnership Preferred Securities. The manner of obtaining any such
approval of holders of the Partnership Preferred Securities of each series will
be as set forth in an accompanying Prospectus Supplement. All guarantees and
agreements contained in the Partnership Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of Textron and shall inure to
the benefit of the holders of the Partnership Preferred Securities then
outstanding.
TERMINATION OF THE PARTNERSHIP GUARANTEE
The Partnership Guarantee will terminate and be of no further force and
effect as to the Partnership Preferred Securities of any series upon full
payment of the Redemption Price of all Partnership Preferred Securities of such
series, and will terminate completely upon full payment of the amounts payable
in accordance with the Limited Partnership Agreement upon liquidation of Textron
Partnership. See "Description of Debt Securities -- Events of Default" and
"Particular Terms of the Junior Subordinated Debt Securities -- Events of
Default" for a description of the events of default and enforcement rights of
the holders of Junior Subordinated Debt Securities. The Partnership Guarantee
will continue to be effective or will be reinstated, as the case may be, if at
any time any holder of Partnership Preferred Securities of any series must, in
accordance with the Delaware Revised Uniform Limited Partnership Act (the
"Partnership Act"), restore payment of any sum paid under such series of
Partnership Preferred Securities or the Partnership Guarantee. The Partnership
Act provides that a limited partner of a limited partnership who wrongfully
receives a distribution, may be liable to the limited partnership for the amount
of such distribution.
STATUS OF THE PARTNERSHIP GUARANTEE
Textron's obligations under the Partnership Guarantee to make the
Partnership Guarantee Payments will constitute an unsecured obligation of
Textron and will rank (i) subordinate and junior in right of payment to all
other liabilities of Textron, (ii) pari passu with the most senior preferred or
preference stock now or
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hereafter issued by Textron and with any guarantee now or hereafter entered into
by Textron in respect of any preferred or preference stock of any affiliate of
Textron (including any Trust Guarantee) and (iii) senior to Textron's common
stock. The Limited Partnership Agreement provides that each holder of
Partnership Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Partnership Guarantee.
The Partnership Guarantee will constitute a guarantee of payment and not of
collection (that is, the guaranteed party may institute a legal proceeding
directly against the guarantor to enforce its rights under the guarantee without
first instituting a legal proceeding against any other person or entity). The
Partnership Guarantee will be deposited with the General Partner to be held for
the benefit of the holders of each series of the Partnership Preferred
Securities. In the event of the appointment of a Special Representative to,
among other things, enforce the Partnership Guarantee, the Special
Representative may take possession of the Partnership Guarantee for such
purpose. If no Special Representative has been appointed to enforce the
Partnership Guarantee, the General Partner has the right to enforce the
Partnership Guarantee on behalf of the holders of each series of the Partnership
Preferred Securities. The holders of not less than a majority in aggregate
liquidation preference of the Partnership Preferred Securities have the right to
direct the time, method and place of conducting any proceeding for any remedy
available in respect of the Partnership Guarantee, including the giving of
directions to the General Partner or the Special Representative, as the case may
be. If the General Partner or the Special Representative fails to enforce the
Partnership Guarantee as above provided, any holder of Preferred Securities may
institute a legal proceeding directly against Textron to enforce its rights
under the Partnership Guarantee, without first instituting a legal proceeding
against Textron Partnership or any other person or entity. The Partnership
Guarantee will not be discharged except by payment of the Partnership Guarantee
Payments in full (without duplication of amounts theretofore paid by Textron
Partnership).
GOVERNING LAW
The Partnership Guarantee will be governed by and construed in accordance
with the law of the State of New York.
PLAN OF DISTRIBUTION
Textron may sell any series of Debt Securities and any Textron Trust and
Textron Partnership may sell Preferred Securities in one or more of the
following ways from time to time: (i) to or through underwriters or dealers,
(ii) directly to purchasers, or (iii) through agents. The Prospectus Supplement
with respect to any Offered Securities will set forth (i) the terms of the
offering of the Offered Securities, including the name or names of any
underwriters, dealers or agents, (ii) the purchase price of the Offered
Securities and the proceeds to Textron, Textron Trust or Textron Partnership, as
the case may be, from such sale, (iii) any underwriting discounts and
commissions or agency fees and other items constituting underwriters' or agents'
compensation, (iv) any initial public offering prices, (v) any discounts or
concessions allowed or reallowed or paid to dealers, and (vi) any securities
exchange on which such Offered Securities may be listed. Any initial public
offering price, discounts or concessions allowed or reallowed or paid to dealers
may be changed from time to time.
If underwriters are used in the sale, the Offered Securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The Offered Securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of Offered Securities will be
named in the Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover of such Prospectus Supplement. Unless otherwise set forth
in the Prospectus Supplement relating thereto, the obligations of the
underwriters to purchase the
20
<PAGE> 23
Offered Securities will be subject to certain conditions precedent, and the
underwriters will be obligated to purchase all the Offered Securities if any are
purchased.
If dealers are utilized in the sale of Offered Securities, Textron, the
applicable Textron Trust and/or Textron Partnership will sell such Offered
Securities to the dealers as principals. The dealers may then resell such
Offered Securities to the public at varying prices to be determined by such
dealers at the time of resale. The names of the dealers and the terms of the
transaction will be set forth in the Prospectus Supplement relating thereto.
Any series of Debt Securities may be sold from time to time either directly
by Textron or through agents designated by Textron. Any series of Preferred
Securities may be sold from time to time either directly by a Textron Trust
and/or Textron Partnership or by their respective designated agents. Any agent
involved in the offer or sale of the Offered Securities in respect to which this
Prospectus is delivered will be named, and any commissions payable by Textron,
the applicable Textron Trust and/or Textron Partnership to such agent will be
set forth in the Prospectus Supplement relating thereto. Unless otherwise
indicated in the Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
The Debt Securities may be sold directly by Textron and the Preferred
Securities may be sold directly by a Textron Trust and/or Textron Partnership to
institutional investors or others who may be deemed to be underwriters within
the meaning of the Securities Act with respect to any resale thereof. The terms
of any such sales will be described in the Prospectus Supplement relating
thereto.
If so indicated in the Prospectus Supplement, Textron, the applicable
Textron Trust and/or Textron Partnership will authorize agents, underwriters or
dealers to solicit offers from certain types of institutions to purchase Offered
Securities from Textron, such Textron Trust and/or Textron Partnership at the
public offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts (the "Contracts") providing for payment and delivery on a
specified date or dates in the future. Such Contracts will not be subject to any
conditions except (a) the purchase by an institution of the Offered Securities
covered by its Contracts shall not at the time of delivery be prohibited under
the laws of any jurisdiction in the United States to which such institution is
subject and (b) if the Offered Securities are being sold to underwriters, the
Company shall have sold to such underwriters the total principal amount of the
Offered Securities less the principal amount thereof covered by the Contracts.
The Prospectus Supplement will set forth the commission payable for solicitation
of such Contracts.
Agents, dealers and underwriters may be entitled, under agreements with
Textron, a Textron Trust and/or Textron Partnership, to indemnification by
Textron, the applicable Textron Trust and/or Textron Partnership against certain
civil liabilities, including liabilities under the Securities Act, or to
contribution with respect to payments that such agents, dealers or underwriters
may be required to make in respect thereof. Agents, dealers and underwriters may
be customers of, engage in transactions with, or perform services for Textron, a
Textron Trust and/or Textron Partnership in the ordinary course of business.
Each series of Offered Securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom Offered
Securities are sold for public offering and sale may make a market in such
Offered Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The Offered Securities
may or may not be listed on a national securities exchange. No assurance can be
given that there will be a market for the Offered Securities.
LEGAL OPINIONS
The validity of the Senior Debt Securities, Subordinated Debt Securities,
Junior Subordinated Debt Securities, Trust Guarantees and Partnership Guarantee
and certain legal matters relating thereto will be passed upon for Textron, the
Textron Trusts and Textron Partnership by Michael D. Cahn, Assistant General
Counsel-Corporate of Textron. The validity of the Trust Preferred Securities and
Partnership Preferred Securities and certain legal matters relating thereto will
be passed upon for Textron, the Textron Trusts and Textron Partnership by
Skadden, Arps, Slate, Meagher & Flom, New York, New York.
21
<PAGE> 24
EXPERTS
The consolidated financial statements and schedules of Textron Inc.
included or incorporated by reference in Textron's Annual Report on Form 10-K
for the fiscal year ended December 31, 1994, incorporated in this Prospectus by
reference, have been audited by Ernst & Young LLP, independent auditors, as set
forth in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements and schedules are, and
consolidated audited financial statements to be included in subsequently filed
documents will be, incorporated herein in reliance upon the reports of Ernst &
Young pertaining to such financial statements (to the extent covered by consents
filed with the Securities and Exchange Commission) given upon the authority of
such firm as experts in accounting and auditing.
22
<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The expenses in connection with the distribution of the securities being
registered (other than underwriting discounts and commissions) are estimated as
follows:
<TABLE>
<S> <C>
SEC Filing Fee........................................................ $ 275,862.07
Rating Agency Fees.................................................... 205,000.00
Blue Sky Fees and Expenses............................................ 45,000.00
New York Stock Exchange Listing Fee................................... 153,200.00
Trustee's Expenses.................................................... 10,000.00
Printing Fees and Expenses............................................ 150,000.00
Accounting Fees and Expenses.......................................... 125,000.00
Legal Fees and Expenses............................................... 200,000.00
Miscellaneous......................................................... 35,937.93
-------
Total....................................................... $1,200,000.00
=======
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law and Article XII of
Textron's By-laws contain provisions for indemnification of directors and
officers in certain circumstances, which may include indemnity against expenses,
including attorneys' fees and judgments, fines and amounts paid in settlement
under the Securities Act of 1933.
Also, Textron has obtained policies of directors' and officers' liability
insurance and has entered into indemnification agreements which contain
additional provisions for indemnification of directors and officers in certain
circumstances.
In addition, the Underwriting Agreements filed as Exhibits 1(a) and (b) and
the Selling Agency Agreement filed as Exhibit 1(c) hereto provide for
indemnification by the Underwriters and Agents of Textron, its directors and
officers for certain liabilities arising under the Securities Act of 1933.
The Declaration of each Textron Trust provides that no Institutional
Trustee or any of its Affiliates, Delaware Trustee or any of its Affiliates, or
officer, director, shareholder, member, partner, employee, representative or
agent of the Institutional Trustee or the Delaware Trustee (each a "Fiduciary
Indemnified Person"), and no Regular Trustee, Affiliate of any Regular Trustee,
or any officer, director, shareholder, member, partner, employee, representative
or agent of any Regular Trustee, or any employee or agent of the Trust or its
Affiliates (each a "Company Indemnified Person") shall be liable, responsible or
accountable in damages or otherwise to such Textron Trust or any officer,
director, shareholder, partner, member, representative, employee or agent of the
Trust or its Affiliates for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such Fiduciary Indemnified Person or
Company Indemnified Person in good faith on behalf of such Textron Trust and in
a manner such Fiduciary Indemnified Person or Company Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Fiduciary Indemnified Person or Company Indemnified Person by such Declaration
or by law, except that a Fiduciary Indemnified Person or Company Indemnified
Person shall be liable for any such loss, damage or claim incurred by reason of
such Fiduciary Indemnified Person's or Company Indemnified Person's gross
negligence (or, in the case of a Fiduciary Indemnified Person, negligence) or
willful misconduct with respect to such acts or omissions. The Declaration of
each Textron Trust also provides that to the full extent permitted by law,
Textron shall indemnify 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
II-1
<PAGE> 26
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 Declaration of each Textron Trust
also provides that to the full extent permitted by law, Textron shall indemnify
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. The Declaration of each Textron Trust
further provides that 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 the immediately
preceding two sentences shall be paid by Textron 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 Textron as
authorized in the Declaration. The directors and officers of Textron and the
Regular Trustees are covered by insurance policies indemnifying them against
certain liabilities, including certain liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act"), which might be incurred by them
in such capacities and against which they cannot be indemnified by Textron or
the Textron Trusts. Any agents, dealers or underwriters who execute any of the
agreements filed as Exhibit 1 to this Registration Statement will agree to
indemnify Textron's directors and their officers and the Textron Trustees who
signed the Registration Statement against certain liabilities that may arise
under the Securities Act with respect to information furnished to Textron or any
of the Textron Trusts by or on behalf of any such indemnifying party.
The Limited Partnership Agreement of Textron Partnership provides that, to
the full extent permitted by law, Textron Partnership shall indemnify each of
the General Partner, any Special Representative, any Affiliate of the General
Partner or any Special Representative, any officers, directors, shareholders,
members, partners, employees, representatives or agents of the General Partner
or any Special Representative, or any employee or agent of Textron Partnership
or its Affiliates (each a "Partnership 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 Textron Partnership)
by reason of the fact that he is or was a Partnership 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 Textron
Partnership, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The Limited Partnership
Agreement also provides that Textron Partnership shall indemnify, to the full
extent permitted by law, any Partnership 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 Textron Partnership to procure a
judgment in its favor by reason of the fact that he is or was a Partnership
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 Textron Partnership and except
that no such indemnification shall be made in respect of any claim, issue or
matter as to which such Partnership Indemnified Person shall have been adjudged
to be liable to Textron Partnership 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
II-2
<PAGE> 27
reasonably entitled to indemnity for such expenses which such Court of Chancery
or such other court shall deem proper. The Limited Partnership Agreement also
provides that expenses (including attorneys' fees) incurred by a Partnership
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in the immediately
preceding two sentences shall be paid by Textron Partnership in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Partnership Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by Textron Partnership as authorized in the Limited Partnership
Agreement. The Limited Partnership Agreement further provides that no
Partnership Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to Textron Partnership or any Covered Person (as defined
therein) for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Partnership Indemnified Person in good faith on
behalf of Textron Partnership and in a manner such Partnership Indemnified
Person reasonably believed to be within the scope of the authority conferred on
such Partnership Indemnified Person by the Limited Partnership Agreement or by
law, except that a Partnership Indemnified Person shall be liable for any such
loss, damage or claim incurred by reason of such Partnership Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
II-3
<PAGE> 28
ITEM 16. EXHIBITS
<TABLE>
<C> <S>
***1(a) Form of Underwriting Agreement for offering of Preferred Securities.
*1(b) Form of Underwriting Agreement for offering of Debt Securities.
*1(c) Form of Selling Agency Agreement, incorporated by reference to Exhibits to
Registration Statement No. 33-46501.
*4(a) Certificate of Trust of Textron Capital I.
*4(b) Certificate of Trust of Textron Capital II.
*4(c) Certificate of Trust of Textron Capital III.
**4(d) Form of Amended and Restated Declaration of Trust.
*4(e) Certificate of Limited Partnership of Textron Finance, L.P.
*4(f) Form of Amended and Restated Agreement of Limited Partnership of Textron Finance,
L.P.
*4(g) Senior Indenture between Textron Inc. and Chemical Bank (as successor to
Manufacturers Hanover Trust Company), as Trustee, incorporated by reference to
Exhibits to Registration Statement No. 33-13742.
*4(h) First Supplemental Senior Indenture between Textron Inc. and Chemical Bank (as
successor to Manufacturers Hanover Trust Company), as Trustee, incorporated by
reference to Exhibits to Registration Statement No. 33-20657.
*4(i) Form of Second Supplemental Senior Indenture to be used in connection with the
issuance of Senior Debt Securities.
*4(j) Subordinated Indenture between Textron Inc. and The Chase Manhattan Bank, N.A.,
as Trustee, incorporated by reference to Exhibits to Registration Statement No.
33-1787.
*4(k) First Supplemental Subordinated Indenture between Textron Inc. and The Chase
Manhattan Bank, N.A., incorporated by reference to Exhibits to Registration
Statement No. 33-9758.
*4(l) Form of Second Supplemental Subordinated Indenture to be used in connection with
the issuance of Subordinated Debt Securities.
**4(m) Form of Junior Subordinated Indenture between Textron Inc. and The Chase
Manhattan Bank, N.A., as Trustee, relating to the Junior Subordinated Debt
Securities.
*4(n) Form of First Supplemental Junior Subordinated Indenture to be used in connection
with the issuance of Junior Subordinated Debt Securities and Preferred
Securities.
**4(o) Form of Trust Preferred Security (included in 4(d) above).
*4(p) Form of Partnership Preferred Security (included in 4(f) above).
*4(q) Form of Senior Debt Security (included in 4(g) above).
*4(r) Form of Subordinated Debt Security (included in 4(j) above).
*4(s) Form of Junior Subordinated Debt Security (included in 4(n) above).
**4(t) Form of Trust Guarantee relating to the Trust Preferred Securities.
*4(u) Form of Partnership Guarantee relating to the Partnership Preferred Securities.
**5(a) Opinion and consent of Michael D. Cahn, Assistant General Counsel -- Corporate of
Textron Inc.
**5(b) Opinion of Skadden, Arps, Slate, Meagher & Flom.
*12(a) Computation of Ratio of Income to Fixed Charges of Textron Parent Company
Borrowing Group, incorporated by reference to Exhibits to Form 10-Q of Textron
Inc. for the quarter ended September 30, 1995 and Form 10-K of Textron Inc. for
the year ended December 31, 1994.
</TABLE>
II-4
<PAGE> 29
<TABLE>
<C> <S>
*12(b) Computation of Ratio of Income to Fixed Charges for Textron Inc. Including All
Majority- Owned Subsidiaries, incorporated by reference to Exhibits to Form 10-Q
of Textron Inc. for the quarter ended September 30, 1995 and Form 10-K of Textron
Inc. for the year ended December 31, 1994.
**23(a) Consent of Independent Auditors, Ernst & Young LLP.
**23(b) Consent of Skadden, Arps, Slate, Meagher & Flom is contained in the opinion of
counsel filed as Exhibit 5(b).
**24(a) Powers of Attorney.
*24(b) Certified Resolutions of the Board of Directors of Textron Inc.
*25(a) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
Chemical Bank, as Trustee under the Senior Indenture, incorporated by reference
to Exhibits to Registration Statement No. 33-46501.
*25(b) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, N.A., as Trustee under the Subordinated Indenture,
incorporated by reference to Exhibits to Registration Statement No. 33-46501.
**25(c) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, N.A., as Trustee under the Junior Subordinated
Indenture and as Trustee of the Trust Guarantees of Textron Inc. for the benefit
of the holders of Trust Preferred Securities of Textron Capital I, Textron
Capital II and Textron Capital III.
**25(d) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, N.A., as Trustee under the Amended and Restated
Declaration of Trust of Textron Capital I.
**25(e) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, N.A., as Trustee under the Amended and Restated
Declaration of Trust of Textron Capital II.
**25(f) Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of
The Chase Manhattan Bank, N.A., as Trustee under the Amended and Restated
Declaration of Trust of Textron Capital III.
**99 Form of Prospectus Supplement for Trust Preferred Securities.
</TABLE>
[FN]
- ---------------
* Filed previously.
** Filed herewith.
*** To be filed subsequent to effectiveness.
ITEM 17. UNDERTAKINGS.
The Registrants hereby undertake that, for purposes of determining any
liability under the Securities Act, each filing of Textron's Annual Report on
Form 10-K pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") (and where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of the
Exchange Act) that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions referred to in Item 15 (other than the
insurance policies referred to therein), or otherwise, the Registrants have been
advised that, in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities
II-5
<PAGE> 30
(other than the payment by the Registrants of expenses incurred or paid by a
director, officer or controlling person of the Registrants in the successful
defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the
Registrants will, unless in the opinion of their counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement
i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
ii) to reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) that, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) under the Securities Act if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement;
iii) to include any material information with respect to the Plan of
Distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by Textron pursuant to Section 13 or Section 15(d) of the Exchange Act
that are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
The Registrants hereby undertake that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of a registration
statement in reliance upon Rule 430A and contained in the form of prospectus
filed by the registrant pursuant to Rule 424 (b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of the registration statement as of
the time it was declared effective.
(2) For the purposes of determining any liability under the Securities Act,
each posteffective amendment that contains a form of prospectus shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
II-6
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Textron Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Amendment No. 2 to
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Providence, and State of Rhode Island,
on this 17th day of January, 1996.
TEXTRON INC.
By: /s/ MICHAEL D. CAHN
------------------------------------
Michael D. Cahn
Attorney-in-Fact
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to Registration Statement has been signed below on this 17th day of
January, 1996 by the following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- --------------------------------------------- -------------------------------
<C> <S> <C>
* Chairman, Chief Executive
- --------------------------------------------- Officer and Director (principal
James F. Hardymon executive officer)
* President, Chief Operating
- --------------------------------------------- Officer and Director
Lewis B. Campbell
* Director
- ---------------------------------------------
H. Jesse Arnelle
* Director
- ---------------------------------------------
R. Stuart Dickson
</TABLE>
<TABLE>
<C> <S> <C>
* Director
- ---------------------------------------------
B. F. Dolan
Director
- ---------------------------------------------
Paul E. Gagne
* Director
- ---------------------------------------------
John D. Macomber
* Director
- ---------------------------------------------
Barbara Scott Preiskel
Director
- ---------------------------------------------
Brian H. Rowe
* Director
- ---------------------------------------------
Sam F. Segnar
</TABLE>
II-7
<PAGE> 32
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
- ---------------------------------------------
Jean Head Sisco
* Director
- ---------------------------------------------
John W. Snow
* Director
- ---------------------------------------------
Martin D. Walker
* Director
- ---------------------------------------------
Thomas B. Wheeler
* Executive Vice President and
- --------------------------------------------- Chief Financial Officer
Stephen L. Key (principal financial officer)
* Vice President and Controller
- --------------------------------------------- (principal accounting officer)
Richard L. Yates
*By: /s/ MICHAEL D. CAHN
- ---------------------------------------------
Michael D. Cahn
Attorney-in-fact
</TABLE>
II-8
<PAGE> 33
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, each of Textron
Capital I, Textron Capital II and Textron Capital III certifies that it has
reasonable grounds to believe that it meets all the requirements for filing on
Form S-3 and has duly caused this Amendment No. 2 to this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Providence, and State of Rhode Island, on this 17th day of January,
1996.
TEXTRON CAPITAL I
By: /s/ RICHARD A. WATSON
--------------------------------------
Richard A. Watson, as Trustee
By: /s/ GREGORY E. HUDSON
--------------------------------------
Gregory E. Hudson, as Trustee
TEXTRON CAPITAL II
By: /s/ RICHARD A. WATSON
--------------------------------------
Richard A. Watson, as Trustee
By: /s/ GREGORY E. HUDSON
--------------------------------------
Gregory E. Hudson, as Trustee
TEXTRON CAPITAL III
By: /s/ RICHARD A. WATSON
--------------------------------------
Richard A. Watson, as Trustee
By: /s/ GREGORY E. HUDSON
--------------------------------------
Gregory E. Hudson, as Trustee
II-9
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Textron Finance, L.P. certifies that it has reasonable grounds to believe that
it meets all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 2 to this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Providence, and State of
Rhode Island, on this 17th day of January, 1996.
TEXTRON FINANCE, L.P.
By: TEXTRON INC.
General Partner
/s/ ARNOLD M. FRIEDMAN
By:
--------------------------------------
Name: Arnold M. Friedman
Title: Vice President and
Deputy General Counsel
II-10
<PAGE> 35
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<C> <S> <C>
***1 (a) Form of Underwriting Agreement for offering of Preferred Securities.
*1 (b) Form of Underwriting Agreement for offering of Debt Securities.
*1 (c) Form of Selling Agency Agreement, incorporated by reference to Exhibits to
Registration Statement No. 33-46501.
*4 (a) Certificate of Trust of Textron Capital I.
*4 (b) Certificate of Trust of Textron Capital II.
*4 (c) Certificate of Trust of Textron Capital III.
**4 (d) Form of Amended and Restated Declaration of Trust.
*4 (e) Certificate of Limited Partnership of Textron Finance, L.P.
*4 (f) Form of Amended and Restated Agreement of Limited Partnership of Textron
Finance, L.P.
*4 (g) Senior Indenture between Textron Inc. and Chemical Bank (as successor to
Manufacturers Hanover Trust Company), as Trustee, incorporated by reference
to Exhibits to Registration Statement No. 33-13742.
*4 (h) First Supplemental Senior Indenture between Textron Inc. and Chemical Bank
(as successor to Manufacturers Hanover Trust Company), as Trustee,
incorporated by reference to Exhibits to Registration Statement No.
33-20657.
*4 (i) Form of Second Supplemental Senior Indenture to be used in connection with
the issuance of Senior Debt Securities.
*4 (j) Subordinated Indenture between Textron Inc. and The Chase Manhattan Bank,
N.A., as Trustee, incorporated by reference to Exhibits to Registration
Statement No. 33-1787.
*4 (k) First Supplemental Subordinated Indenture between Textron Inc. and The
Chase Manhattan Bank, N.A., incorporated by reference to Exhibits to
Registration Statement No. 33-9758.
*4 (l) Form of Second Supplemental Subordinated Indenture to be used in connection
with the issuance of Subordinated Debt Securities.
**4 (m) Form of Junior Subordinated Indenture between Textron Inc. and The Chase
Manhattan Bank, N.A., as Trustee, relating to the Junior Subordinated Debt
Securities.
*4 (n) Form of First Supplemental Junior Subordinated Indenture to be used in
connection with the issuance of Junior Subordinated Debt Securities and
Preferred Securities.
**4 (o) Form of Trust Preferred Security (included in 4(d) above).
*4 (p) Form of Partnership Preferred Security (included in 4(f) above).
*4 (q) Form of Senior Debt Security (included in 4(g) above).
*4 (r) Form of Subordinated Debt Security (included in 4(j) above).
*4 (s) Form of Junior Subordinated Debt Security (included in 4(n) above).
**4 (t) Form of Trust Guarantee relating to the Trust Preferred Securities.
*4 (u) Form of Partnership Guarantee relating to the Partnership Preferred
Securities.
**5 (a) Opinion and consent of Michael D. Cahn, Assistant General
Counsel -- Corporate of Textron Inc.
</TABLE>
<PAGE> 36
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION PAGE
- ----------- ----------- ----
<C> <S> <C>
**5 (b) Opinion of Skadden, Arps, Slate, Meagher & Flom.
*12 (a) Computation of Ratio of Income to Fixed Charges of Textron Parent Company
Borrowing Group, incorporated by reference to Exhibits to Form 10-Q of
Textron Inc. for the quarter ended September 30, 1995 and Form 10-K of
Textron Inc. for the year ended December 31, 1994.
*12 (b) Computation of Ratio of Income to Fixed Charges for Textron Inc. Including
All Majority-Owned Subsidiaries, incorporated by reference to Exhibits to
Form 10-Q of Textron Inc. for the quarter ended September 30, 1995 and Form
10-K of Textron Inc. for the year ended December 31, 1994.
**23 (a) Consent of Independent Auditors, Ernst & Young LLP.
**23 (b) Consent of Skadden, Arps, Slate, Meagher & Flom is contained in the opinion
of counsel filed as Exhibit 5(b).
**24 (a) Powers of Attorney.
*24 (b) Certified Resolutions of the Board of Directors of Textron, Inc.
*25 (a) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of Chemical Bank, as Trustee under the Senior Indenture, incorporated by
reference to Exhibits to Registration Statement No. 33-46501.
*25 (b) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, N.A., as Trustee under the Subordinated
Indenture, incorporated by reference to Exhibits to Registration Statement
No. 33-46501.
**25 (c) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, N.A., as Trustee under the Junior Subordinated
Indenture and as Trustee of the Trust Guarantees of Textron Inc. for the
benefit of the holders of Trust Preferred Securities of Textron Capital I,
Textron Capital II and Textron Capital III.
**25 (d) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, N.A., as Trustee under the Amended and
Restated Declaration of Trust of Textron Capital I.
**25 (e) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, N.A., as Trustee under the Amended and
Restated Declaration of Trust of Textron Capital II.
**25 (f) Statement of Eligibility under the Trust Indenture Act of 1939, as amended,
of The Chase Manhattan Bank, N.A., as Trustee under the Amended and
Restated Declaration of Trust of Textron Capital III.
**99
Form of Prospectus Supplement for Trust Preferred Securities.
</TABLE>
[FN]
- ---------------
* Filed previously.
** Filed herewith.
*** To be filed subsequent to effectiveness.
<PAGE> 1
EXHIBIT 4(d)
=================================
AMENDED AND RESTATED DECLARATION
OF TRUST
TEXTRON CAPITAL I
Dated as of ________, 1996
====================================
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.3 Reports by the Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.4 Periodic Reports to Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.3 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.4 Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.5 Title to Property of the Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.6 Powers and Duties of the Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 3.8 Powers and Duties of the Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 3.9 Certain Duties and Responsibilities of the Institutional Trustee . . . . . . . . . . . . . . . . . . . 19
SECTION 3.10 Certain Rights of Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.11 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.12 Execution of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.14 Duration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.15 Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.2 Responsibilities of the Sponsor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE V
TRUSTEES
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 5.1 Number of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.2 Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 5.3 Institutional Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee Generally . . . . . . . . . . . . . . . . . . . 29
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.6 Appointment, Removal and Resignation of Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 5.7 Vacancies among Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.8 Effect of Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.9 Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 5.10 Delegation of Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 5.11 Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.2 Transfer of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.3 Deemed Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.4 Book Entry Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 9.5 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.6 Appointment of Successor Clearing Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.7 Definitive Preferred Security Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 10.2 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 10.3 Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 10.4 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.5 Outside Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.2 Certain Accounting Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 11.3 Banking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.4 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent . . . . . . . . . . . . . . . . . . . 48
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 13.2 Representations and Warranties of Delaware Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 14.2 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.3 Intention of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.4 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.5 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.6 Partial Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 14.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
ANNEX I TERMS OF SECURITIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY
CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A2-1
EXHIBIT B SPECIMEN OF DEBENTURE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C UNDERWRITING AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>
iii
<PAGE> 5
<TABLE>
CROSS-REFERENCE TABLE*
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
<S> <C>
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3(a)
310(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
311(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2(b)
313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4
314(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.5
314(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
314(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Inapplicable
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(b)
315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.9(a)
316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Annex I
316(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6(e)
- ---------------
<FN>
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
</TABLE>
iv
<PAGE> 6
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TEXTRON CAPITAL I
____________, 1996
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration")
dated and effective as of ___________, 1996, 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 established Textron
Capital I (the "Trust"), a trust under the Delaware Business Trust Act
pursuant to a Declaration of Trust dated as of October 3, 1995, (the "Original
Declaration") and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on October 3, 1995, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debentures of
the Debenture Issuer;
WHEREAS, as of the date hereof, no interests in the Trust have
been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the
Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a business trust under the Business Trust Act and that
this Declaration constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
<PAGE> 7
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions.
------------
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) a term defined anywhere in this Declaration has the
same meaning throughout;
(c) all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or
amended from time to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Declaration unless otherwise defined in
this Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and
vice versa.
"AFFILIATE" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"AUTHORIZED OFFICER" of a Person means any Person that is
authorized to bind such Person.
"BOOK ENTRY INTEREST" means a beneficial interest in a Global
Certificate, ownership and transfers of which shall be maintained and made
through book entries by a Clearing Agency as described in Section 9.4.
"BUSINESS DAY" means any day other than a day on which banking
institutions in New York, New York 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.
2
<PAGE> 8
"CERTIFICATE" means a Common Security Certificate or a
Preferred Security Certificate.
"CLEARING AGENCY" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act that is acting as
depositary for the Preferred Securities and in whose name or in the name of a
nominee of that organization shall be registered a Global Certificate and which
shall undertake to effect book entry transfers and pledges of the Preferred
Securities.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities
deposited with the Clearing Agency.
"CLOSING DATE" means ____________, 1996.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement to
be dated as of ___________, 1996 of the Sponsor in respect of the Common
Securities.
"COMMON SECURITY" has the meaning specified in Section 7.1.
"COMMON SECURITY CERTIFICATE" means a definitive certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"COMPANY INDEMNIFIED PERSON" means (a) any Regular Trustee;
(b) any Affiliate of any Regular Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Regular Trustee; or (d) any officer, employee or agent of the Trust or its
Affiliates.
"CORPORATE TRUST OFFICE" means the office of the Institutional
Trustee at which the corporate trust business of the Preferred Guarantee
Trustee shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at 4 Chase
MetroTech Center, Brooklyn, New York 11245.
"COVERED PERSON" means: (a) any officer, director, shareholder,
partner, member, representative, employee or agent
3
<PAGE> 9
of (i) the Trust or (ii) the Trust's Affiliates; and (b) any Holder of
Securities.
"DEBENTURE ISSUER" means Textron Inc. in its capacity as
issuer of the Debentures under the Indenture.
"DEBENTURE TRUSTEE" means The Chase Manhattan Bank, N.A., 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 Institutional
Trustee, a specimen certificate for such series of Debentures being Exhibit B.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"DEFINITIVE PREFERRED SECURITY CERTIFICATES" has the meaning
set forth in Section 9.4.
"DISTRIBUTION" means a distribution payable to Holders of
Securities in accordance with Section 6.1.
"DTC" means the Depository Trust Company, the initial Clearing
Agency.
"EVENT OF DEFAULT" in respect of the Securities means an Event
of Default (as defined in the Indenture) has occurred and is continuing in
respect of the Debentures.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"FIDUCIARY INDEMNIFIED PERSON" has the meaning set forth in
Section 10.4(b).
"GLOBAL CERTIFICATE" has the meaning set forth in Section 9.4.
"HOLDER" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"INDENTURE" means the Indenture dated as of _______, 1996,
among the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
4
<PAGE> 10
"INSTITUTIONAL TRUSTEE" means the Trustee meeting the
eligibility requirements set forth in Section 5.3.
"INSTITUTIONAL TRUSTEE ACCOUNT" has the meaning set forth in
Section 3.8(c).
"INVESTMENT COMPANY" means an investment company as defined in
the Investment Company Act.
"INVESTMENT COMPANY ACT" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"INVESTMENT COMPANY EVENT" has the meaning set forth in Annex
I hereto.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"MAJORITY IN LIQUIDATION AMOUNT OF THE SECURITIES" means,
except as provided in the terms of the Preferred Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities voting together as a single
class or, as the context may require, Holders of outstanding Preferred
Securities or Holders of outstanding Common Securities voting separately as a
class, who are the record owners of 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.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the 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 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
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opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PERSON" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"PREFERRED SECURITIES GUARANTEE" means the guarantee agreement
to be dated as of ______, 1996, of the Sponsor in respect of the Preferred
Securities.
"PREFERRED SECURITY" has the meaning specified in Section 7.1.
"PREFERRED SECURITY BENEFICIAL OWNER" means, with respect to a
Book Entry Interest, a Person who is the beneficial owner of such Book Entry
Interest, as reflected on the books of the Clearing Agency, or on the books of
a Person maintaining an account with such Clearing Agency (directly as a
Clearing Agency Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"PREFERRED SECURITY CERTIFICATE" means a certificate
representing a Preferred Security substantially in the form of Exhibit A-1.
"PRICING AGREEMENT" means the pricing agreement between the
Trust, the Debenture Issuer, and the underwriters designated by the Regular
Trustees with respect to the offer and sale of the Preferred Securities.
"QUORUM" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"REGULAR TRUSTEE" means any Trustee other than the
Institutional Trustee and the Delaware Trustee.
"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.
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"RESPONSIBLE OFFICER" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer or other officer of
the Corporate Trust Office of the Institutional 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.
"RULE 3a-5" means Rule 3a-5 under the Investment Company Act.
"SECURITIES" means the Common Securities and the Preferred
Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"SPECIAL EVENT" has the meaning set forth in Annex I hereto.
"SPONSOR" means Textron Inc., a Delaware corporation, or any
successor entity in a merger, consolidation or amalgamation, in its capacity as
sponsor of the Trust.
"SUPER MAJORITY" has the meaning set forth in Section
2.6(a)(ii).
"TAX EVENT" has the meaning set forth in Annex I hereto.
"10% IN LIQUIDATION AMOUNT OF THE SECURITIES" means, except as
provided in the terms of the Preferred Securities or by the Trust Indenture
Act, Holder(s) of outstanding Securities voting together as a single class or,
as the context may require, Holders of outstanding Preferred Securities or
Holders of outstanding Common Securities voting separately as a class, who are
the record owners of 10% or more of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant
class.
"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).
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"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.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement for
the offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
---------------------------------
(a) This Declaration is subject to the provisions of
the Trust Indenture Act that are required to be part of this Declaration and
shall, to the extent applicable, be governed by such provisions.
(b) The Institutional Trustee shall be the only Trustee
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 Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 2.2 Lists of Holders of Securities.
-------------------------------
(a) Each of the Sponsor and the Regular Trustees on
behalf of the Trust shall provide the Institutional Trustee (i) within 14 days
after each record date for payment of Distributions, a list, in such form as
the Institutional Trustee may reasonably require, of the names and addresses of
the Holders of the Securities ("List of Holders") as of such record date,
PROVIDED THAT neither the Sponsor nor the Regular Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any time the List
of Holders does not differ from the most
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recent List of Holders given to the Institutional Trustee by the Sponsor and
the Regular 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
Institutional Trustee. The Institutional Trustee shall preserve, in as current
a form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as Paying Agent (if
acting in such capacity) PROVIDED THAT the Institutional Trustee may destroy
any List of Holders previously given to it on receipt of a new List of Holders.
(b) The Institutional Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Institutional Trustee.
-------------------------------------
Within 60 days after May 1 of each year, the Institutional
Trustee shall provide to the Holders of the Preferred Securities such reports
as are required by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture Act. The
Institutional Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Institutional Trustee.
------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such documents, reports and
information as required by 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 2.5 Evidence of Compliance with Conditions Precedent.
-------------------------------------------------
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Institutional Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Events of Default; Waiver.
--------------------------
(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
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<PAGE> 15
in respect of the Preferred Securities and its consequences, PROVIDED THAT, if
the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of
Default under the Declaration shall also not be waivable; or
(ii) 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.
The foregoing provisions of this Section 2.6(a) shall be in lieu of [SECTION]
316(a)(1)(B) of the Trust Indenture Act and such [SECTION] 316(a)(1)(B) of the
Trust Indenture Act is hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the
Preferred Securities or impair any right consequent thereon. Any waiver by the
Holders of the Preferred Securities of an Event of Default with respect to the
Preferred Securities shall also be deemed to constitute a waiver by the Holders
of the Common Securities of any such Event of Default with respect to the
Common Securities for all purposes of this Declaration without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of all of the
Common Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, PROVIDED THAT, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where
the Holders of the Common Securities are deemed to have waived such
Event of Default under the Declaration as provided below in this
Section 2.6(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 2.6(b),
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<PAGE> 16
the Event of Default under the Declaration may only be waived by the
vote of the Holders of at least the proportion in liquidation amount
of the Common Securities that the relevant Super Majority represents
of the aggregate principal amount of the Debentures outstanding;
PROVIDED FURTHER, each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until 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 Institutional Trustee will be deemed to be acting solely on
behalf of the Holders of the Preferred Securities and only the Holders of the
Preferred Securities will have the right to direct the Institutional Trustee in
accordance with the terms of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Sections 316(a)(1)(A) and 316(a)(1)(B) of
the Trust Indenture Act and such Sections 316(a)(1)(A) and 316(a)(1)(B) of the
Trust Indenture Act are hereby expressly excluded from this Declaration and the
Securities, as permitted by the Trust Indenture Act. Subject to the foregoing
provisions of this Section 2.6(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 Institutional Trustee at the direction of the Holders of the Preferred
Securities, constitutes a waiver of the corresponding Event of Default under
this Declaration. The foregoing provisions of this Section 2.6(c) shall be in
lieu of 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 2.7 Event of Default; Notice.
-------------------------
(a) The Institutional Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Securities, notices of all defaults with
respect to the Securities actually known to a Responsible Officer of the
Institutional Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7(a)
being hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided
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therein); PROVIDED THAT, except for a default in the payment of principal of
(or premium, if any) or interest on any of the Debentures or in the payment of
any sinking fund installment established for the Debentures, the Institutional
Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Institutional Trustee in good faith determines that
the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Institutional Trustee shall not be deemed to
have knowledge of any default except:
(i) a default under Sections 5.1(1) and 5.1(2) of the
Indenture; or
(ii) any default as to which the Institutional Trustee
shall have received written notice or of which a Responsible Officer
of the Institutional Trustee charged with the administration of the
Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
-----
The Trust is named "Textron Capital I," as such name may be
modified from time to time by the Regular 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 Regular Trustees.
SECTION 3.2 Office.
-------
The address of the principal office of the Trust is c/o
Textron Inc., 40 Westminster Street, Providence, Rhode Island 02903. On ten
Business Days written notice to the Holders of Securities, the Regular Trustees
may designate another principal office.
SECTION 3.3 Purpose.
--------
The exclusive purposes and functions of the Trust are (a) to
issue and sell Securities and use the proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only those
other activities necessary, or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its assets, or otherwise undertake (or permit to be undertaken) any activity
that would cause the Trust not to be
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classified for United States federal income tax purposes as a grantor trust.
SECTION 3.4 Authority.
----------
Subject to the limitations provided in this Declaration and to
the specific duties of the Institutional Trustee, the Regular Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust.
An action taken by the Regular Trustees in accordance with their powers shall
constitute the act of and serve to bind the Trust and an action taken by the
Institutional Trustee on behalf of the Trust in accordance with its powers
shall constitute the act of and serve to bind the Trust. In dealing with the
Trustees acting on behalf of the Trust, no person shall be required to inquire
into the authority of the Trustees to bind the Trust. Persons dealing with the
Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration.
SECTION 3.5 Title to Property of the Trust.
-------------------------------
Except as provided in Section 3.8 with respect to the
Debentures and the Institutional Trustee Account or as otherwise provided in
this Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial interest in the assets of the
Trust.
SECTION 3.6 Powers and Duties of the Regular Trustees.
------------------------------------------
The Regular Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Preferred Securities and the
Common Securities in accordance with this Declaration; PROVIDED,
HOWEVER, that the Trust may issue no more than one series of Preferred
Securities and no more than one series of Common Securities, and,
PROVIDED FURTHER, that there shall be no interests in the Trust other
than the Securities, and the issuance of Securities shall be limited to
a simultaneous issuance of both Preferred Securities and Common
Securities on each Closing Date;
(b) in connection with the issue and sale of the
Preferred Securities, at the direction of the Sponsor, to:
(i) execute and file with the Commission the
registration statement on Form S-3 prepared by the Sponsor,
including any amendments thereto, pertaining to the Preferred
Securities;
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(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 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, Inc. or any
other national stock exchange or the Nasdaq Stock Market's
National Market for listing upon notice of issuance of any
Preferred Securities;
(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
(v) execute and enter into the Underwriting
Agreement and Pricing Agreement providing for the sale of the
Preferred Securities;
(c) to acquire the Debentures with the proceeds of the
sale of the Preferred Securities and the Common Securities; PROVIDED,
HOWEVER, that the Regular Trustees shall cause legal title to the
Debentures to be held of record in the name of the Institutional
Trustee for the benefit of the Holders of the Preferred Securities and
the Holders of Common Securities;
(d) to give the Sponsor and the Institutional Trustee
prompt written notice of the occurrence of a Special Event; PROVIDED
THAT the Regular Trustees shall consult with the Sponsor and the
Institutional Trustee before taking or refraining from taking any
Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices to
the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may
be required of the Regular Trustees pursuant to the terms of the
Securities;
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(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant to
Section 3.8(e), the Institutional Trustee has the exclusive power to
bring such Legal Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable compensation
for such services;
(i) to 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 Institutional Trustee,
which certificate may be executed by any Regular 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 Regular Trustees
determine in their discretion to be necessary or desirable in carrying
out the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
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(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 Regular Trustees, on behalf of the Trust.
The Regular Trustees must exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3, and the Regular Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust
set forth in Section 3.3.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Institutional Trustee set forth in
Section 3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees.
-----------------------------------------------------
(a) The Trust shall not, and the Trustees (including
the Institutional Trustee) shall not, engage in any activity other than as
required or authorized by this Declaration. In particular, the Trust shall not
and the Trustees (including the Institutional Trustee) shall cause the Trust
not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all such proceeds to
Holders of Securities pursuant to the terms of this Declaration and of
the Securities;
(ii) acquire any assets other than as expressly provided
herein;
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<PAGE> 22
(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 this Amended and Restated
Declaration or Annex I, (A) direct the time, method and place of exercising any
trust or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the Indenture,
(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 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 3.8 Powers and Duties of the Institutional Trustee.
-----------------------------------------------
(a) The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 5.6. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Regular Trustees or to the
Delaware Trustee (if the Institutional Trustee does not also act as Delaware
Trustee).
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Institutional Trustee Account") in the
name of and under the exclusive control of the Institutional Trustee
on behalf of the Holders of the Securities and, upon the receipt of
payments of funds made in respect
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<PAGE> 23
of the Debentures held by the Institutional Trustee, deposit such
funds into the Institutional Trustee Account and make payments to the
Holders of the Preferred Securities and Holders of the Common
Securities from the Institutional Trustee Account in accordance with
Section 6.1. Funds in the Institutional Trustee Account shall be held
uninvested until disbursed in accordance with this Declaration. The
Institutional Trustee Account shall be an account that is maintained
with a banking institution the rating on whose long-term unsecured
indebtedness is at least equal to the rating assigned to the Preferred
Securities by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(ii) engage in such ministerial activities 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
Regular Trustees in accordance with the terms of the Securities,
engage in such ministerial activities 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 Institutional Trustee shall take all actions
and perform such duties as may be specifically required of the Institutional
Trustee pursuant to the terms of the Securities.
(e) The Institutional Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or the
Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Institutional Trustee shall not resign as a
Trustee unless either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been
appointed and has accepted that appointment in accordance with Section
5.6.
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(g) The Institutional Trustee shall have the legal
power to exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default actually known to a
Responsible Officer of the Institutional Trustee occurs and is continuing, the
Institutional Trustee shall, for the benefit of Holders of the Securities,
enforce its rights as holder of the Debentures subject to the rights of the
Holders pursuant to the terms of such Securities.
(h) The Institutional Trustee may authorize one or more
Persons (each, a "Paying Agent") to pay Distributions, redemption payments or
liquidation payments on behalf of the Trust with respect to all securities and
any such Paying Agent shall comply with Section 317(b) of the Trust Indenture
Act. Any Paying Agent may be removed by the Institutional Trustee at any time
and a successor Paying Agent or additional Paying Agents may be appointed at
any time by the Institutional Trustee.
(i) Subject to this Section 3.8, the Institutional
Trustee shall have none of the duties, liabilities, powers or the authority of
the Regular Trustees set forth in Section 3.6.
The Institutional Trustee must exercise the powers set forth
in this Section 3.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 3.3, and the Institutional Trustee
shall not take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 3.3.
SECTION 3.9 Certain Duties and Responsibilities of the Institutional
Trustee.
--------------------------------------------------------
(a) The Institutional Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Institutional Trustee has actual knowledge, the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in 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 Institutional Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
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(i) prior to the occurrence of an Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the
Institutional Trustee shall be determined solely by the
express provisions of this Declaration and the Institutional
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall be
read into this Declaration against the Institutional Trustee;
and
(B) in the absence of bad faith on the part of
the Institutional Trustee, the Institutional Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Institutional
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Institutional Trustee, the
Institutional Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Institutional Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of
the Institutional Trustee, unless it shall be proved that the
Institutional Trustee was negligent in ascertaining the pertinent
facts;
(iii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith
in accordance with the direction of the Holders of not less than a
Majority in liquidation amount of the Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Institutional Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds
or liability is not reasonably assured to it under the terms of this
Declaration or indemnity reasonably satisfactory to the Institutional
20
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Trustee against such risk or liability is not reasonably assured to
it;
(v) the Institutional Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of the
Debentures and the Institutional Trustee Account shall be to deal with
such property in a similar manner as the Institutional Trustee deals
with similar property for its own account, subject to the protections
and limitations on liability afforded to the Institutional Trustee
under this Declaration and the Trust Indenture Act;
(vi) the Institutional Trustee shall have no duty or
liability for or with respect to the value, genuineness, existence or
sufficiency of the Debentures or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Institutional Trustee shall not be liable for
any interest on any money received by it except as it may otherwise
agree with the Sponsor. Money held by the Institutional Trustee need
not be segregated from other funds held by it except in relation to
the Institutional Trustee Account maintained by the Institutional
Trustee pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law; and
(viii) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Regular Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Institutional Trustee.
----------------------------------------
(a) Subject to the provisions of Section 3.9:
(i) the Institutional Trustee may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be sufficiently
evidenced by an Officers' Certificate;
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(iii) whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Institutional Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Sponsor or the Regular Trustees;
(iv) the Institutional Trustee shall have no duty to see
to any recording, filing or registration of any instrument (including
any financing or continuation statement or any filing under tax or
securities laws) or any rerecording, refiling or registration thereof;
(v) the Institutional Trustee may consult with counsel
or other experts and the advice or opinion of such counsel and experts
with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Institutional
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction;
(vi) the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any Holder, unless
such Holder shall have provided to the Institutional Trustee security
and indemnity, reasonably satisfactory to the Institutional Trustee,
against the costs, expenses (including attorneys' fees and expenses
and the expenses of the Institutional Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying
with such request or direction, including such reasonable advances as
may be requested by the Institutional Trustee provided, that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve the
Institutional Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Institutional Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Institutional Trustee, in its
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discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit;
(viii) the Institutional Trustee may execute any of the trusts
or powers hereunder or perform any duties hereunder either directly or
by or through agents, custodians, nominees or attorneys and the
Institutional Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due
care by it hereunder;
(ix) any action taken by the Institutional Trustee or
its agents hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Institutional Trustee or its
agents alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to the
authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by the Institutional
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Institutional Trustee (i) may request
instructions from the Holders of the Securities which instructions may
only be given by the Holders of the same proportion in liquidation
amount of the Securities as would be entitled to direct the
Institutional Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively relying on
or acting in or accordance with such instructions; and
(xi) except as otherwise expressly provided by this
Declaration, the Institutional Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration.
(b) No provision of this Declaration shall be deemed to
impose any duty or obligation on the Institutional Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or imposed
on it, in any jurisdiction in which it shall be illegal, or in which the
Institutional Trustee shall be unqualified or incompetent in accordance with
applicable law, to perform any such act or acts, or to exercise any such right,
power, duty or obligation. No permissive power or authority available to the
Institutional Trustee shall be construed to be a duty.
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SECTION 3.11 Delaware Trustee.
-----------------
Notwithstanding any other provision of this Declaration other
than Section 5.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Institutional Trustee described
in this Declaration. Except as set forth in Section 5.2, the Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of Section 3807 of the Business Trust Act.
SECTION 3.12 Execution of Documents.
-----------------------
Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act, a majority of or, if
there are only two, any Regular Trustee or, if there is only one, such Regular
Trustee is authorized to execute on behalf of the Trust any documents that the
Regular Trustees have the power and authority to execute pursuant to Section
3.6; PROVIDED THAT, the registration statement referred to in Section
3.6(b)(i), including any amendments thereto, shall be signed by all of the
Regular 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 have existence for fifty-five (55) years from the
Closing Date.
SECTION 3.15 Mergers.
--------
(a) The Trust may not consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer or lease its properties
and assets substantially as an entirety to any corporation or other body,
except as described in Section 3.15(b) and (c).
(b) The Trust may, with the consent of the Regular
Trustees or, if there are more than two, a majority of the Regular Trustees and
without the consent of the Holders of the Securities, the Delaware Trustee or
the Institutional Trustee,
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consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State; PROVIDED THAT:
(i) such successor entity (the "Successor Entity")
either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other
securities having substantially the same terms as the
Preferred Securities (the "Successor Securities") so long as
the Successor Securities rank the same as the Preferred
Securities rank with respect to Distributions and payments
upon liquidation, redemption and otherwise;
(ii) the Debenture Issuer expressly acknowledges a
trustee of the Successor Entity that possesses the same powers and
duties as the Institutional Trustee as the Holder of the Debentures;
(iii) the Preferred Securities or any Successor
Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or with
any other organization on which the Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation or
replacement does not cause the Preferred Securities (including any
Successor Securities) to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any Successor
Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the Preferred Securities as a
result of such merger, consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose 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 to the Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
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and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the new
entity); and
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Preferred Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall
not, except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if 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 4.1 Sponsor's Purchase of Common Securities.
----------------------------------------
On the Closing Date the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Preferred Securities are sold.
SECTION 4.2 Responsibilities of the Sponsor.
--------------------------------
In connection with the issue and sale of the Preferred
Securities, the Sponsor 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 registration statement on Form S-3 in relation to the
Preferred Securities, including any amendments thereto;
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(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;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A relating to the
registration of the Preferred Securities under Section 12(b) of the
Exchange Act, including any amendments thereto; and
(e) to negotiate the terms of the Underwriting
Agreement and Pricing Agreement providing for the sale of the
Preferred Securities.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees.
-------------------
The number of Trustees initially shall be three (3), and:
(a) at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the
number of Trustees; and
(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a
majority in liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities,
PROVIDED, HOWEVER, THAT, the number of Trustees shall in no event be less than
two (2); provided further that (1) 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"); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated with the Parent
(a "Regular Trustee"); and (3) one Trustee shall be the Institutional Trustee
for so long as this Declaration is required to qualify as an indenture under
the Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
SECTION 5.2 Delaware Trustee.
-----------------
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
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(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and otherwise
meets the requirements of applicable law,
PROVIDED THAT, if the Institutional Trustee has its principal place of business
in the State of Delaware and otherwise meets the requirements of applicable
law, then the Institutional Trustee shall also be the Delaware Trustee and
Section 3.11 shall have no application.
SECTION 5.3 Institutional Trustee; Eligibility.
-----------------------------------
(a) There shall at all times be one Trustee which shall
act as Institutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then for the
purposes of this Section 5.3(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published; and
(iii) if the Trust is excluded from the definition of an
Investment Company solely by means of Rule 3a-7 and to the extent Rule
3a-7 requires a trustee having certain qualifications to hold title to
the "eligible assets" of the Trust, the Institutional Trustee shall
possess those qualifications.
(b) If at any time the Institutional Trustee shall
cease to be eligible to so act under Section 5.3(a), the Institutional Trustee
shall immediately resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Institutional Trustee has or shall acquire
any "conflicting interest" within the meaning of [SECTION] 310(b)
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of the Trust Indenture Act, the Institutional Trustee and the Holder of the
Common Securities (as if it were the obligor referred to in [SECTION] 310(b) of
the Trust Indenture Act) shall in all respects comply with the provisions of
[SECTION] 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed
to be specifically described in this Declaration for purposes of clause (i) of
the first provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Institutional Trustee shall be as set
forth in Section 5.5 hereof.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
-------------------------------------------------------
Each Regular Trustee and the Delaware Trustee (unless the
Institutional Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees; Additional Powers of Regular Trustees.
--------------------------------------------------------
(a) The initial Regular Trustees shall be:
Richard A. Watson
Gregory E. Hudson
The initial Delaware Trustee shall be:
The Chase Manhattan Bank (USA)
802 Delaware Ave. -- 13th Floor
Wilmington, Delaware 19801
The initial Institutional Trustee shall be:
The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
Brooklyn, New York 11245
(b) Except as expressly set forth in this Declaration
and except if a meeting of the Regular Trustees is called with respect to any
matter over which the Regular Trustees have power to act, any power of the
Regular Trustees may be exercised by, or with the consent of, any one such
Regular Trustee.
(c) Unless otherwise determined by the Regular
Trustees, and except as otherwise required by the Business Trust Act or
applicable law, any Regular Trustee is authorized to execute on behalf of the
Trust any documents which the Regular Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by a majority of the Regular Trustees.
(d) A Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Regular Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
SECTION 5.6 Appointment, Removal and Resignation of Trustees.
-------------------------------------------------
(a) Subject to Section 5.6(b), Trustees may be
appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written
instrument executed by the Sponsor; and
(ii) after the issuance of any Securities, by vote of
the Holders of a Majority in liquidation amount of the Common
Securities voting as a class at a meeting of the Holders of the Common
Securities.
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(b)(i) The Trustee that acts as Institutional Trustee shall
not be removed in accordance with Section 5.6(a) until a Successor
Institutional Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Institutional Trustee and
delivered to the Regular Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not
be removed in accordance with this Section 5.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death, removal or
resignation. Any Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing signed by the Trustee and
delivered to the Sponsor and the Trust, which resignation shall take effect
upon such delivery or upon such later date as is specified therein; PROVIDED,
HOWEVER, that:
(i) No such resignation of the Trustee that acts as the
Institutional Trustee shall be effective:
(A) until a Successor Institutional Trustee has
been appointed and has accepted such appointment by instrument
executed by such Successor Institutional Trustee and delivered
to the Trust, the Sponsor and the resigning Institutional
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof distributed to
the holders of the Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor Delaware Trustee
has been appointed and has accepted such appointment by instrument
executed by such Successor Delaware Trustee and delivered to the
Trust, the Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use
their best efforts to promptly appoint a Successor Delaware Trustee or
Successor Institutional Trustee as the case may be if the Institutional Trustee
or the Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.
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(e) If no Successor Institutional Trustee or Successor
Delaware Trustee shall have been appointed and accepted appointment as provided
in this Section 5.6 within 60 days after delivery to the Sponsor and the Trust
of an instrument of resignation, the resigning Institutional Trustee or
Delaware Trustee, as applicable, may petition any court of competent
jurisdiction for appointment of a Successor Institutional Trustee or Successor
Delaware Trustee. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper and prescribe, appoint a Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
(f) No Institutional Trustee or Delaware Trustee shall
be liable for the acts or omissions to act of any Successor Institutional
Trustee or Successor Delaware Trustee, as the case may be.
SECTION 5.7 Vacancies among Trustees.
-------------------------
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 5.1, or if the number of
Trustees is increased pursuant to Section 5.1, a vacancy shall occur. A
resolution certifying the existence of such vacancy by the Regular Trustees or,
if there are more than two, a majority of the Regular Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.6.
SECTION 5.8 Effect of Vacancies.
--------------------
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the
appointment of a Regular Trustee in accordance with Section 5.6, the Regular
Trustees in office, regardless of their number, shall have all the powers
granted to the Regular Trustees and shall discharge all the duties imposed upon
the Regular Trustees by this Declaration.
SECTION 5.9 Meetings.
---------
If there is more than one Regular Trustee, meetings of the
Regular Trustees shall be held from time to time upon the call of any Regular
Trustee. Regular meetings of the Regular Trustees may be held at a time and
place fixed by resolution of the Regular Trustees. Notice of any in-person
meetings of the Regular Trustees shall be hand delivered or otherwise delivered
in writing (including by facsimile, with a hard copy by overnight courier) not
less than 48 hours before such meeting. Notice of any telephonic meetings of
the Regular Trustees or any committee
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thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Regular Trustee at a meeting shall constitute a waiver of
notice of such meeting except where a Regular Trustee attends a meeting for the
express purpose of objecting to the transaction of any activity on the ground
that the meeting has not been lawfully called or convened. Unless provided
otherwise in this Declaration, any action of the Regular Trustees may be taken
at a meeting by vote of a majority of the Regular Trustees present (whether in
person or by telephone) and eligible to vote with respect to such matter,
provided that a Quorum is present, or without a meeting by the unanimous
written consent of the Regular Trustees. In the event there is only one
Regular Trustee, any and all action of such Regular Trustee shall be evidenced
by a written consent of such Regular Trustee.
SECTION 5.10 Delegation of Power.
--------------------
(a) Any Regular Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) the Regular Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Regular Trustees or otherwise as the Regular Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
Section 5.11 Merger, Conversion, Consolidation or Succession to Business.
------------------------------------------------------------
Any corporation into which the Institutional Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either
may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Institutional Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article,
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without the execution or filing of any paper or any further act on the part of
any of the parties hereto.
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 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 Interest (as defined in the Indenture)), premium and/or principal on
the Debentures held by the Institutional Trustee (the amount of any such
payment being a "Payment Amount"), the Institutional 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 7.1 General Provisions Regarding Securities.
----------------------------------------
(a) The Regular Trustees shall on behalf of the Trust
issue one class of preferred securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in
Annex I (the "Preferred Securities") and one class of common securities
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Common Securities.") The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Preferred Securities and the Common Securities.
(b) The Certificates shall be signed on behalf of the
Trust by a Regular Trustee. Such signature shall be the manual signature of
any present or any future Regular Trustee. In case any Regular Trustee of the
Trust who shall have signed any of the Securities shall cease to be such
Regular Trustee before the Certificates so signed shall be delivered by the
Trust, such Certificates nevertheless may be delivered as though the person who
signed such Certificates had not ceased to be such Regular Trustee; and any
Certificate may be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the Regular Trustees of the
Trust, although at the date of the execution and delivery of the Declara-
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tion any such person was not such a Regular Trustee. Certificates shall be
printed, lithographed or engraved or may be produced in any other manner as is
reasonably acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of identification or
designation and such legends or endorsements as the Regular Trustees may deem
appropriate, or as may be required to comply with any law or with any rule or
regulation of any stock exchange on which Securities may be listed, or to
conform to usage.
(c) The 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.
(d) 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.
(e) 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.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
---------------------
(a) The Trust shall terminate:
(i) upon the bankruptcy of the Holder of the Common
Securities or the Sponsor;
(ii) upon 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 cancellation with respect
to the Trust or the revocation of the Holder of the Common Securities
or the Sponsor's charter and the expiration of 90 days after the date
of revocation without a reinstatement thereof;
(iii) upon the entry of a decree of judicial dissolution
of the Holder of the Common Securities, the Sponsor or the Trust;
(iv) when all of the Securities shall have been called
for redemption and the amounts necessary for redemption thereof shall
have been paid to the Holders in accordance with the terms of the
Securities;
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(v) upon the occurrence and continuation of a Special
Event pursuant to which the Trust shall have been dissolved in
accordance with the terms of the Securities and all of the Debentures
endorsed thereon shall have been distributed to the Holders of
Securities in exchange for all of the Securities; or
(vi) before the issuance of any Securities, with the
consent of all of the Regular Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a), the Trustees shall file a certificate
of cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities.
-----------------------
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. Any transfer or purported transfer of any
Security not made in accordance with this Declaration shall be null and void.
(b) Subject to this Article IX, Preferred Securities
shall be freely transferable.
(c) Subject to this Article IX, the Sponsor and any
Related Party may only transfer Common Securities to the Sponsor or a Related
Party of the Sponsor; PROVIDED THAT, any such transfer is subject to the
condition precedent that the transferor obtain the written opinion of
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.
SECTION 9.2 Transfer of Certificates.
-------------------------
The Regular Trustees shall provide for the registration of
Certificates and of transfers of Certificates, which will be
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effected without charge but only upon payment (with such indemnity as the
Regular Trustees may require) in respect of any tax or other government charges
that may be imposed in relation to it. Upon surrender for registration of
transfer of any Certificate, the Regular Trustees shall cause one or more new
Certificates to be issued in the name of the designated transferee or
transferees. Every Certificate surrendered for registration of transfer shall
be accompanied by a written instrument of transfer in form satisfactory to the
Regular Trustees duly executed by the Holder or such Holder's attorney duly
authorized in writing. Each Certificate surrendered for registration of
transfer shall be canceled by the Regular Trustees. A transferee of a
Certificate shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
SECTION 9.3 Deemed Security Holders.
------------------------
The Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust shall
have actual or other notice thereof.
SECTION 9.4 Book Entry Interests.
---------------------
Unless otherwise specified in the terms of the Preferred
Securities, the Preferred Securities Certificates, on original issuance, will
be issued in the form of one or more, fully registered, global Preferred
Security Certificates (each a "Global Certificate"), to be delivered to DTC,
the initial Clearing Agency, by, or on behalf of, the Trust. Such Global
Certificates shall initially be registered on the books and records of the
Trust in the name of Cede & Co., the nominee of DTC, and no Preferred Security
Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such
Global Certificates, except as provided in Section 9.7. Unless and until
definitive, fully registered Preferred Security Certificates (the "Definitive
Preferred Security Certificates") have been issued to the Preferred Security
Beneficial Owners pursuant to Section 9.7:
(a) the provisions of this Section 9.4 shall be in full
force and effect;
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(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Declaration
(including the payment of Distributions on the Global Certificates and
receiving approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates
and shall have no obligation to the Preferred Security Beneficial
Owners;
(c) to the extent that the provisions of this Section
9.4 conflict with any other provisions of this Declaration, the
provisions of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial
Owners shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing
Agency Participants.
SECTION 9.5 Notices to Clearing Agency.
---------------------------
Whenever a notice or other communication to the Preferred
Security Holders is required under this Declaration, unless and until
Definitive Preferred Security Certificates shall have been issued to the
Preferred Security Beneficial Owners pursuant to Section 9.7, the Regular
Trustees shall give all such notices and communications specified herein to be
given to the Preferred Security Holders to the Clearing Agency, and shall have
no notice obligations to the Preferred Security Beneficial Owners.
SECTION 9.6 Appointment of Successor Clearing Agency.
-----------------------------------------
If any Clearing Agency elects to discontinue its services as
securities depositary with respect to the Preferred Securities, the Regular
Trustees may, in their sole discretion, appoint a successor Clearing Agency
with respect to such Preferred Securities.
SECTION 9.7 Definitive Preferred Security Certificates.
-------------------------------------------
If:
(a) a Clearing Agency elects to discontinue its
services as securities depositary with respect to the Preferred
Securities and a successor Clearing Agency is not appointed within 90
days after such discontinuance pursuant to Section 9.6; or
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<PAGE> 43
(b) the Regular Trustees elect after consultation with
the Sponsor to terminate the book entry system through the Clearing
Agency with respect to the Preferred Securities,
then:
(c) Definitive Preferred Security Certificates shall be
prepared by the Regular Trustees on behalf of the Trust with respect
to such Preferred Securities; and
(d) upon surrender of the Global Certificates by the
Clearing Agency, accompanied by registration instructions, the Regular
Trustees shall cause Definitive Certificates to be delivered to
Preferred Security Beneficial Owners in accordance with the
instructions of the Clearing Agency. Neither the Trustees nor the
Trust shall be liable for any delay in delivery of such instructions
and each of them may conclusively rely on and shall be protected in
relying on, said instructions of the Clearing Agency. The Definitive
Preferred Security Certificates shall be printed, lithographed or
engraved or may be produced in any other manner as is reasonably
acceptable to the Regular Trustees, as evidenced by their execution
thereof, and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements as the
Regular Trustees may deem appropriate, or as may be required to comply
with any law or with any rule or regulation made pursuant thereto or
with any rule or regulation of any stock exchange on which Preferred
Securities may be listed, or to conform to usage.
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates.
--------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to
the Regular Trustees, or if the Regular Trustees shall receive
evidence to their satisfaction of the destruction, loss or theft of
any Certificate; and
(b) there shall be delivered to the Regular Trustees
such security or indemnity as may be required by them to keep each of
them harmless.
then, in the absence of notice that such Certificate shall have been acquired
by a bona fide purchaser, any Regular Trustee on behalf of the Trust shall
execute and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like denomination.
In connection with the issuance of any new Certificate under this Section 9.8,
the
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Regular Trustees may require the payment of a sum sufficient to cover any tax
or other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability.
----------
(a) Except as expressly set forth in this Declaration,
the 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;
and
(ii) be 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 10.2 Exculpation.
------------
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Trust or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of the Trust and
in a manner such Indemnified Person reasonably believed to be within the scope
of the authority conferred on such Indemnified Person by this Declaration or by
law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's gross
negligence or willful misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the 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 10.3 Fiduciary Duty.
---------------
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or to any other Covered Person, an Indemnified
Person acting under this Declaration shall not be liable to the Trust or to any
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity (other than the duties imposed on the Institutional Trustee
under the Trust Indenture Act), are agreed by the parties hereto to replace
such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered 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.
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<PAGE> 46
(c) Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such
interests and factors as it desires, including its own interests, and
shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under such express standard
and shall not be subject to any other or different standard imposed by
this Declaration or by applicable law.
SECTION 10.4 Indemnification.
----------------
(a) (i) The Debenture Issuer shall indemnify, to
the full extent permitted by law, any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or
was a Company Indemnified Person against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the Trust, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the
Company Indemnified Person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is
a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of the Trust to procure
a judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith
and in a manner he reasonably believed to be in
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<PAGE> 47
or not opposed to the best interests of the Trust and except that no
such indemnification shall be made in respect of any claim, issue or
matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such action or
suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the
case, such person is fairly and reasonably entitled to indemnity for
such expenses which such Court of Chancery or such other court shall
deem proper.
(iii) To the extent that a Company Indemnified Person
shall be successful on the merits or otherwise (including dismissal of
an action without prejudice or the settlement of an action without
admission of liability) in defense of any action, suit or proceeding
referred to in paragraphs (i) and (ii) of this Section 10.4(a), or in
defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii)
of this Section 10.4(a) (unless ordered by a court) shall be made by
the Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Regular Trustees by a majority
vote of a quorum consisting of such Regular Trustees who were not
parties to such action, suit or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested
Regular Trustees so directs, by independent legal counsel in a written
opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a
Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by
the Debenture Issuer in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such amount if it
shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section
10.4(a). Notwithstanding the foregoing, no advance shall be made by
the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Regular Trustees by a majority vote of a quorum of
disinterested Regular Trustees,
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(ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent
legal counsel in a written opinion or (iii) the Common Security Holder
of the Trust, that, based upon the facts known to the Regular Trustees,
counsel or the Common Security Holder at the time such determination is
made, such Company Indemnified Person acted in bad faith or in a manner
that such person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding,
that such Company Indemnified Person believed or had reasonable cause
to believe his conduct was unlawful. In no event shall any advance be
made in instances where the Regular Trustees, independent legal
counsel or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this
Section 10.4(a) shall not be deemed exclusive of any other rights to
which those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights
to indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer 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 Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 10.4(a) with respect to
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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 10.4(a) shall,
unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Institutional
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Institutional
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee and the Delaware Trustee (each
of the Persons in (i) through (iv) being referred to as a "Fiduciary
Indemnified Person") for, and to hold each Fiduciary Indemnified Person
harmless against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the acceptance or
administration or the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the satisfaction
and discharge of this Declaration.
SECTION 10.5 Outside Businesses.
-------------------
Any Covered Person, the Sponsor, the Delaware Trustee and the
Institutional 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, the Delaware Trustee, or the Institutional Trustee shall be obligated
to present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Institutional Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person, the Delaware
Trustee and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary
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for, trustee or agent for, or act on any committee or body of holders of,
securities or other obligations of the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
------------
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
---------------------------
(a) At all times during the existence of the Trust, the
Regular Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail,
each transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, 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 of the Trust by a firm of independent certified public
accountants selected by the Regular Trustees.
(b) The Regular Trustees shall cause to be prepared and
delivered to each of the Holders of Securities, within 90 days after the end of
each Fiscal Year of the Trust, annual financial statements of the Trust,
including a balance sheet of the Trust as of the end of such Fiscal Year, and
the related statements of income or loss;
(c) The Regular Trustees shall cause to be duly
prepared and delivered to each of the Holders of Securities, any annual United
States federal income tax information statement, required by the Code,
containing such information with regard to the Securities held by each Holder
as is required by the Code and the Treasury Regulations. Notwithstanding any
right under the Code to deliver any such statement at a later date, the Regular
Trustees shall endeavor to deliver all such statements within 30 days after the
end of each Fiscal Year of the Trust.
(d) The Regular Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Regular Trustees on behalf of the Trust with any
state or local taxing authority.
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SECTION 11.3 Banking.
--------
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; PROVIDED, HOWEVER, that all payments of
funds in respect of the Debentures held by the Institutional Trustee shall be
made directly to the Institutional Trustee Account and no other funds of the
Trust shall be deposited in the Institutional Trustee Account. The sole
signatories for such accounts shall be designated by the Regular Trustees;
PROVIDED, HOWEVER, that the Institutional Trustee shall designate the
signatories for the Institutional Trustee Account.
SECTION 11.4 Withholding.
------------
The Trust and the Regular 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 Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a distribution in the amount of the withholding to the
Holder. In the event of any claimed 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 12.1 Amendments.
-----------
(a) Except as otherwise provided in this Declaration or
by any applicable terms of the Securities, this Declaration may only be amended
by a written instrument approved and executed by:
(i) the Regular Trustees (or, if there are more than
two Regular Trustees a majority of the Regular Trustees);
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(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Institutional Trustee, the
Institutional Trustee; and
(iii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Delaware Trustee, the
Delaware Trustee;
(b) no amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Institutional Trustee shall have first received an Officers'
Certificate from each of the Trust and the Sponsor that such amendment
is permitted by, and conforms to, the terms of this Declaration
(including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Institutional Trustee, the Institutional Trustee shall have first
received:
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel
to the Sponsor or the Trust) that such amendment is permitted
by, and conforms to, the terms of this Declaration (including
the terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the trust to fail to continue to be
classified for purposes of United States federal income
taxation as a grantor trust;
(B) reduce or otherwise adversely affect the
powers of the Institutional Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) at such time after the Trust has issued any
Securities that remain outstanding, any amendment that would adversely affect
the rights, privileges or preferences of any
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Holder of Securities may be effected only with such additional requirements as
may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders of the Securities;
(e) Article IV shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities
and;
(f) the rights of the holders of the Common Securities
under Article V to increase or decrease the number of, and appoint and remove
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Common Securities; and
(g) notwithstanding Section 12.1(c), this Declaration
may be amended without the consent of the Holders of the Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this
Declaration that may be defective or inconsistent with any other
provision of this Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor;
(iv) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory authority
which amendment does not have a material adverse effect on the right,
preferences or privileges of the Holders; and
(v) to modify, eliminate and add to any provision of
the Amended Declaration to such extent as may be necessary.
SECTION 12.2 Meetings of the Holders of Securities; Action by Written
--------------------------------------------------------
Consent.
--------
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Regular Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration,
the terms of the Securities or the rules of any stock exchange on which the
Preferred Securities are listed or admitted for trading. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in liquidation
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amount of such class of Securities. Such direction shall be given by
delivering to the Regular Trustees one or more calls in a writing stating that
the signing Holders of Securities wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be called. Any Holders
of Securities calling a meeting shall specify in writing the Security
Certificates held by the Holders of Securities exercising the right to call a
meeting and only those Securities specified shall be counted for purposes of
determining whether the required percentage set forth in the second sentence of
this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to meetings of
Holders of Securities:
(i) notice of any such meeting shall be given to all
the Holders of Securities having a right to vote thereat at least 7
days 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 amount of
Securities in liquidation amount that would be necessary to authorize
or take such action at a meeting at which all Holders of Securities
having a right to vote thereon were present and voting. Prompt notice
of the taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not consented in
writing. The Regular Trustees may specify that any written ballot
submitted to the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the time
specified by the Regular Trustees;
(ii) each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a Holder of Securities
is entitled to participate, including waiving notice of any meeting,
or voting or participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date thereof unless
otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder of Securities executing it. Except as
otherwise provided herein, all matters relating to the giving, voting
or validity of proxies shall be governed by the General Corporation
Law of the State of Delaware relating to proxies, and judicial
interpretations thereunder, as if the
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Trust were a Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other Person that the
Regular Trustees may designate; and
(iv) unless the 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, otherwise provides, the Regular Trustees, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote.
ARTICLE XIII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of Institutional Trustee.
--------------------------------------------------------
The Trustee that acts as initial Institutional Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants
to the Trust and the Sponsor at the time of the Successor Institutional
Trustee's acceptance of its appointment as Institutional Trustee that:
(a) the Institutional Trustee is a national banking
association with trust powers, duly organized, validly existing and in
good standing under the laws of the United States, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
(b) the execution, delivery and performance by the
Institutional Trustee of the Declaration has been duly authorized by
all necessary corporate action on the part of the Institutional
Trustee. The Declaration has been duly executed and delivered by the
Institutional Trustee, and it constitutes a legal, valid and binding
obligation of the Institutional Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
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<PAGE> 56
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) the execution, delivery and performance of the
Declaration by the Institutional Trustee does not conflict with or
constitute a breach of the Articles of Organization or By-laws of the
Institutional Trustee; and
(d) no consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the
Institutional Trustee, of the Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
---------------------------------------------------
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and
the Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) The Delaware Trustee is a Delaware banking
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform
its obligations under the Certificate of Trust and the Declaration.
The Declaration under Delaware law constitutes a legal, valid and
binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws
affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the
enforcement of such remedies is considered in a proceeding in equity
or at law).
(c) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the Delaware
Trustee, of the Declaration.
(d) The Delaware Trustee is a Delaware banking
corporation with trust powers, duly organized, validly existing and in
good standing under the laws of the State of Delaware, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration.
(e) No consent, approval or authorization of, or
registration with or notice to, any State or Federal banking authority
is required for the execution, delivery or performance by the Delaware
Trustee of the Declaration.
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person, an entity which has its principal place of business in the
State of Delaware.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
--------
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular
Trustees at the Trust's mailing address set forth below (or such other
address as the Trust may give notice of to the Holders of the
Securities):
TEXTRON CAPITAL I
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention:
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may
give notice of to the Holders of the Securities):
The Chase Manhattan Bank (USA)
802 Delaware Ave. -- 13th Floor
Wilmington, Delaware 19801
(c) if given to the Institutional Trustee, at its
Corporate Trust Office to the attention of the Institutional Trust
Group (or such other address as the Institutional Trustee may give
notice of to the Holders of the Securities):
(d) if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other
address as the Holder of the Common Securities may give notice of to
the Trust):
Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention:
(e) if given to any other Holder, at the address set
forth on the books and records of the Trust.
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All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 Governing Law.
--------------
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
-------------------------
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust.
The provisions of this Declaration shall be interpreted to further this
intention of the parties.
SECTION 14.4 Headings.
---------
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 14.5 Successors and Assigns
----------------------
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
SECTION 14.6 Partial Enforceability.
-----------------------
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 Counterparts.
-------------
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature
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pages shall be read as though one, and they shall have the same force and
effect as though all of the signers had signed a single signature page.
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<PAGE> 60
IN WITNESS WHEREOF, the undersigned has caused these presents
to be executed as of the day and year first above written.
---------------------------------
Richard A. Watson, as Regular
Trustee
---------------------------------
Gregory E. Hudson, as Regular
Trustee
THE CHASE MANHATTAN BANK (USA),
as Delaware Trustee
By:
----------------------------
Name: John W. Mack
Title: Second Vice President
THE CHASE MANHATTAN BANK, N.A., as
Institutional Trustee
By:
----------------------------
Name: Ronald J. Halleran
Title: Second Vice President
TEXTRON INC., as Sponsor
By:
----------------------------
Name:
Title:
TEXTRON INC., as Debenture Issuer
By:
----------------------------
Name:
Title:
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<PAGE> 61
ANNEX I
TERMS OF
___% TRUST ORIGINATED PREFERRED SECURITIES
___% TRUST ORIGINATED COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _______, 1996 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Preferred Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration or, if not defined in such
Declaration, as defined in the Prospectus referred to below):
1. Designation and Number.
-----------------------
(a) PREFERRED SECURITIES. [ ] Preferred
Securities of the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of [ ] dollars ($[ ]) and a
liquidation amount with respect to the assets of the Trust of $25 per preferred
security, are hereby designated for the purposes of identification only as
"_____% Trust Originated Preferred SecuritiesSM ('TOPrS'SM)" (the "Preferred
Securities"). The Preferred Security Certificates evidencing the Preferred
Securities shall be substantially in the form of Exhibit A-1 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice or to conform to the
rules of any stock exchange on which the Preferred Securities are listed.
(b) COMMON SECURITIES. [ ] Common
Securities of the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of [ ] dollars ($[ ]) and a
liquidation amount with respect to the assets of the Trust of $25 per common
security, are hereby designated for the purposes of identification only as
"______% Trust Originated Common Securities" (the "Common Securities"). The
Common Security Certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
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2. Distributions.
--------------
(a) Distributions payable on each Security will be
fixed at a rate per annum of ______% (the "Coupon Rate") of the stated
liquidation amount of $25 per Security, such rate being the rate of interest
payable on the Debentures to be held by the Institutional 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 cash distributions
and any such interest payable unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any
period will be computed for any full quarterly Distribution period on the basis
of a 360-day year 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 90-day quarter.
(b) Distributions on the Securities will be cumulative,
will accrue from ________, 1996, and will be payable quarterly in arrears, on
[March 31, June 30, September 30, and December 31] of each year, commencing on
__________, 1996, except as otherwise described below. The Debenture Issuer
has the right under the Indenture to defer payments of interest by extending
the interest payment period from time to time on the Debentures for a period
not exceeding 20 consecutive quarters (each an "Extension Period"), during
which Extension Period no interest shall be due and payable on the Debentures,
PROVIDED THAT no Extension Period shall last beyond the date of maturity of the
Debentures. As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, quarterly Distributions will continue to
accrue with interest thereon (to the extent permitted by applicable law) at the
Coupon Rate compounded quarterly during any such Extension Period. Prior to
the termination of any such Extension Period, the Debenture Issuer may further
extend such Extension Period; PROVIDED THAT such Extension Period together with
all such previous and further extensions thereof may not exceed 20 consecutive
quarters. Payments of accrued Distributions will be payable to Holders as they
appear on the books and records of the Trust on the first record date after the
end of the Extension Period. Upon the termination of any Extension Period and
the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Preferred
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Securities remain in book-entry only form, the relevant record dates shall be
one Business Day prior to the relevant payment dates which payment dates
correspond to the interest payment dates on the Debentures. Subject to any
applicable laws and regulations and the provisions of the Declaration, each
such payment in respect of the Preferred Securities will be made as described
under the heading "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company" in the Prospectus Supplement
dated______, 1996, to the Prospectus dated ______, 1996 (together, the
"Prospectus"), of the Trust included in the Registration Statement on Form S-3
of the Sponsor, the Trust, certain other business trusts and a certain
partnership. The relevant record dates for the Common Securities shall be the
same record date as for the Preferred Securities. If the Preferred Securities
shall not continue to remain in book-entry only form, the relevant record dates
for the Preferred Securities, shall conform to the rules of any securities
exchange on which the securities are listed and, if none, shall be selected by
the Regular Trustees, which dates shall be at least one Business Day but less
than 60 Business Days before the relevant payment dates, which payment dates
correspond to the interest payment dates on the Debentures. Distributions
payable on any Securities that are not punctually paid on any Distribution
payment date, as a result of the Debenture Issuer having failed to make a
payment under the Debentures, will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
(d) In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed Pro Rata (as defined herein) among the Holders of
the Securities.
3. Liquidation Distribution Upon Dissolution.
------------------------------------------
In the event of any voluntary or involuntary dissolution,
winding-up or termination of the Trust, the Holders of the Securities on the
date of the dissolution, winding-up or termination, as the case may be, will be
entitled to receive out of the assets of the Trust available for distribution
to Holders of Securities after satisfaction of liabilities of creditors an
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<PAGE> 64
amount equal to the aggregate of the stated liquidation amount of $25 per
Security plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution"), unless, in connection with
such dissolution, winding-up or termination, Debentures in an aggregate
principal amount equal to the aggregate stated liquidation amount of such
Securities, with an interest rate equal to the Coupon Rate of, and bearing
accrued and unpaid interest in an amount equal to the accrued and unpaid
Distributions on, such Securities, shall be distributed on a Pro Rata basis to
the Holders of the Securities in exchange for such Securities.
If, upon any such dissolution, the Liquidation Distribution
can be paid only in part because the Trust has insufficient assets available to
pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
----------------------------
(a) Upon the repayment of the Debentures in whole or in
part, whether at maturity or upon redemption (either at the option of the
Debenture Issuer or pursuant to a Special Event as described below), the
proceeds from such repayment or payment shall be simultaneously applied to
redeem Securities having an aggregate liquidation amount equal to the aggregate
principal amount of the Debentures so repaid or redeemed at a redemption price
of $25 per Security plus an amount equal to accrued and unpaid Distributions
thereon at the date of the redemption, payable in cash (the "Redemption
Price"). Holders will be given not less than 30 nor more than 60 days notice
of such redemption.
(b) If fewer than all the outstanding Securities are to
be so redeemed, the Common Securities and the Preferred Securities will be
redeemed Pro Rata and the Preferred Securities to be redeemed will be as
described in Section 4(f)(ii) below.
(c) If a Tax Event or an Investment Company Event (each
as defined below, and each a "Special Event") shall occur and be continuing the
Regular Trustees shall, except in certain limited circumstances in relation to
a Tax Event described in this Section 4(c), dissolve the Trust and, after
satisfaction of creditors, cause Debentures held by the Institutional Trustee,
having an aggregate principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the Coupon Rate of, and accrued
and unpaid interest equal to accrued and unpaid Distributions on, and having
the same record date for payment as the Securities, to be distributed to the
Holders of the Securities in liquidation of such Holders' interests in the
Trust on a Pro Rata basis, within 90 days following the occurrence of such
Special Event (the "90 Day Period"); PROVIDED, HOWEVER, that, as a condition of
such dissolution and distribution,
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the Regular Trustees shall have received an opinion of a nationally recognized
independent tax counsel 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 gain or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and the distribution of Debentures, and
PROVIDED, FURTHER, that, if at the time there is available to the Trust the
opportunity to eliminate, within the 90 Day Period, the Special Event by taking
some ministerial action, such as filing a form or making an election, or
pursuing some other similar reasonable measure that has no adverse effect on the
Trust, the Debenture Issuer, the Sponsor or the Holders of the Securities
("Ministerial Action"), the Trust will pursue such Ministerial Action in lieu of
dissolution.
If (i) in the event of a Tax Event, after receipt of a Tax
Event Opinion (as defined hereinafter) by the Regular Trustees, the Debenture
Issuer has received an opinion (a "Redemption Tax Opinion") of a nationally
recognized independent tax counsel experienced in such matters that, as a
result of a Tax Event, there is more than an insubstantial risk that the
Debenture Issuer would be precluded from deducting the interest on the
Debentures for United States federal income tax purposes even if the Debentures
were distributed to the Holders of Securities in liquidation of such Holders'
interests in the Trust as described in this Section 4(c), or (ii) in the event
of any Special Event, after receipt of a Tax Event Opinion or Investment
Company Event Opinion (as defined hereinafter), as the case may be, the Regular
Trustees shall have been informed by such tax counsel that a No Recognition
Opinion cannot be delivered to the Trust, the Debenture Issuer shall have the
right at any time, upon not less than 30 nor more than 60 days notice, to
redeem the Debentures in whole or in part for cash within 90 days following the
occurrence of such Special Event, and, following such redemption, Securities
with an aggregate liquidation amount equal to the aggregate principal amount of
the Debentures so redeemed shall be redeemed by the Trust at the Redemption
Price on a Pro Rata basis; PROVIDED, HOWEVER, that, if at the time there is
available to the Trust the opportunity to eliminate, within such 90 day period,
the Special Event by taking some Ministerial Action, the Trust or the Debenture
Issuer will pursue such Ministerial Action in lieu of redemption.
"Tax Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent tax counsel
experienced in such matters (a "Tax Event Opinion") to the effect that on or
after the date of the Prospectus Supplement, as a result of (a) any amendment
to, or change (including any announced prospective change) in, the laws (or any
regulations thereunder) of the United States or any political subdivision or
taxing authority therefor or therein, or (b) any amend-
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ment to, or change in, an interpretation or application of any such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority, which amendment or change is enacted, promulgated, issued or
announced or which interpretation or pronouncement is issued or announced or
which action is taken, in each case on or after the date of the Prospectus
Supplement, there is more than an insubstantial risk that (i) the Trust is or
will be within 90 days of the date thereof, subject to United States federal
income tax with respect to interest accrued or received on the Debentures, (ii)
the Trust is, or will be within 90 days of the date thereof, subject to more
than a de minimis amount of taxes, duties or other governmental charges, or
(iii) interest payable by the Debenture Issuer to the Trust on the Debentures is
not, or within 90 days of the date thereof will not be, deductible, in whole or
in part, by the Debenture Issuer for United States federal income tax purposes.
"Investment Company Event" means that the Regular Trustees
shall have received an opinion of a nationally recognized independent counsel
experienced in practice under the Investment Company Act (an "Investment
Company Event Opinion") that, as a result of 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"), there is a more than an insubstantial
risk 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 Prospectus
Supplement.
On and from the date fixed by the Regular Trustees for any
distribution of Debentures and dissolution of the Trust: (i) the Securities
will no longer be deemed to be outstanding, (ii) The Depository Trust Company
(the "Depository") or its nominee (or any successor Clearing Agency or its
nominee), as the record Holder of the Preferred Securities, will receive a
registered global certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates representing Securities,
except for certificates representing Preferred Securities held by the
Depository or its nominee (or any successor Clearing Agency or its nominee),
will be deemed to represent beneficial interests in the Debentures having an
aggregate principal amount equal to the aggregate stated liquidation amount of,
with an interest rate identical to the Coupon Rate of, and accrued and unpaid
interest equal to accrued and unpaid Distributions on such Securities until
such certificates are presented to the Debenture Issuer or its agent for
transfer or reissue.
(d) The Trust may not redeem fewer than all the
outstanding Securities unless all accrued and unpaid Distributions
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have been paid on all Securities for all quarterly Distribution periods
terminating on or before the date of redemption.
(e) If the Debentures are distributed to holders of the
Securities, pursuant to the terms of the Indenture, the Debenture Issuer will
use its best efforts to have the Debentures listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities were listed
immediately prior to the distribution of the Debentures.
(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 nor more than 60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption, will be the date
fixed for redemption of the Debentures. For purposes of the
calculation of the date of redemption or exchange and the dates on
which notices are given pursuant to this Section 4(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 Depository or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to each
Clearing Agency Participant (or Person on whose behalf such nominee
holds such securities) in accordance with the procedures applied by
such agency or nominee.
(iii) If Securities are to be redeemed and the Trust
gives a Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this Section 4
(which notice will be irrevocable), then (A) while the Preferred
Securities are in book-entry only form, with respect to the Preferred
Securities, by 12:00 noon, New York City time, on the redemption date,
provided that the
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<PAGE> 68
Debenture Issuer has paid the Institutional Trustee a sufficient
amount of cash in connection with the related redemption or maturity
of the Debentures, the Institutional Trustee will deposit irrevocably
with the Depository or its nominee (or successor Clearing Agency or
its nominee) funds sufficient to pay the applicable Redemption Price
with respect to the Preferred Securities and will give the Depository
irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Preferred Securities, and (B) with respect to
Preferred Securities issued in definitive form and Common Securities,
provided that the Debenture Issuer has paid the Institutional Trustee
a sufficient amount of cash in connection with the related redemption
or maturity of the Debentures, the Institutional Trustee will pay the
relevant Redemption Price to the Holders of such Securities by check
mailed to the address of the relevant Holder appearing on the books
and records of the Trust on the redemption date. If a
Redemption/Distribution Notice shall have been given and funds
deposited as required, if applicable, then immediately prior to the
close of business on the date of such deposit, or on the redemption
date, as applicable, distributions will cease to accrue on the
Securities so called for redemption and all rights of Holders of such
Securities so called for redemption will cease, except the right of
the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. Neither the Regular
Trustees nor the Trust shall be required to register or cause to be
registered the transfer of any Securities that have been so called for
redemption. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such
date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such
delay) except that, if such Business Day falls in the next calendar
year, such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not
paid either by the Institutional Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions
on such Securities will continue to accrue from the original
redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption
for purposes of calculating the Redemption Price.
(iv) Redemption/Distribution Notices shall be sent by
the Regular Trustees on behalf of the Trust to (A) in respect of the
Preferred Securities, the Depository or its nominee (or any successor
Clearing Agency or its nominee) if the Global Certificates have been
issued or, if Definitive
I-8
<PAGE> 69
Preferred Security Certificates have been issued, to the Holder
thereof, and (B) in respect of the Common Securities to the Holder
thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities
laws), provided the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, 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. Voting Rights - Preferred Securities.
-------------------------------------
(a) Except as provided under Sections 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
Securities will have no voting rights.
(b) Subject to the requirements set forth in this
paragraph, the Holders of a Majority in liquidation amount of the Preferred
Securities, voting separately as a class may direct the time, method, and place
of conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the Institutional
Trustee under the Declaration, including (i) directing the time, method, place
of conducting any proceeding for any remedy available to the Debenture Trustee,
or exercising any trust or power conferred on the Debenture Trustee with
respect to the Debentures, (ii) waive any past default and its consequences
that is waivable under Section ___ 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, 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 Institutional Trustee may only give such
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Preferred Securities which the
relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. The Institutional Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Preferred
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Institutional Trustee or the Debenture
Trustee as set forth above, the Institutional Trustee shall not take any action
in accordance with the directions of the Holders of the Preferred Securities
under this paragraph unless the Institutional 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. If the Institutional Trustee fails to enforce its
rights under the Declaration, any
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Holder of Preferred Securities may institute a legal proceeding directly
against any Person to enforce the Institutional Trustee's rights under the
Declaration without first instituting a legal proceeding against the
Institutional Trustee or any other Person. Notwithstanding the foregoing, 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 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.
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 Regular 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 (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.
6. Voting Rights - Common Securities.
----------------------------------
(a) Except as provided under Sections 6(b), (c) and 7
as otherwise required by law and the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled,
in accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only
after the Event of Default with respect to the Preferred Securities has been
cured, waived, or otherwise eliminated and subject to the requirements of the
second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding
I-10
<PAGE> 71
for any remedy available to the Institutional Trustee, or exercising any trust
or power conferred upon the Institutional Trustee under the Declaration,
including (i) directing the time, method, place of conducting any proceeding
for any remedy available to the Debenture Trustee, or exercising any trust or
power conferred on the Debenture Trustee with respect to the Debentures, (ii)
waive any past default and its consequences that is waivable under Section ____
of the Indenture, or (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable, PROVIDED
THAT, where a consent or action under the Indenture would require the consent
or act of the Holders of greater than a majority in principal amount of
Debentures affected thereby (a "Super Majority"), the Institutional Trustee may
only give such consent or take such action at the written direction of the
Holders of at least the proportion in liquidation amount of the Common
Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding. Pursuant to this Section 6(c),
the Institutional Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Preferred Securities. Other than with
respect to directing the time, method and place of conducting any remedy
available to the Institutional Trustee or the Debenture Trustee as set forth
above, the Institutional Trustee shall not take any action in accordance with
the directions of the Holders of the Common Securities under this paragraph
unless the Institutional Trustee has obtained an opinion of tax counsel to the
effect that for the purposes of United States federal income tax the Trust will
not be classified as other than a grantor trust on account of such action. If
the Institutional Trustee fails to enforce its rights under the Declaration,
any Holder of Common Securities may institute a legal proceeding directly
against any Person to enforce the Institutional Trustee's rights under the
Declaration, without first instituting a legal proceeding against the
Institutional 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 Regular 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.
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<PAGE> 72
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
----------------------------------------
(a) In addition to any requirements under Section 12.1
of the Declaration, if any proposed amendment to the Declaration provides for,
or the Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities as a
class, will be entitled to vote on such amendment or proposal (but not on any
other amendment or proposal) and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
liquidation amount of the Securities, voting together as a single class;
provided, however, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional
Trustee as the holder of the Debentures is required under the Indenture with
respect to any amendment, modification or termination on the Indenture or the
Debentures, the Institutional Trustee shall request the written direction of
the Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
voting together as a single class; PROVIDED, HOWEVER, that where a consent
under the Indenture would require the consent of the holders of greater than a
majority in aggregate principal amount of the Debentures (a "Super Majority"),
the Institutional Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Securities
which the relevant Super Majority represents of the aggregate principal amount
of the Debentures outstanding; PROVIDED, FURTHER, that the Institutional
Trustee shall not take any action in accordance with the directions of the
Holders of the Securities under this Section 7(b) unless the Institutional
Trustee has obtained 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.
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<PAGE> 73
8. Pro Rata.
---------
A reference in these terms of the Securities to any payment,
distribution or treatment as being "Pro Rata" shall mean pro rata to each
Holder of Securities according to the aggregate liquidation amount of the
Securities held by the relevant Holder in relation to the aggregate liquidation
amount of all Securities outstanding unless, in relation to a payment, an Event
of Default under the Declaration has occurred and is continuing, in which case
any funds available to make such payment shall be paid first to each Holder of
the Preferred Securities pro rata according to the aggregate liquidation amount
of Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred Securities, to
each Holder of Common Securities pro rata according to the aggregate
liquidation amount of Common Securities held by the relevant Holder relative to
the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking.
--------
The Preferred Securities rank PARI PASSU and payment thereon
shall be made Pro Rata with the Common Securities except that, where an Event
of Default occurs and is continuing under the Indenture in respect of the
Debentures held by the Institutional Trustee, the rights of Holders of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights to payment
of the Holders of the Preferred Securities.
10. Listing.
--------
The Regular Trustees shall use their best efforts to cause the
Preferred Securities to be listed for quotation on the New York Stock Exchange,
Inc.
11. Acceptance of Securities Guarantee and Indenture.
-------------------------------------------------
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred Securities
Guarantee and the Common Securities Guarantee, respectively, including the
subordination provisions therein and to the provisions of the Indenture.
12. No Preemptive Rights.
---------------------
The Holders of the Securities shall have no preemptive rights
to subscribe for any additional securities.
I-13
<PAGE> 74
13. Miscellaneous.
--------------
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred Securities Guarantee or the Common Securities Guarantee (as may be
appropriate), and the Indenture to a Holder without charge on written request
to the Sponsor at its principal place of business.
I-14
<PAGE> 75
EXHIBIT A-1
FORM OF PREFERRED SECURITY CERTIFICATE
[IF THE PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE
INSERT - This Preferred Security is a Global Certificate within the meaning of
the Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company (the "Depositary") or a nominee of the Depositary.
This Preferred Security is exchangeable for Preferred Securities registered in
the name of a person other than the Depositary or its nominee only in the
limited circumstances described in the Declaration and no transfer of this
Preferred Security (other than a transfer of this Preferred Security as a whole
by the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may be
registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New York, New
York) to the Trust or its agent for registration of transfer, exchange or
payment, and any Preferred Security issued is registered in the name of Cede &
Co. or such other name as requested by an authorized representative of The
Depository Trust Company and any payment hereon is made to Cede & Co., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
Certificate Number Number of Preferred Securities
CUSIP NO. [ ]
Certificate Evidencing Preferred Securities
of
TEXTRON CAPITAL I
____% Trust Originated Preferred Securities[SM] ("TOPrS"[SM])
(liquidation amount $25 per Preferred Security)
TEXTRON CAPITAL I, 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 _____% Trust Originated Preferred Securities[SM]
(liquidation
A1-1
<PAGE> 76
amount $25 per Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in person or
by a duly authorized attorney, upon surrender of this certificate duly endorsed
and in proper form for transfer. 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 _______, 1996, 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.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States
federal income tax purposes, the Debentures as indebtedness and the Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this certificate
this ___ day of ____________, 199__.
THE CHASE MANHATTAN BANK (USA),
as Trustee
By:
-------------------------------
Name: John W. Mack
Title: Second Vice President
-----------------------------------
Richard A. Watson
-----------------------------------
Gregory E. Hudson
A1-2
<PAGE> 77
______________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
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 Preferred 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 Preferred Security
Certificate)
A1-3
<PAGE> 78
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
TEXTRON CAPITAL I
______% Trust Originated Common Securities
(liquidation amount $25 per Common Security)
TEXTRON CAPITAL I, 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 ______% Trust Originated Common Securities (liquidation
amount $25 per 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 _______, 1996, 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.
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.
A2-1
<PAGE> 79
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ____________, 199__.
THE CHASE MANHATTAN BANK (USA),
as Trustee
By:
-------------------------------
Name: John W. Mack
Title: Second Vice President
-----------------------------------
Richard A. Watson
-----------------------------------
Gregory E. Hudson
A2-2
<PAGE> 80
______________________
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)
A2-3
<PAGE> 81
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE> 82
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE> 1
Exhibit 4(m)
TEXTRON INC.
TO
THE CHASE MANHATTAN BANK, N.A.
Trustee
_______________
INDENTURE
Dated as of January __, 1996
_______________
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
RECITALS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Board Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Company Order . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Corporate Trust Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Depositary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Floating or Adjustable Rate Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Floating or Adjustable Rate Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Global Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Institutional Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Interest Payment Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Limited Partnership Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Original Issue Discount Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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Outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Partnership Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Predecessor Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Regular Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Responsible Officer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Register . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Security Registrar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Special Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Stated Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Textron Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Textron Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Common Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Trust Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Vice President . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.2. Compliance Certificates and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 1.3. Form of Documents Delivered to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.4. Acts of Holders; Record Dates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 1.5. Notices, Etc., to Trustee and Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.6. Notice to Holders; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 1.7. Conflict with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.8. Effect of Headings and Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.9. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.10. Separability Clause . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.11. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.12. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 1.13. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.2. Form of Face of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 2.3. Form of Reverse of Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.4. Form of Trustee's Certificate of Authentication. . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.2. Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.3. Execution, Authentication, Delivery and Dating. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 3.4. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 3.5. Registration, Registration of Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 3.6. Mutilated, Destroyed, Lost and Stolen Securities . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 3.7. Payment of Interest; Interest Rights Preserved . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 3.8. Persons Deemed Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.9. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.10. Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 3.11 Global Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.1. Satisfaction and Discharge of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 4.2. Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.3. Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 4.4. Conditions to Defeasance or Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.5. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 4.6. Indemnity for U.S. Government Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment . . . . . . . . . . . . . . . . . . . . . . . . 33
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SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee . . . . . . . . . . . . . . . . . . 35
SECTION 5.4. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities . . . . . . . . . . . . . . . . . . . . 36
SECTION 5.6. Application of Money Collected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.7. Limitation on Suits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium and Interest. . . . . . . . . . . . . 38
SECTION 5.9. Restoration of Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.10. Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.11. Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 5.12. Control by Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.13. Waiver of Past Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 5.14. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
SECTION 6.2. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 6.3. Certain Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.5. May Hold Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.6. Money Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.7. Compensation and Reimbursement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 6.8. Disqualification; Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 6.9. Corporate Trustee Required; Eligibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.10. Resignation and Removal; Appointment of Successor . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 6.11. Acceptance of Appointment by Successor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.13. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 6.14. Appointment of Authenticating Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders . . . . . . . . . . . . . . . . . . . . . 57
SECTION 7.2. Preservation of Information; Communications to Holders . . . . . . . . . . . . . . . . . . . . . . 58
SECTION 7.3. Reports by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 7.4. Reports by Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
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ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 8.2. Successor Corporation Substituted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 9.2. Supplemental Indentures With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 63
SECTION 9.3. Execution of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 9.4. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 9.5. Conformity with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 9.6. Reference in Securities to Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . 65
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.2. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 10.3. Money for Securities Payments to Be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 10.4. Statement by Officers as to Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.5. Covenants as to Textron Trusts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 10.6. Covenants As To Textron Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.2. Election to Redeem; Notice to Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 11.4. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.5. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 11.6. Securities Payable on Redemption Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 11.7. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
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ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 12.3. Redemption of Securities for Sinking Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement to Subordinate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 13.2. Payment on Dissolution, Liquidation or Reorganization; Default on Senior Indebtedness . . . . . . . 73
SECTION 13.3. Payment Prior to Dissolution or Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.4. Rights of Holders of Senior Indebtedness not Impaired . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 13.5. Authorization of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Securities in a Foreign Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 14.2. Judgment Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 14.3. Acknowledgement of Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 14.4. Special Representative of Textron Partnership . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939 AND
INDENTURE, DATED AS OF JANUARY __, 1996
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TRUST INDENTURE
ACT SECTION INDENTURE SECTION
Section 310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 608
610
Section 311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 613(b)
(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)(2)
703(b)
Section 312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(a), 703(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 703(c)
Section 314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602
703(a)(6)
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(a)(1)
(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(2)
(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 514
Section 316(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
<FN>
__________
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
</TABLE>
vii
<PAGE> 9
INDENTURE, dated as of January __, 1996, between TEXTRON Inc., a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), having its principal office at 40 Westminster
Street, Providence, Rhode Island 02903, and THE CHASE MANHATTAN BANK, N.A., a
national banking association duly organized and existing under the laws of the
United States of America, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness (herein
called the "Securities"), to be issued in one or more series as in this
Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities or of
series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) all other terms used herein which are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) all accounting terms not otherwise defined herein have
the meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting
<PAGE> 10
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified
in Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
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," when used with respect to any Place of Payment, means
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment are authorized or obligated
by law to close.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934,
or, if at any time after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Company" means the Person named as the "Company' in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman or Vice Chairman of the
Board, its President or a Vice
2
<PAGE> 11
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
the City of New York, New York at which at any particular time its corporate
trust business shall be principally administered, which at the date hereof is
located at 4 Chase MetroTech Center, Brooklyn, New York 11245.
"Corporation" includes corporations, associations, companies and
business trusts.
"Covenant Defeasance" has the meaning specified in Section 4.3.
"Declaration" means, with respect to a Textron Trust, the amended and
restated declaration of trust or any other governing instrument of such Textron
Trust.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasance" has the meaning specified in Section 4.2.
"Depositary" means, with respect to Securities of any series issuable
in whole or in part in the form of one or more Global Securities, a clearing
agency registered under the Exchange Act that is designated to act as
Depositary for such Securities as contemplated by Section 3.1.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor legislation.
"Floating or Adjustable Rate Provision" means a formula or provision,
specified in a Board Resolution or an indenture supplemental hereto, providing
for the determination. whether pursuant to objective factors or pursuant to the
sole discretion of any Person (including the Company), and periodic adjustment
of the interest rate per annum borne by a Floating or Adjustable Rate Security.
"Floating or Adjustable Rate Security" means any Security which
provides for interest to be payable thereon at a rate per annum that may vary
from time to time over the term thereof in accordance with a Floating or
Adjustable Rate Provision.
"General Partner" means Textron Inc. in its capacity as general
partner of Textron Partnership.
"Global Security" means a Security that evidences all or part of the
Securities of any series and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
3
<PAGE> 12
"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
and shall include the terms of particular series of Securities established as
contemplated by Section 3.1.
"Institutional Trustee" has the meaning set forth in the Declaration
of the applicable Textron Trust.
"Interest Payment Date," when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Limited Partnership Agreement" means the Amended and Restated Limited
Partnership Agreement of Textron Finance, L.P., dated ______________, 1995.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman or
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.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Original Issue Discount Security" means any Security which provides
for an amount less than the principal amount thereof to be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its
own Paying Agent) for the Holders of such Securities; provided that,
if such Securities are to be redeemed, notice of such redemption has
been duly given
4
<PAGE> 13
pursuant to this Indenture or provision therefor satisfactory to the
Trustee has been made; and
(iii) Securities which have been paid pursuant to Section
3.6 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;
provided that in determining whether the Holders of the requisite principal
amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying, upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or of such
other obligor. In determining whether the Holders of the requisite principal
amount of Outstanding Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding for such
purposes shall be the portion of the principal amount thereof that would be due
and payable as of the date of such determination upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Partnership Preferred Securities" means any series of preferred
securities issued by Textron Partnership pursuant to the Limited Partnership
Agreement.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (or premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated organization
or government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any
series, means the place or places where the principal of (and premium, if any)
and interest on the Securities of that series are payable as specified as
contemplated by Section 3.1.
"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 3.6
5
<PAGE> 14
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.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date on the Securities of any series means the date specified for that purpose
as contemplated by Section 3.1.
"Responsible Officer" means, with respect to the Trustee, any officer
within the Corporate Trust Office of the Trustee, including any vice-president,
any assistant vice-president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust Office of the
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Securities authenticated and
delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor; (ii) all
capital lease obligations of such obligor; (iii) all obligations of such
obligor issued or assumed as the deferred purchase price of property, all
conditional sale obligations of such obligor and all obligations of such
obligor under any title retention agreement (but excluding trade accounts
payable arising in the ordinary course of business); (iv) all obligations of
such obligor for the reimbursement on any letter of credit, banker's
acceptance, security purchase facility or similar credit transaction; (v) all
obligations of the type referred to in clauses (i) through (iv) of other
Persons for the payment of which such obligor is responsible or liable as
obligor, guarantor or otherwise; and (vi) all obligations of the type referred
to in clauses (i) through (v) of other Persons secured by any lien on any
property or asset of such obligor (whether or not such obligation is assumed by
such obligor), except for (1) any such indebtedness that is by its terms
subordinated to or pari passu with the Securities, and (2) any indebtedness
between or among such obligor and its Affiliates, including all other debt
securities and guarantees in respect of those debt securities, issued to (x)
any Textron Trust, (y) Textron Partnership or (z) any other trust, or a trustee
of such trust, partnership or other entity affiliated with the Company which is
a financing vehicle of the Company (a "Financing Entity") in
6
<PAGE> 15
connection with the issuance by such Financial Entity of preferred securities
or other securities which rank pari passu with, or junior to, the Trust
Preferred Securities or the Partnership Preferred Securities.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.7.
"Special Representative" has the meaning set forth in the Limited
Partnership Agreement.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by
one or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Textron Partnership" means Textron Finance, L.P., a Delaware limited
partnership.
"Textron Trust" means each of Textron Capital I, Textron Capital II,
and Textron Capital III, each a Delaware statutory business trust or any other
similar trust created for the purpose of issuing preferred securities in
connection with the issuances of Securities under this Indenture.
"Trust Common Securities" means undivided beneficial interests in the
assets of a Textron Trust which rank pari passu with Trust Preferred Securities
issued by such Textron Trust; PROVIDED, HOWEVER, that upon the occurrence of an
Event of Default, the rights of holders of Trust Common Securities to payment
in respect to distributions and payments upon liquidation, redemption and
otherwise are subordinated to the rights of holders of Trust Preferred
Securities.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed, except as provided
in Section 9.5.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person, "Trustee" as used with
respect to the Securities of any series shall mean the Trustee with respect to
Securities of that series.
7
<PAGE> 16
"Trust Preferred Securities" means undivided beneficial interests in
the assets of a Textron Trust which rank pari passu with Trust Common
Securities issued by such Textron Trust; PROVIDED, HOWEVER, that upon the
occurrence of an Event of Default, the rights of holders of Trust Common
Securities to payment in respect of distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of holders
of Trust Preferred Securities.
"Trust Securities" means Trust Common Securities and Trust Preferred
Securities.
"U.S. Government Obligations" has the meaning specified in Section 4.4.
"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."
SECTION 1.2. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate
or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include,
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
8
<PAGE> 17
SECTION 1.3. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.4. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders shall 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 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 6.1) 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
9
<PAGE> 18
of the execution of any such instrument or writing, or the authority of the
Person executing the same, may also be proved in any other manner which the
Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 1.5. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Attention: Institutional Trust Group; provided, however, that no such
instrument will not be considered properly given if submitted in an
electronic format, i.e., by E-Mail or otherwise, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage
prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
SECTION 1.6. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
10
<PAGE> 19
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 1.7. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Indenture by any of
the provisions of the Trust Indenture Act, such required provision shall
control.
SECTION 1.8. 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 1.9. 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 Indebtedness and the Holders, any benefit or
any legal or equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York.
SECTION 1.13. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day at any Place of Payment,
then (notwithstanding any other provision of this Indenture or of the
Securities) payment of interest or principal (and premium,
11
<PAGE> 20
if any) need not be made at such Place of Payment on such date, but may be made
on the next succeeding Business Day at such Place of Payment with the same
force and effect as if made on the Interest Payment Date or Redemption Date, or
at the Stated Maturity, provided that no interest shall accrue 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 2.1. Forms Generally.
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture, and may
have such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or Depositary therefor or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of such Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in this Article.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 2.2. Form of Face of Security.
[If the Security is an Original Issue Discount Security, insert -FOR
PURPOSES OF SECTIONS 1271 THROUGH 1275 OF THE UNITED STATES INTERNAL REVENUE
CODE OF 1954, AS AMENDED, THE ISSUE PRICE OF THIS SECURITY IS ..% OF ITS
PRINCIPAL AMOUNT AND THE ISSUE DATE IS ..... 19.. or corresponding legend
appropriate at the time of issuance]
TEXTRON INC.
[insert-title of series of Security]
12
<PAGE> 21
No........... $..........
TEXTRON INC., a corporation duly organized and existing under the laws
of the State of Delaware (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to
................................................ or registered assigns, the
principal sum of .............................. Dollars on
.............................. and to pay interest thereon from .... or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semi-annually on ....... and .... in each year, commencing
........., at [If the Security is to bear interest at a fixed rate, insert -the
rate of ..% per annum, ] [If the Security is a Floating or Adjustable Rate
Security, insert -a rate per annum [computed-determined] in accordance with the
[insert defined name of Floating or Adjustable Rate Provision] set forth below]
until the principal hereof is paid or made available for payment [If
applicable, insert -, and (to the extent that the payment of such interest
shall be legally enforceable) at a rate of ...% per annum on any overdue
principal and premium and on any overdue installment of interest]. The
interest so payable, and punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such 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, which
shall be the ....... or ....... (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date. Any such interest not so
punctually paid or duly provided for will 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 of this series not less than 10 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 of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
[At this point in the Security Form of any series of Floating or
Adjustable Rate Securities, the text of the Floating or Adjustable Rate
Provision relating thereto should be inserted.]
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for
that purpose, in .........., in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert - ; provided that at the option of the
Company payment of interest may be made by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security Register].
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
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<PAGE> 22
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this
Security shall not be entitled to any benefit under the Indenture or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
TEXTRON INC.
By......................................
Attest:
.........................................
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or
more series under an Indenture, dated as of January __, 1996 (herein called the
"Indenture"), between the Company and The Chase Manhattan Bank, N.A., 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 Company, the
Trustee and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof [,limited in aggregate
principal amount to $..........].
[If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
[if applicable, insert - (1) on .......... in any year commencing with the year
.... and ending with the year .... through operation of the sinking fund for
this series at a Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after .........., 19..], as a whole or in part, at the
election of the Company, at the following Redemption Prices (expressed as
percentages of the principal amount): If redeemed [on or before ..........,
...%, and if redeemed] during the 12-month period beginning .......... of the
years indicated,
Redemption Redemption
Year Price Year Price
- ---- ---------- ---- ----------
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<PAGE> 23
and thereafter at a Redemption Price equal to ....% of the principal amount,
together in the case of any such redemption [if applicable, insert - (whether
through operation of the sinking fund or otherwise)] with accrued interest to
the Redemption Date, but interest installments whose Stated Maturity is on or
prior to such Redemption Date will be payable to the Holders of such
Securities, or one or more Predecessor Securities, of record at the close of
business on the relevant Record Dates referred to on the face hereof, all as
provided in the Indenture.]
[If applicable, insert - The Securities of this series are subject to
redemption upon not less than 30 days' nor more than 60 days' notice by mail,
(1) on .......... in any year commencing with the year .... and ending with the
year .... through operation of the sinking fund for this series at the
Redemption Prices for redemption through operation of the sinking fund
(expressed as percentages of the principal amount) set forth in the table
below: If redeemed during the 12-month period beginning .......... of the
years indicated,
<TABLE>
<CAPTION>
Redemption Price
For Redemption Redemption Price For
Through Operation Redemption Otherwise
of the Than Through Operation
Year Sinking Fund of the Sinking Fund
- ---- -------------------- ---------------------------
<S> <C> <C>
</TABLE>
and thereafter at a Redemption Price equal to ....% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.]
[Notwithstanding the foregoing, the Company may not, prior to
.........., redeem any Securities of this series as contemplated by [Clause (2)
of] the preceding paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of
15
<PAGE> 24
moneys borrowed having an interest cost to the Company (calculated in
accordance with generally accepted financial practice) of less than....% per
annum.]
[The sinking fund for this series provides for the redemption on
.......... in each year beginning with the year .... and ending with the year
.... of [not less than] $.......... [("mandatory sinking fund") and not more
than $..........] aggregate principal amount of Securities of this series.
[Securities of this series acquired or redeemed by the Company otherwise than
through [mandatory] sinking fund payments may be credited against subsequent
[mandatory] sinking fund payments otherwise required to be made -- in the
[inverse] order in which they become due.]
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
The indebtedness evidenced by the Securities is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness (as defined in
the Indenture) of the Company, whether outstanding at the date of the Indenture
or thereafter incurred. Each Holder of this Security, whether upon original
issue or upon transfer or assignment, by his acceptance hereof, agrees to and
shall be bound by all the provisions of the Indenture relating to such
subordination and authorizes the Trustee on his behalf to take such action as
may be necessary or appropriate to effectuate, as between the holders of Senior
Indebtedness and the Holders of Securities, such subordination, and appoints
the Trustee its attorney-in-fact for any and all such purposes. Each Holder of
this Security, whether upon original issue or upon transfer or assignment, by
his acceptance hereof, also agrees that each holder of Senior Indebtedness
whether now outstanding or hereafter incurred, shall be deemed to have
purchased Senior Indebtedness in reliance upon the covenants and provisions
contained herein and in the Indenture.
[If the Security is not an Original Issue Discount Security, - If an
Event of Default with respect to Securities of this series shall occur and be
continuing, the principal amount of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.]
[If the Security is an Original Issue Discount Security, - If an
Event of Default with respect to Securities of this series shall occur and be
continuing, an amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Such amount shall be equal to - insert formula for determining the
amount. Upon payment (i) of the amount of principal so declared due and
payable and (ii) of interest on any overdue principal, premium and interest (in
each case to the extent that the payment of such interest shall be legally
enforceable), all of the Company's obligations in respect of the payment of the
principal of and interest on the Securities of this series shall terminate.]
16
<PAGE> 25
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with
the consent of the Holders of a majority in principal amount of the Securities
at the time Outstanding of each series to be affected. The Indenture also
contains provisions permitting the Holders of a majority in principal amount of
the Securities of each series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any)
and interest on this Security at the times, place and [rate-rates], and in the
coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest on this Security are payable, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities
of this series, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $....... and any integral multiple thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
17
<PAGE> 26
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
SECTION 2.4. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated herein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A.,
As Trustee
By . . . . . . . . . . . . . . . . . . . . . . .
Authorized Officer
ARTICLE III
THE SECURITIES
SECTION 3.1. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto,
prior to the issuance of Securities of any series,
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all Securities of any
other series);
(2) the coin or currency in which the Securities of that
series are denominated and any limit upon the aggregate principal
amount of the Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or
in lieu of, other Securities of the series pursuant to Section 3.4,
3.5, 3.6, 9.6 or 11.7);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the series
shall bear interest or the Floating or Adjustable Rate Provision
pursuant to which such rates shall be
18
<PAGE> 27
determined, the date or dates from which any such interest shall
accrue, the Interest Payment Dates on which any such interest shall be
payable and the Regular Record Date for the interest payable on any
Interest Payment Date;
(5) the place or places where the principal of (and any
premium, if any) and interest on Securities of the series shall be
payable;
(6) the period or periods within which, the price or prices
at which and the terms and conditions upon which any Securities of the
series may be redeemed, in whole or in part, at the option of the
Company;
(7) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions or at the option of the Holder thereof and the
period or periods within which, the price or prices at which and the
terms and conditions upon which Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the series
shall be issuable;
(9) any other event or events of default applicable with
respect to the Securities of the series in addition to those provided
in Section 5.1 (1) through (6);
(10) any other covenant or warranty included for the benefit
of Securities of the series in addition to (and not inconsistent with)
those included in this Indenture for the benefit of Securities of all
series, or any other covenant or warranty included for the benefit of
Securities of the series in lieu of any covenant or warranty included
in this Indenture for the benefit of Securities of all series, or any
provision that any covenant or warranty included in this Indenture for
the benefit of Securities of all series shall not be for the benefit
of Securities of the series, or any combination of such covenants,
warranties or provisions;
(11) if other than the principal amount thereof, the
portion of the principal amount of Securities of the series which
shall be payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.2;
(12) if other than the coin or currency in which the
Securities of that series are denominated, the coin or currency in
which payment of principal of, premium, if any, and/or interest on the
Securities of such series shall be payable;
(13) whether the Securities of the series will be issuable
as Global Securities;
(14) if the Securities of such series are to be issuable in
definitive form (whether upon original issue or upon exchange of a
temporary Security of such series)
19
<PAGE> 28
only upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such
certificates, documents or conditions;
(15) the rights, if any, to defer payments of interest on
the Securities by extending the interest payment periods and the
duration such extension;
(16) the subordination terms of the Securities of the
series; and
(17) any other terms of the series (which terms shall not
be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or
pursuant to such Board Resolution and set forth, or determined in the manner
provided, in the Officers' Certificate referred to above or in any such
indenture supplemental hereto.
If any of the terms of the Securities of a series are established by
action taken pursuant to a Board Resolution, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of
the Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the Securities of such series.
SECTION 3.2. Denominations.
The Securities of each series shall be issuable in registered form
without coupons and in such denominations as shall be specified as contemplated
by Section 3.1. In the absence of any such provisions with respect to the
Securities of any series, the Securities of such series shall be issuable in
denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman or Vice Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order
for the authentication and delivery
20
<PAGE> 29
of such Securities, and the Trustee in accordance with the Company Order shall
authenticate and deliver such Securities. If the form or terms of the
Securities of the series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive at the
time of the initial delivery by the Company of Securities of such series to the
Trustee for authentication, and (subject to Section 6.1) shall be fully
protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by
or pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been established
by or pursuant to Board Resolution as permitted by Section 3.1, that
such terms have been established in conformity with the provisions of
this Indenture; and
(c) that such Securities, when authenticated and delivered
by the Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
reorganization, and other laws of general applicability relating to or
affecting the enforcement or creditors' rights and to general equity
principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder and is entitled to
the benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon receipt of a Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other
21
<PAGE> 30
variations as the directors or officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company in a Place of Payment for
Securities of that series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like aggregate principal amount of definitive Securities of the same
series and of like tenor of authorized denominations. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities of such series.
SECTION 3.5. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Securities
and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any
series at the office or agency of the Company in a Place of Payment for
Securities of that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of like tenor of the same series, of
any authorized denominations and of a like aggregate principal amount.
At the option of the Holder, Securities of any series may be exchanged
for other Securities of like tenor of the same series, of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Securities to be exchanged at such office or agency. Whenever any Securities
are so surrendered for exchange, the Company shall execute, and the Trustee
shall authenticate and deliver, the Securities which the Holder making the
exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
22
<PAGE> 31
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 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer
of or exchange any Security of any series during a period beginning at the
opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of such series selected for redemption under Section
11.03 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 3.6. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same series and of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security has been acquired by a
bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or
stolen Security, a new Security of the same series and of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the
23
<PAGE> 32
Company, whether or not the destroyed, lost or stolen Security shall be at any
time enforceable by anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other Securities of that
series duly issued hereunder.
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 3.7. 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 for such interest.
Interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Securities of such
series at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record
Date therefor having been so mailed, such Defaulted Interest shall be
paid to the Persons in whose names the Securities of such series (or
their respective
24
<PAGE> 33
Predecessor Securities) are registered at the close of business on
such Special Record Date and shall no longer be payable pursuant to
the following clause (2).
(2) The Company may make payment of any Defaulted Interest
on the Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange on which
such Securities may be listed, and upon such notice as may be required
by such exchange, if, after written notice given by the Company to the
Trustee of the proposed payment pursuant to this Clause, such manner
of payment shall be deemed practicable by the Trustee in its sole
discretion.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.8. 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
premium, if any) and (subject to Section 3.7) interest on such Security and for
all other purposes whatsoever, whether or not such Security be overdue, and
neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.9. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for
any Securities cancelled as provided in this Section, except as expressly
permitted by this Indenture. Unless otherwise directed by a Company Order,
delivery of which must be delivered in a timely manner to prevent such
destruction, all cancelled Securities held by the Trustee shall be destroyed by
it, and the Trustee shall deliver a certificate of such destruction to the
Company.
SECTION 3.10. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a year of twelve 30-day months.
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<PAGE> 34
SECTION 3.11 Global Securities.
If the Company shall establish pursuant to Section 3.1 that the
Securities of a series are to be issued in the form of one or more Global
Securities, then the Company shall execute and the Trustee shall, in accordance
with Section 3.3 and the Company Order with respect to such series,
authenticate and deliver one or more Global Securities that (i) shall represent
and shall be denominated in an amount equal to the aggregate principal amount
of all of the Securities of such series to be issued in the form of Global
Securities and not yet cancelled, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee of such
Depositary, and (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions.
Global Securities shall bear a legend substantially to the following
effect:
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Global 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 such limited circumstances. Every Security delivered upon
registration of transfer of, or in exchange for, or in lieu of, this
Global Security shall be a Global Security subject to the foregoing,
except in the limited circumstances described above.
Unless this certificate is presented by an authorized
representative of The Depositary Trust Company, a New York corporation
("DTC"), 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 in such other name as is requested by an
authorized representative of DTC (and any payment is to be 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.
Notwithstanding the provisions of Section 3.5, unless and until it is
exchanged in whole or in part for Securities in definitive registered form, a
Global Security representing all or a part of the Securities of a series may
not be transferred in the manner provided in Section 3.5 except as a whole by
the Depositary for such series to a nominee of such Depositary or by a nominee
of such Depositary to such Depositary or another nominee of such Depositary or
by such Depositary or any such nominee to a successor Depositary for such
series or a nominee of such successor Depositary.
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If at any time the Depositary for any Securities of a series
represented by one or more Global Securities notifies the Company that it is
unwilling or unable to continue as Depositary for such Securities or if at any
time the Depositary for such Securities shall no longer be eligible under this
Section 3.11, the Company shall appoint a successor Depositary with respect to
such Securities. If a successor Depositary for such Securities is not
appointed by the Company within 90 days after the Company receives such notice
or becomes aware of such ineligibility, the Company's election pursuant to
Section 3.1 that such Securities be represented by one or more Global
Securities shall no longer be effective and the Company shall execute, and the
Trustee, upon receipt of a Company Order for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver Securities
of such series in definitive registered form, in any authorized denominations,
in an aggregate principal amount equal to the principal amount of the Global
Security or Securities representing such Securities in exchange for such Global
Security or Securities.
The Company may at any time and in its sole discretion determine that
the Securities of any series issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Securities.
In such event the Company shall execute, and the Trustee, upon receipt of a
Company Order or an Officers' Certificate for the authentication and delivery
of definitive Securities of such series, shall authenticate and deliver,
Securities of such series in definitive registered form, in any authorized
denominations, in an aggregate principal amount equal to the principal amount
of the Global Security or Securities representing such Securities, in exchange
for such Global Security or Securities.
If specified by the Company pursuant to Section 3.1 with respect to
Securities represented by a Global Security, the Depositary for such Global
Security may surrender such Global Security in exchange in whole or in part for
Securities of the same series in definitive registered form on such terms as
are acceptable to the Company and such Depositary. Thereupon, the Company
shall execute, and the Trustee shall authenticate and deliver, without service
charge,
(i) to the Person specified by such Depositary, a new
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate principal
amount equal to and in exchange for such Person's beneficial interest
in the Global Security; and
(ii) to such Depositary a new Global Security in a
denomination equal to the difference, if any, between the principal
amount of the surrendered Global Security and the aggregate principal
amount of Securities authenticated and delivered pursuant to clause
(i) above.
Upon the exchange of a Global Security for Securities in definitive
registered form in authorized denominations, such Global Security shall be
cancelled by the Trustee or an agent of the Company or the Trustee. Securities
in definitive registered form issued in exchange for a Global Security pursuant
to this Section 3.11 shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions
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from its direct or indirect participants or otherwise, shall instruct the
Trustee or an agent of the Company or the Trustee. The Trustee or such agent
shall deliver at its office such Securities to or as directed by the Persons in
whose names such Securities are so registered.
ARTICLE IV
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.6 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 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount sufficient to
pay and discharge the entire indebtedness on such Securities
not theretofore delivered to the Trustee for cancellation,
for principal (and premium, if any) and interest to the date
of such deposit (in the case of Securities which have become
due and payable) or to the Stated Maturity or Redemption
Date, as the case may be;
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(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 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14, 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 4.2 and the last
paragraph of Section 10.3 shall survive.
SECTION 4.2. Defeasance and Discharge.
The following provisions shall apply to the Securities of each series
unless specifically otherwise provided in a Board Resolution, Officers'
Certificate or indenture supplemental hereto provided pursuant to Section 3.1.
In addition to discharge of this Indenture pursuant to Sections 4.1 and 4.3, in
the case of any series of Securities with respect to which the exact amount
described in subparagraph (a) of Section 4.4 can be determined at the time of
making the deposit referred to in such subparagraph (a), the Company shall be
deemed to have paid and discharged the entire indebtedness on all the
Securities of such a series as provided in this Section on and after the date
the conditions set forth in Section 4.4 are satisfied, and the provisions of
this Indenture with respect to the Securities of such series shall no longer be
in effect (except as to (i) rights of registration of transfer and exchange of
Securities of such series, (ii) substitution of mutilated, defaced, destroyed,
lost or stolen Securities of such series, (iii) rights of Holders of Securities
of such series to receive, solely from the trust fund described in subparagraph
(a) of Section 4.4, payments of principal thereof and interest, if any, thereon
upon the original stated due dates therefor (but not upon acceleration), and
remaining rights of the Holders of Securities of such series to receive
mandatory sinking fund payments, if any, (iv) the rights, obligations, duties
and immunities of the Trustee hereunder, (v) this Section 4.2 and (vi) the
rights of the Holders of Securities of such series as beneficiaries hereof with
respect to the property so deposited with the Trustee payable to all or any of
them) (hereinafter called "Defeasance"), and the Trustee at the cost and
expense of the Company, shall execute proper instruments acknowledging the
same.
SECTION 4.3. Covenant Defeasance.
In the case of any series of Securities with respect to which the
exact amount described in subparagraph (a) of Section 4.4 can be determined at
the time of making the deposit referred to in such subparagraph (a), (i) the
Company shall be released from its obligations under any covenants specified in
or pursuant to this Indenture (except as to (i) rights of registration of
transfer and exchange of Securities of such series, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities of such series, (iii)
rights of Holders of Securities of such
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series to receive, from the Company pursuant to Section 10.1, payments of
principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the Holders
of Securities of such series to receive mandatory sinking fund payments, if
any, (iv) the rights, obligations, duties and immunities of the Trustee
hereunder and (v) the rights of the Holders of Securities of such series as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them), and (ii) the occurrence of any event specified
in Sections 5.1(4) (with respect to any of the covenants specified in or
pursuant to this Indenture) and 5.1(9) shall be deemed not to be or result in
an Event of Default, in each case with respect to the Outstanding Securities of
such series as provided in this Section on and after the date the conditions
set forth in Section 4.4 are satisfied (hereinafter called "Covenant
Defeasance"), and the Trustee, at the cost and expense of the Company, shall
execute proper instruments acknowledging the same. For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant (to the extent so specified in the case of Section 5.1(4)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document, but the remainder of this
Indenture and the Securities of such series shall be unaffected thereby.
SECTION 4.4. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
4.2 or 4.3 to the Outstanding Securities:
(a) with reference to Section 4.2 or 4.3, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities of such
series (i) cash in an amount, or (ii) direct obligations of the United
States of America, backed by its full faith and credit ("U.S.
Government Obligations"), maturing as to principal and interest, if
any, at such times and in such amounts as will insure the availability
of cash, or (iii) a combination thereof, in each case sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge (A) the principal of and interest,
if any, on all Securities of such series on each date that such
principal or interest, if any, is due and payable, and (B) any
mandatory sinking fund payments on the dates on which such payments
are due and payable in accordance with the terms of this Indenture and
the Securities of such series;
(b) in the case of Defeasance under Section 4.2, the
Company has delivered to the Trustee an Opinion of Counsel based on
the fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y), since the
date hereof, there has been a change in the applicable United States
federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders of the Securities of such
series will not recognize income, gain or loss for federal income tax
purposes as a result of such deposit, Defeasance and discharge and
will be subject to federal income
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tax on the same amount and in the same manner and at the same times,
as would have been the case if such deposit, Defeasance and discharge
had not occurred;
(c) in the case of Covenant Defeasance under Section 4.3,
the Company has delivered to the Trustee an Opinion of Counsel to the
effect that, and such opinion shall confirm that, the Holders of the
Securities of such series will not recognize income, gain or loss for
federal income tax purposes as a result of such deposit and Covenant
Defeasance and will be subject to federal income tax on the same
amount and in the same manner and at the same times, as would have
been the case if such deposit and Covenant Defeasance had not
occurred;
(d) such Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
agreement or instrument to which the Company is a party or by which it
is bound; and
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied
with.
SECTION 4.5. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money and U.S. Government Obligations deposited with the Trustee pursuant to
Section 4.4 shall be held in trust, and such money and all money from such U.S.
Government Obligations shall be 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 premium, if any) and interest for whose payment such money
and U.S. Government Obligations has been deposited with the Trustee.
SECTION 4.6. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.4 or the principal or interest received in
respect of such obligations other than any such tax, fee or other charge that
by law is for the account of the Holders of Outstanding Securities.
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ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default," wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason
for such Event of Default and whether it shall be occasioned by the
provisions of Article Thirteen 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 interest upon any Security of
that series when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(2) default in the payment of the principal of (or premium,
if any, on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment,
when and as due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant
or warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere
in this Section specifically dealt with or which has expressly been
included in this Indenture solely for the benefit of Securities of any
series other than that series), and continuance of such default or
breach for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal
amount of the Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder; or
(5) the entry by a court having jurisdiction in the
premises of (A) a decree or order for relief in respect of the
Company in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other
similar law or (B) a decree or order adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or
order for relief or any such other decree or order unstayed and in
effect for a period of 90 consecutive days; or
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(6) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the
consent by it to the entry of a decree or order for relief in respect
of the Company in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay
its debts generally as they become due, or the taking of corporate
action by the Company in furtherance of any such action; or
(7) in the event Securities of a series are issued and
sold to a Textron Trust or a trustee of such trust in connection with
the issuance of Trust Securities by such Textron Trust, such Textron
Trust shall have voluntarily or involuntarily dissolved, wound-up its
business or otherwise terminated its existence except in connection
with (i) the distribution of Securities to holders of Trust Securities
in liquidation or redemption of their interests in such Textron Trust
upon a Special Event, (ii) the redemption of all of the outstanding
Trust Securities of such Textron Trust or (iii) certain mergers,
consolidations or amalgamations, each as permitted by the Declaration
of such Textron Trust; or
(8) in the event Securities of a series are issued and
sold to Textron Partnership in connection with the issuance of
Partnership Preferred Securities by Textron Partnership, Textron
Partnership shall have voluntarily or involuntarily dissolved,
wound-up its business or otherwise terminated its existence except in
connection with (i) the distribution of Securities to holders of
Partnership Preferred Securities in liquidation or redemption their
interests in the Textron Partnership, (ii) the redemption of all of
the outstanding Partnership Preferred Securities of Textron
Partnership or (iii) certain mergers, consolidations or amalgamations,
each as permitted by the Limited Partnership Agreement; or
(9) any other Event of Default provided with respect to
Securities of that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the
time Outstanding occurs and is continuing, then in every such case the Trustee,
if the Trustee has actual knowledge thereof, or the Holders of not less than
25% in principal amount of the Outstanding Securities of that series (or, if
any Securities of that series are Original Issue Discount Securities, such
portion of the principal amount as may be specified by the terms of the
Securities of that
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series) may, but shall not be obligated to, declare the principal amount of
all of the Securities of that series to be due and payable immediately, by a
notice in writing to the Company (and to the Trustee if given by Holders), and
upon any such declaration such principal amount (or specified amount) shall
become immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due otherwise
than by such declaration of acceleration and interest
thereon at the rate or rates prescribed therefor in such
Securities,
(C) all overdue sinking fund payments with respect
to Securities of that series and interest thereon at the
rate or rates prescribed therefor in such Securities,
(D) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate or rates
prescribed therefor in such Securities, and
(E) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel (including reasonable legal fees and expenses);
and
(2) all Events of Default with respect to Securities of
that series, other than the non-payment of the principal of Securities
of that series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
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SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or
premium, if any, on) any Security at the Maturity thereof, or
(3) default is made in the deposit of any sinking fund
payment, when and as due by the terms of a Security of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal (and premium, if any) and interest and for any sinking
fund payment and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any), on any
overdue interest and on any overdue sinking fund payment, at the rate or rates
prescribed therefor in such Securities, and, in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute
a judicial proceeding for the collection of the sums so due unpaid, may, in its
discretion, prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon such Securities
and collect the moneys adjudged or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligor upon such
Securities, wherever situated.
If an Event of Default, of which a Responsible Officer of the Trustee
has actual knowledge, with respect to Securities of any series occurs and is
continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
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SECTION 5.4. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of any of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
on the Company for the payment of overdue principal or interest or any sinking
fund payment) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (or, with respect to Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms
of such Securities) (and premium, if any), interest and sinking fund
payments owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of an Holder in any such proceeding.
SECTION 5.5. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
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SECTION 5.6. Application of Money Collected.
Subject to Article Nineteen, any money collected by the Trustee
pursuant to this Article shall be applied in the following order, at the date
or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal (or premium, if any), interest or sinking fund 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 under
Section 6.7; and
SECOND: To the payment of the amounts then due and unpaid
for principal of and (any premium, if any), and interest on, and
sinking fund payments with respect to, the Securities in respect of
which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal (and premium,
it any), and interest and sinking fund payments, respectively.
SECTION 5.7. Limitation on Suits.
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the
Securities of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
indemnity, reasonably satisfactory to the Trustee, against the costs,
expenses (including reasonable legal fees and 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 all Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain
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priority or preference over any other of such Holders or to enforce any right
under this Indenture, except in the manner herein provided and for the equal
and ratable benefit of all of such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of (and premium, if any) and (subject to
Section 3.7) interest on such Security on the Stated Maturity or Maturities
expressed in such Security (or, in the case of redemption, on the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder.
SECTION 5.9. 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 3.6, 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 Securities
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by
law to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
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SECTION 5.12. Control by Holders.
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that
(1) such direction shall not be in conflict with any rule
of law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to the
Securities of such series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any)
or interest on any Security of such series the Securities of or in the
payment of any sinking fund installment with respect to the Securities
of such series, or
(2) in respect of a covenant or provision hereof which
under Article Nine cannot be modified or amended without the consent
of the Holder of each Outstanding Security of such series affected;
provided, however, that if the Securities of such series are held by a Textron
Trust or a trustee of such trust or by the Textron Partnership, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the applicable
Textron Trust or of the applicable series of Partnership Preferred Securities,
as the case may be, shall have consented to such waiver or modification to such
waiver; provided further, that if the consent of the Holder of each Outstanding
Securities is required, such waiver shall not be effective until each holder of
the Trust Securities of the applicable Textron Trust or of the applicable
series Partnership Preferred Securities, as the case may be, shall have
consented to such waiver.
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 Event of Default or impair any right consequent thereon.
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SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Company, to any suit instituted by the Trustee, to any suit instituted by any
Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities of any series, or to any suit
instituted by any Holder for the enforcement of the payment of the principal of
(or premiums, if any) or interest on any Security on or after the Stated
Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
ARTICLE VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default;
(1) the Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements
of this Indenture; but in the case of any such certificates or
opinions which by any provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the requirements
of this Indenture.
(b) In case an Event of Default, of which a Responsible Officer of
the Trustee has actual knowledge, has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture,
and use the same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his own
affairs.
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(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this subsection shall not be construed to limit the
effect of subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall
be proved that the Trustee was negligent in ascertaining the pertinent
facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of the Holders of a majority in principal amount of
the Outstanding Securities of any series determined as provided in
Section 5.12, relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture with
respect to the Securities of such series; and
(4) no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder,
or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or
indemnity, reasonably satisfactory to it, against such risk or
liability is not reasonably assured to it.
(d) 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 6.2. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with
respect to Securities of any series, the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in
the Security Register, notice of such default hereunder actually known to a
Responsible Officer of the Trustee, unless such default shall have been cured
or waived; provided that, except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security of such series or
in the payment of any sinking fund installment with respect to Securities of
such series, the Trustee shall be protected in withholding such notice if and
so long as a Responsible Officer of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders of Securities
of such series; and provided, further, that in the case of any default of the
character specified in Section 5.1(4) with respect to Securities of such
series, no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any
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event which is, or after notice or lapse of time or both would become, an Event
of Default with respect to Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or Company
Order, and any resolution of the Board of Directors may be
sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, conclusively rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the written
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 security or
indemnity, reasonably satisfactory to it, against the costs, expenses
and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney; and
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(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.
SECTION 6.4. 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 or any Authenticating Agent assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of this Indenture or of the Securities. The
Trustee or any Authenticating Agent shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Security
Registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
SECTION 6.6. 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 6.7. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents, nominees, custodians and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or
bad faith; and
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(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the 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.
As security for the performance of the obligations of the Company
under this Section, the Trustee shall have a lien prior to the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of Holders of particular Securities. The
obligations of the Company under this Section shall survive the satisfaction
and discharge of this Indenture.
SECTION 6.8. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it
shall, within 90 days after a Responsible Officer of the Trustee ascertains
that it has such conflicting interest, either eliminate such conflicting
interest or resign with respect to the Securities of that series in the manner
and with the effect hereinafter specified in this Article.
(b) In the event that the Trustee shall fail to comply with the
provisions of subsection (a) of this Section with respect to the Securities of
any series, the Trustee shall, within 10 days after the expiration of such
90-day period, transmit by mail to all Holders of Securities of that series, as
their names and addresses appear in the Security Register, notice of such
failure.
(c) For the purposes of this Section, the Trustee shall be deemed to
have a conflicting interest with respect to the Securities of any series if
(1) the Trustee is trustee under this Indenture with
respect to the Outstanding Securities of any series other than that
series or is trustee under another indenture under which any other
securities, or certificates of interest or participation in any other
securities, of the Company are outstanding, unless such other
indenture is a collateral trust indenture under which the only
collateral consists of Securities issued under this Indenture,
provided that there shall be excluded from the operation of this
paragraph this Indenture with respect to the Securities of any series
other than that series or any indenture or indentures under which
other securities, or certificates of interest or participation in
other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or
indentures are wholly unsecured and such other indenture or
indentures are hereafter qualified under the Trust Indenture
Act, unless the Commission shall have found and declared by
order pursuant to Section 305(b) or Section 307(c) of the
Trust Indenture Act that differences exist between the
provisions of this Indenture with respect to Securities of
that series and one or more other series or the provisions
of such
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other indenture or indentures which are so likely to involve
a material conflict of interest as to make it necessary in
the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to the Securities of that series and
such other series or under such other indenture or
indentures, or
(ii) the Company shall have sustained the burden of
proving, on application to the Commission and after
opportunity for hearing thereon, that trusteeship under this
Indenture with respect to the Securities of that series and
such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as
to make it necessary in the public interest or for the
protection of investors to disqualify the Trustee from
acting as such under this Indenture with respect to the
Securities of that series and such other series or under
such other indenture or indentures;
(2) the Trustee or any of its directors or executive
officers is an obligor upon the Securities or an underwriter for the
Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or indirect
common control with the Company or an underwriter for the Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than the
Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (1) one individual may be a
director or an executive officer, or both, of the Trustee and a
director or an executive officer, or both, of the Company but may not
be at the same time an executive officer of both the Trustee and the
Company; (ii) if and so long as the number of directors of the Trustee
in office is more than nine, one additional individual may be a
director or an executive officer, or both, of the Trustee and a
director of the Company; and (iii) the Trustee may be designated by
the Company or by any underwriter for the Company to act in the
capacity of transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent or depositary, or in any other similar capacity,
or, subject to the provisions of paragraph (1) of this subsection, to
act as trustee, whether under an indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner
or executive officer thereof, or 20% or more of such voting securities
is beneficially owned, collectively, by any two or more of such
persons; or 10% or more of the voting securities of the Trustee is
beneficially owned either by an underwriter for the Company or by any
director, partner or executive officer thereof, or is beneficially
owned, collectively, by any two or more such persons;
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(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection defined), (1) 5% or more of the voting
securities, or 10% or more of any other class of security, of the
Company not including the Securities issued under this Indenture and
securities issued under any other indenture under which the Trustee is
also trustee, or (ii) 10% or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection defined), 5% or more of the voting
securities of any person who, to the actual knowledge of a Responsible
Officer of the Trustee, owns 10% or more of the voting securities of,
or controls directly or indirectly or is under direct or indirect
common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection defined), 10% or more of any class of
security of any person who, to the actual knowledge of a Responsible
Officer of the Trustee, owns 50% or more of the voting securities of
the Company; or
(9) the Trustee owns, on May 15 in any calendar year, in
the capacity of executor, administrator, testamentary or inter vivos
trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of
any class of security, of any person, the beneficial ownership of a
specified percentage of which would have constituted a conflicting
interest under paragraph (6), (7) or (8) of this subsection. As to
any such securities of which the Trustee acquired ownership through
becoming executor, administrator or testamentary trustee of an estate
which included them, the provisions of the preceding sentence shall
not apply, for a period of two years from the date of such
acquisition, to the extent that such securities included in such
estate do not exceed 25% of such voting securities or 25% of any such
class of security. Promptly after May 15 in each calendar year, the
Trustee shall make a check of its holdings of such securities in any
of the above-mentioned capacities as of such May 15. If the Company
fails to make payment in full of the principal of (or premium, if any)
or interest on any of the Securities when and as the same becomes due
and payable, and such failure continues for 30 days thereafter, the
Trustee shall make a prompt check of its holdings of such securities
in any of the above-mentioned capacities as of the date of the
expiration of such 30-day period, and after such date, notwithstanding
the foregoing provisions of this paragraph, all such securities so
held by the Trustee, with sole or joint control over such securities
vested in it, shall, but only so long as such failure shall continue,
be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this subsection.
The specification of percentages in paragraphs (5) to (9), inclusive,
of this subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection.
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For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection only, (i) the terms "security" and "securities" shall include only
such securities as are generally known as corporate securities, but shall not
include any note or other evidence of indebtedness issued to evidence an
obligation to repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or participation in
any such note or evidence of indebtedness; (ii) an obligation shall be deemed
to be "in default" when a default in payment of principal shall have continued
for 30 days or more and shall not have been cured; and (iii) the Trustee shall
not be deemed to be the owner or holder of (A) any security which it holds as
collateral security, as trustee or otherwise, for an obligation which is not in
default as defined in clause (ii) above, or (B) any security which it holds as
collateral security under this Indenture, irrespective of any default
hereunder, or (C) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar representative
capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to the
Company, means every person who, within three years prior to the time
as of which the determination is made, has purchased from the Company
with a view to, or has offered or sold for the Company in connection
with, the distribution of any security of the Company outstanding at
such time, or has participated or has had a direct or indirect
participation in any such undertaking, or has participated or has had
a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest
was limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" means any director of a corporation
or any individual performing similar functions with respect to any
organization, whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership. an association, a joint-stock company, a trust, an
unincorporated organization or a government or political subdivision
thereof. As used in this paragraph, the term "trust" shall include
only a trust where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently
entitling the owner or holder thereof to vote in the direction or
management of the affairs of a person, or any security issued under or
pursuant to any trust, agreement or arrangement whereby a trustee or
trustees or agent or agents for the owner or holder of such security
are presently entitled to vote in the direction or management of the
affairs of a person.
(5) The term "Company" means any obligor upon the
Securities.
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(6) The term "executive officer" means the president, every
vice president, every trust officer, the cashier, the secretary and
the treasurer of a corporation, and any individual customarily
performing similar functions with respect to any organization whether
incorporated or unincorporated, but shall not include the chairman of
the board of directors.
(e) The percentages of voting securities and other securities
specified in this Section shall be calculated in accordance with the following
provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this Section
(each of whom is referred to as a "person" in this paragraph) means
such amount of the outstanding voting securities of such person as
entities the holder or holders thereof to cast such specified
percentage of the aggregate votes which the holders of all the
outstanding voting securities of such person are entitled to cast in
the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of securities of
the class outstanding.
(3) The term "amount," when used in regard to securities,
means the principal amount if relating to evidences of indebtedness,
the number of shares if relating to capital shares and the number of
units if relating to any other kind of security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not be
deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if
the obligation evidenced by such other class of securities
is not in default as to principal or interest or otherwise;
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default as
to principal or interest or otherwise; and
(iv) securities held in escrow if placed in escrow
by the issuer thereof;
provided that any voting securities of an issuer shall be deemed
outstanding if any person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or holders
thereof substantially the same rights and
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privileges; provided that, in the case of secured evidences of
indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various series
thereof shall not be deemed sufficient to constitute such series
different classes and provided, further, that, in the case of
unsecured evidences of indebtedness, differences in the interest rates
or maturity dates thereof shall not be deemed sufficient to constitute
them securities of different classes, whether or not they are issued
under a single indenture.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America, any State thereof or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by Federal or
State authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of said supervision or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
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 in accordance with the
applicable requirements of Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 6.11 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8(a)
after written request therefor by the Company or by any Holder who has
been a bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section
6.9 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, by a Board Resolution, may remove the
Trustee with respect to all Securities, 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 with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause,
with respect to the Securities of one or more series, the Company, by a Board
Resolution, shall promptly appoint a successor Trustee or Trustees with respect
to the Securities of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the Securities of one or
more or all of such series and that at any time there shall be only one Trustee
with respect to the Securities of any particular series) and shall comply with
the applicable requirements of Section 6.11. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements
of Section 6.11, become the successor Trustee with respect to the Securities of
such series and to that extent supersede the successor Trustee appointed by the
Company. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders and accepted
appointment in the manner required by Section 6.11, any Holder who has been a
bona fide Holder of a Security of such series for at least six months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid,
to all Holders of Securities of such series as their names and addresses appear
in the Security Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
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SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1)
shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of
that or those series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with respect to the
Securities of all series for which it is the Trustee hereunder, shall contain
such provisions as shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (3) shall add
to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees co- trustees of the same
trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
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(d) No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
(e) The Trustee shall not be liable for the acts or omissions to act
of any successor Trustee.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.13. Preferential Collection of Claims Against Company.
(a) Subject to subsection (b) of this Section, if the Trustee shall
be or shall become a creditor, directly or indirectly, secured or unsecured, of
the Company within four months prior to a default, as defined in subsection (c)
of this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of principal
or interest, effected after the beginning of such four months' period
and valid as against the Company and its other creditors, except any
such reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or from the
exercise of any right of set-off which the Trustee could have
exercised if a petition in bankruptcy had been filed by or against the
Company upon the date of such default; and
(2) all property received by the Trustee in respect of any
claims as such creditor, either as security therefor, or in
satisfaction or composition thereof. or otherwise, after the beginning
of such four months' period, or an amount equal to the proceeds of any
such property, if disposed of, subject, however, to the rights, if
any, of the Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
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(A) to retain for its own account (i) payments made on
account of any such claim by any Person (other than the Company) who
is liable thereon, and (ii) the proceeds of the bona fide sale of any
such claim by the Trustee to a third Person, and (iii) distributions
made in cash, securities or other property in respect of claims filed
against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so held
prior to the beginning of such four months' period;
(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it as
security for any such claim, if such claim was created after the
beginning of such four months' period and such property was received
as security therefor simultaneously with the creation thereof, and if
the Trustee shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause to
believe that a default, as defined in subsection (c) of this Section,
would occur within four months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property held as
security for such claim as provided in paragraph (B) or (C), as the
case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted
after the beginning of such four months' period for property held as security
at the time of such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released, and, to the
extent that any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying or refunding
any pre-existing claim of the Trustee as such creditor, such claim shall have
the same status as such pre-existing claim.
If the Trustee shall be required to account, the funds and property
held in such special account and the proceeds thereof shall be apportioned
among the Trustee, the Holders and the holders of other indenture securities in
such manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on
account of the receipt by it from the Company of the funds and property in such
special account and before crediting to the respective claims of the Trustee
and the Holders and the holders of other indenture securities dividends on
claims filed against the Company in bankruptcy or receivership or in
proceedings for reorganization pursuant to the Federal Bankruptcy Act or
applicable State law, but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all sources other than
from such
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dividends and from the funds and property so held in such special account. As
used in this paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in bankruptcy or
receivership or proceedings for reorganization pursuant to the Federal
Bankruptcy Act or applicable State law, whether such distribution is made in
cash, securities or other property, but shall not include any such distribution
with respect to the secured portion, if any, of such claim. The court in which
such bankruptcy, receivership or proceedings for reorganization is pending
shall have jurisdiction (i) to apportion among the Trustee, the Holders and the
holders of other indenture securities, in accordance with the provisions of
this paragraph, the funds and property held in such special account and
proceeds thereof, or (ii) in lieu of such apportionment, in whole or in part,
to give to the provisions of this paragraph due consideration in determining
the fairness of the distributions to be made to the Trustee and the Holders and
the holders of other indenture securities with respect to their respective
claims, in which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such special account or
as security for any such claim, or to make a specific allocation of such
distributions as between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of
such four months' period shall be subject to the provisions of this subsection
as though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such four months' period, it
shall be subject to the provisions of this subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim, which
would have given rise to the obligation to account, if such Trustee
had continued as Trustee, occurred after the beginning of such four
months' period; and
(ii) such receipt of property or reduction of claim
occurred within four months after such resignation or removal.
(b) There shall be excluded from the operation of subsection (a) of
this Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of one
year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction or by this Indenture, for the purpose
of preserving any property which shall at any time be subject to the
lien of this Indenture or of discharging tax liens or other prior
liens or encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the Holders
at the time and in the manner provided in this Indenture;
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(3) disbursements made in the ordinary course of business
in the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, fiscal agent or depositary, or
other similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a result of
goods or securities sold in a cash transaction, as defined in
subsection (c) of this Section;
(5) the ownership of stock or of other securities of a
corporation organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly a
creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation
of any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper, as defined
in Subsection (c) of this Section.
(c) For the purposes of this Section only:
(1) the term "default" means any failure to make payment in
full of the principal of or interest on any of the Securities or upon
the other indenture securities when and as such principal or interest
becomes due and payable;
(2) the term "other indenture securities" means securities
upon which the Company is an obligor outstanding under any other
indenture (i) under which the Trustee is also trustee, (ii) which
contains provisions substantially similar to the provisions of this
Section, and (iii) under which a default exists at the time of the
apportionment of the funds and property held in such special account;
(3) the term "cash transaction" means any transaction in
which full payment for goods or securities sold is made within seven
days after delivery of the goods or securities in currency or in
checks or other orders drawn upon banks or bankers and payable upon
demand;
(4) the term "self-liquidating paper" means any draft, bill
of exchange, acceptance or obligation which is made, drawn, negotiated
or incurred by the Company for the purpose of financing the purchase,
processing, manufacturing, shipment, storage or sale of goods, wares
or merchandise and which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or merchandise or the
receivables or proceeds arising from the sale of the goods, wares or
merchandise previously constituting the security, provided the
security is received by the Trustee simultaneously with the creation
of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation;
(5) the term "Company" means any obligor upon the
Securities; and
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(6) the term "Federal Bankruptcy Act" means the Bankruptcy
Act or Title 11 of the United States Code.
SECTION 6.14. Appointment of Authenticating Agent.
At any time when any of the Securities remain Outstanding the Trustee
may appoint an Authenticating Agent or Agents with respect to one or more
series of Securities which shall be authorized to act on behalf of the Trustee
to authenticate Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 3.6, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment by first-class mail, postage prepaid, to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve, as
their names and addresses appear in the Security Register. Any
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successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon an
alternative certificate of authentication in the following form:
"This is one of the Securities of the series designated herein
referred to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK, N.A., As Trustee
By . . . . . . . . . . . . . . . . . . . . . . .
As Authenticating Agent
By . . . . . . . . . . . . . . . . . . . . . . .
Authorized Officer
ARTICLE VII
HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually not more than 15 days after each Regular
Record Date a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Securities of
such series as of the preceding March 1 or September 1, or as of such
Regular Record Date, as the case may be, and
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(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;
provided that if and so long as the Trustee shall be the Security Registrar for
such series, such list shall not be required to be furnished.
SECTION 7.2. 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 7.1 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 7.1 upon receipt of a new list so furnished.
(b) If three or more Holders of Securities of the same series (herein
referred to as "applicants") apply in writing to the Trustee, and furnish to
the Trustee reasonable proof that each such applicant has owned a Security of
such series for a period of at least six months preceding the date of such
application, and such application states that the applicants' desire to
communicate with other Holders of such series with respect to their rights
under this Indenture or under the Securities of such series and is accompanied
by a copy of the form of proxy or other communication which such applicants
propose to transmit, then the Trustee shall, within five business days after
the receipt of such application, at its election, either
(i) afford such applicants access to the information with
respect to the Holders of such series preserved at the time by the
Trustee in accordance with Section 7.2(a), or
(ii) inform such applicants as to the approximate number of
Holders of such series whose names and addresses appear in the
information preserved at the time by the Trustee in accordance with
Section 7.2(a), and as to the approximate cost of mailing to such
Holders the form of proxy or other communication, if any, specified in
such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder of such series whose name and address appear in
the information preserved at the time by the Trustee in accordance with Section
7.2(a) a copy of the form of proxy or other communication which is specified in
such request, with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such mailing would be contrary to the best
interest of the Holders of such series or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a
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hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the
entry of an order sustaining one or more of such objections, the Commission
shall find, after notice and opportunity for hearing, that all the objections
so sustained have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Holders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 7.2(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 7.2(b).
SECTION 7.3. Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1996, the Trustee shall transmit by mail to all Holders of Securities for which
it is Trustee hereunder, as their names and addresses appear in the Security
Register, a brief report dated as of such May 15 with respect to:
(1) its eligibility under Section 6.9 and its
qualifications under Section 6.8, or in lieu thereof, if to the best
of its knowledge it has continued to be eligible and qualified under
said Sections, a written statement to such effect;
(2) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the date
of such report, and for the reimbursement of which it claims or may
claim a lien or charge, prior to that of such Securities, on any
property or funds held or collected by it as Trustee, except that the
Trustee shall not be required (but may elect) to report such advances
if such advances so remaining unpaid aggregate not more than 1/2 of
1% of the principal amount of such Securities Outstanding on the date
of such report;
(3) the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on
the Securities) to the Trustee in its individual capacity, on the date
of such report, with a brief description of any property held as
collateral security therefor, except an indebtedness based upon a
creditor relationship arising in any manner described in Section
6.13(b)(2), (3), (4) or (6);
(4) the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
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(5) any additional issue of Securities for which it is
Trustee hereunder which the Trustee has not previously reported; and
(6) any action taken by the Trustee in the performance of
its duties hereunder which it has not previously reported and which in
its opinion materially affects such Securities, except action in
respect of a default, notice of which has been or is to be withheld by
the Trustee in accordance with Section 6.2.
(b) The Trustee shall transmit by mail to all Holders of Securities
for which it is Trustee hereunder, as their names and addresses appear in the
Security Register, a brief report with respect to the character and amount of
any advances (and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such) since the date of
the last report transmitted pursuant to subsection (a) of this Section (or if
no such report has yet been so transmitted, since the date of execution of this
instrument) for the reimbursement of which it claims or may claim a lien or
charge, prior to that of such Securities, on property or funds held or
collected by it as Trustee and which it has not previously reported pursuant to
this subsection, except that the Trustee shall not be required (but may elect)
to report such advances if such advances remaining unpaid at any time aggregate
10% or less of the principal amount of such Securities Outstanding at such
time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such
transmission to such Holders, be filed by the Trustee with each stock exchange
upon which any such Securities are listed, with the Commission and with the
Company. The Company will notify the Trustee when any such Securities are
listed on any stock exchange.
SECTION 7.4. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company may
be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934; or, if the
Company is not required to file information, documents or reports
pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which
may be required pursuant to Section 13 of the Securities Exchange Act
of 1934 in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such
rules and regulations;
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(2) file with the Trustee and the Commission, in accordance
with rules and regulations prescribed from time to time by the
Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants
of this Indenture as may be required from time to time by such rules
and regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other
corporation or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(1) the corporation formed by such consolidation or into
which the Company is merged or the Person which acquires by conveyance
or transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation organized and
existing under the laws of the United States of America, any State
thereof or the District of Columbia and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of
the principal of (and premium, if any) and interest on all the
Securities and the performance of every covenant of this Indenture on
the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction, 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; and
(3) the Company has delivered to the Trustee an Officer's
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.
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SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation of the Company with, or merger of the Company
into, any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 8.1, the successor corporation 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 corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the predecessor corporation shall be relieved of
all obligations and covenants under this Indenture and the Securities.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. 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 corporation to
the Company and the assumption by any such successor of the covenants
of the Company herein and in the Securities, pursuant to Article VIII;
or
(2) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change any of the provisions of this
Indenture to such extent as shall be necessary to permit or
facilitate the issuance of Securities in bearer form, registrable or
not registrable as to principal, and with or without interest coupons;
or
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(5) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall become
effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision; or
(6) to secure the Securities; or
(7) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 and 3.1; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or
(9) 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, provided such action shall not
adversely affect the interests of the Holders of Securities of any
series in any material respect.
SECTION 9.2. 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 of each series affected by such
supplemental indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of Securities of such series under this Indenture; provided that no
such supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or
any installment of principal of or interest on, any Security, or
reduce the principal amount thereof or the rate of interest thereon
(including any change in the Floating or Adjustable Rate Provision
pursuant to which such rate is determined that would reduce that rate
for any period) or any premium payable upon the redemption thereof, or
reduce the amount of the principal of an Original Issue Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2, or
change any Place of Payment where, or the coin or currency in which,
any Security or any premium or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or modify the provisions
of this
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Indenture with respect to the subordination of the Securities in a
manner adverse to the Holders, or
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section 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; provided that this clause shall not be deemed to
require the consent of any Holder with respect to changes in the
references to "the Trustee" and concomitant changes in this Section or
the deletion of this proviso, in accordance with the requirements of
Sections 6.11(b) and 9.1(8);
provided, further, that if the Securities of such series are held by a Textron
Trust or a trustee of such trust or by the Textron Partnership, such
supplemental indenture shall not be effective until the holders of a majority
in liquidation preference of Trust Securities of the applicable Textron Trust
or of the applicable series of Partnership Preferred Securities, as the case
may be, shall have consented to such supplemental indenture; provided further,
that if the consent of the Holder of each Outstanding Securities is required,
such supplemental indenture shall not be effective until each holder of the
Trust Securities of the applicable Textron Trust or of the applicable series
Partnership Preferred Securities, as the case may be, shall have consented to
such supplemental indenture.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of the Holders of Securities of such series with respect to such
covenant or other provision, shall be deemed not to affect the rights under
this Indenture of the Holders of Securities of any other series.
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 9.3. 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 6.1) 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,
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enter into any such supplemental indenture which affects the Trustee's own
rights, duties or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities of any series so modified as to conform, in
the opinion of the Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authenticated and delivered by
the Trustee in exchange for Outstanding Securities of such series.
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest on the Securities of that series in accordance with the
terms of the Securities of such series and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of
the location, and any change in the location, of such office or agency. If at
any time
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the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or
agency in each Place of Payment for Securities of any series for such purposes.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 10.3. Money for Securities Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of
its action or failure so to act.
The Company will cause each Paying Agent for any series of Securities
other than the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of (and premium, if any) or interest on Securities of that
series in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as
herein provided;
(2) give the Trustee notice of any default by the Company
(or any other obligor upon the Securities of that series) in the
making of any payment of principal (and premium, if any) or interest
on the Securities of that series; and
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(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of (and premium, if
any) or interest on any Security of any series and remaining unclaimed for
three years after such principal (and premium, if any) or interest has become
due and payable shall be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of
such Security shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all liability of the Company
as trustee thereof, shall thereupon cease; provided that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, New York, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 10.4. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
terms, provisions and conditions of Section 10.1 to 10.3, inclusive, and if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
SECTION 10.5. Covenants as to Textron Trusts.
In the event Securities are issued and sold to a Textron Trust or a
trustee of such trust in connection with the issuance of Trust Securities by
such Textron Trust, for so long as such Trust Securities remain outstanding,
the Company will (i) maintain 100% direct or indirect ownership of the
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Common Securities of such Textron Trust; provided, however, that any permitted
successor of the Company hereunder may succeed to the Company's ownership of
the Common Securities, (ii) not voluntarily dissolve, wind up or terminate such
Textron Trust, except in connection with a distribution of Securities upon a
Special Event, and in connection with certain mergers, consolidations or
amalgamations permitted by the Declaration of the applicable Textron Trust,
(iii) timely perform its duties as Sponsor of the applicable Textron Trust and
(iv) use its reasonable efforts to cause such Textron Trust (a) to remain a
business trust, except in connection with a distribution of Securities as
provided in the Declaration of such Textron Trust, the redemption of all of the
Trust Securities and in connection with certain mergers, consolidations or
amalgamation permitted by the Declaration of such Textron Trust, and (b)
otherwise continue to be classified as a grantor trust for United States
Federal income tax purposes.
SECTION 10.6. Covenants As To Textron Partnership.
In the event Securities of a Series are issued and sold to the Textron
Partnership in connection with the issuance of a Series of Partnership
Preferred Securities, for so long as such Partnership Preferred Securities
remain outstanding, the Company will (i) remain the sole general partner of
Textron Partnership and maintain 100% ownership of the general partner
interests thereof; provided that any permitted successor of the Company
hereunder may succeed to its duties as general partner, (ii) contribute capital
to the extent required to maintain its capital at an amount equal to at least
3% of the total capital contributions to Textron Partnership, (iii) not
voluntarily dissolve, wind up or terminate Textron Partnership, except in
connection with a distribution of Securities upon a Special Event and in
connection with certain mergers, consolidations or amalgamations permitted by
the Limited Partnership Agreement, (iv) timely perform all of its duties as
General Partner of Textron Partnership and (v) use its reasonable efforts to
cause Textron Partnership to remain a limited partnership except in connection
with a distribution of Securities upon a Special Event as provided in the
Limited Partnership Agreement, the redemption of all Partnership Preferred
Securities of the applicable series and in connection with certain mergers,
consolidations or amalgamations permitted by the Limited Partnership Agreement,
and otherwise to continue to be treated as a partnership for United States
federal income tax purposes.
The Company also covenants that so long as any Securities are held by
Textron Partnership, the General Partner shall not (i) direct the time, method
and place of conducting any proceeding for any remedy available to the Special
Representative, or exercising any trust or power conferred on the Special
Representative with respect to the Securities, (ii) waive any past default
which is waivable under this Indenture, (iii) exercise any right to rescind or
annul a declaration that the principal of all the Securities shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Securities or of this Indenture without, in each case, obtaining the prior
approval of the holders of at least a majority or more of the aggregate
liquidation preference of the Partnership Preferred Securities then
outstanding, PROVIDED, HOWEVER, that where a consent under the Securities would
require the consent of each holder affect thereby, no such consent shall be
given by the General Partner without the prior consent of each holder of the
Partnership Preferred Securities. The General Partner shall not revoke any
action previously authorized or approved by a vote of Partnership Preferred
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Securities without the approval of the holders of Partnership Preferred
Securities representing a majority or more of the aggregate liquidation
preference of the Outstanding Partnership Preferred Securities.
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1. Applicability of Article.
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any
series) in accordance with this Article.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution. In case of any redemption at the election of
the Company of less than all the Securities of any series, the Company shall,
at least 60 days prior to the Redemption Date fixed by the Company (unless a
shorter notice shall be satisfactory to the Trustee), notify the Trustee of
such Redemption Date and of the principal amount of Securities of such series
to be redeemed. In the case of any redemption of Securities prior to the
expiration of any restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall furnish the
Trustee with an Officers' Certificate evidencing compliance with such
restriction.
SECTION 11.3. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized denomination for
Securities of that series or any integral multiple thereof) of the principal
amount of Securities of such series of a denomination larger than the minimum
authorized denomination for Securities of that series.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in case of any Securities selected for
partial redemption, the principal amount thereof to be redeemed.
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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 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities of any
series are to be redeemed, the identification (and, in the case of
partial redemption, the principal amounts) of the particular
Securities of such series to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such
is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 11.5. Deposit of Redemption Price.
Prior to 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 10.3) 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.
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SECTION 11.6. 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, together with accrued
interest to the Redemption Date; provided 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
their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal (and premium, if any) shall,
until paid, bear interest from the Redemption Date at the rate prescribed
therefor in the Security.
SECTION 11.7. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at a Place of Payment for Securities of that series (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same
series, of like tenor and of any authorized denomination as requested by such
Holder, in aggregate principal amount equal to and in exchange for the
unredeemed portion of the principal of the Security so surrendered.
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of a series except as otherwise specified as
contemplated by Section 3.1 for the Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory
sinking fund payment," and any payment in excess of such minimum amount
provided for by the terms of Securities of any series is herein referred to as
an "optional sinking fund payment." If provided for by the terms of Securities
of any series, the cash amount of any sinking fund payment may be subject to
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reduction as provided in Section 12.2. Each sinking fund payment shall be
applied to the redemption of Securities as provided for by the terms of
Securities of such series.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver to the Trustee Outstanding Securities of a
series (other than any previously called for redemption) and (2) may apply as a
credit Securities of a series which have been redeemed either at the election
of the Company pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant to the terms
of such Securities, in each case in satisfaction of all or any part of any
sinking fund payment with respect to any Securities of such series required to
be made pursuant to the terms of such Securities as provided for by the terms
of such Securities; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such purpose by
the Trustee at the Redemption Price specified in such Securities for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering and crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 45 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.3 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.4. The Company shall deposit the
amount of cash, if any, required for such sinking fund payment with the Trustee
in the manner provided in Section 11.5. Such notice having been duly given,
the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.6 and 11.7.
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Agreement to Subordinate.
The Company covenants and agrees, and each Holder of any Security
issued hereunder by his acceptance thereof, whether upon original issue or upon
transfer or assignment, likewise covenants and agrees, that the principal of
(and premium, if any) and interest on each and all of the Securities issued
hereunder are hereby expressly subordinated, to the extent and in the
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manner hereinafter set forth, in right of payment to the prior payment in full
of all Senior Indebtedness.
SECTION 13.2. Payment on Dissolution, Liquidation or Reorganization;
Default on Senior Indebtedness.
Upon any payment or distribution of assets or securities of the
Company of any kind or character, whether in cash, property or securities, upon
any dissolution or winding up or total or partial liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other similar proceedings, or upon any assignment for the
benefit of creditors or any other marshalling of the assets and liabilities of
the Company or otherwise, all principal of (and premium, if any) and interest
then due upon all Senior Indebtedness shall first be paid in full, or payment
thereof provided for in money or money's worth, before the Holders of the
Securities or the Trustee on their behalf shall be entitled to receive any
assets or securities (other than shares of stock of the Company as reorganized
or readjusted or securities of the Company or any other corporation provided
for by a plan of reorganization or readjustment, junior to, or the payment of
which is subordinated at least to the extent provided in this Article to the
payment of, all Senior Indebtedness which may at the time be outstanding or any
securities issued in respect thereof under any such plan of reorganization or
readjustment) in respect of the Securities (for principal, premium or interest)
or of this Indenture; and upon any such dissolution or winding up or
liquidation or reorganization, any payment or distribution of assets or
securities of the Company of any kind or character, whether in cash, property
or securities (other than as aforesaid), to which the Holders of the Securities
or the Trustee on their behalf would be entitled, except for the provisions of
this Article, shall be made by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other person making such payment or
distribution, direct to the holders of Senior Indebtedness or their
representatives to the extent necessary to pay all Senior Indebtedness in full,
in money or money's worth, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness. In the event that,
notwithstanding the foregoing, the Trustee or the Holder of any Security shall,
under the circumstances described in the preceding sentence, have received any
payment or distribution of assets or securities of the Company of any kind or
character, whether in cash, property or securities (other than as aforesaid)
before all Senior Indebtedness is paid in full or payment thereof provided for
in money or money's worth, and if such fact shall then have been made actually
known to a Responsible Officer of the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution of assets or
securities of the Company shall be paid over or delivered forthwith to the
receiver, trustee in bankruptcy, liquidating trustee, agent or other person
making payment or distribution of assets or securities of the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full, in money or money's
worth, after giving effect to any concurrent payment or distribution to or for
the holders of Senior Indebtedness.
Subject to the payment in full, in money or money's worth, of all
Senior Indebtedness, the Holders of the Securities (together with the holders
of any indebtedness of the Company
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which is subordinate in right of payment to the payment in full of all Senior
Indebtedness and which is not subordinate in right of payment to the
Securities) shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distribution of assets or securities of the
Company applicable to Senior Indebtedness until the principal of (and premium,
if any) and interest on the Securities shall be paid in full, and no such
payments or distributions applicable to Senior Indebtedness shall, as between
the Company, its creditors other than the holders of Senior Indebtedness, and
the Holders of the Securities, be deemed to be a payment by the Company to or
on account of the Securities, it being understood that the provisions of this
Article are and are intended solely for the purpose of defining the relative
rights of the Holders of the Securities, on the one hand, and the holders of
Senior Indebtedness, on the other hand, and nothing contained in this Article
or elsewhere in this Indenture or in the Securities is intended to or shall
impair, as between the Company and the Holders of Securities, the obligation of
the Company, which is unconditional and absolute, 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 to affect (except to the extent specifically provided above in
this paragraph) the relative rights of the Holders of the Securities and
creditors of the Company other than the holders of Senior Indebtedness, 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, of the holders of Senior Indebtedness in respect of assets or
securities of the Company of any kind or character, whether cash, property or
securities, received upon the exercise of any such remedy.
Upon any payment or distribution of assets or securities of the
Company referred to in this Article, the Trustee and the Holders of the
Securities shall be entitled to conclusively rely upon any order or decree of a
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, and upon a certificate
of the receiver, trustee in bankruptcy, liquidating trustee, agent or other
person making any such payment or distribution, delivered to the Trustee or to
the Holders of the Securities for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article.
If there shall have occurred a default in the payment on account of
the principal of (or premium, if any) or interest on or sinking fund for any
Senior Indebtedness then, unless and until such default shall have been cured
or waived or shall have ceased to exist, no payment shall be made by the
Company on account of the principal (or premium, if any) or interest on the
Securities.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
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SECTION 13.3. Payment Prior to Dissolution or Default.
Nothing contained in this Article or elsewhere in this Indenture, or
in any of the Securities, shall prevent (a) the Company, at any time except
under the conditions described in Section 13.2 or during the pendency of any
dissolution or winding up or total or partial liquidation or reorganization
proceedings therein referred to, from making payments at any time of principal
of (or premium. if any) or interest on Securities or from depositing with the
Trustee or any Paying Agent moneys for such payments, or (b) the application by
the Trustee or any Paying Agent of any moneys deposited with it under this
Indenture to the payment of or on account of the principal of (or premium, if
any) or interest on Securities to the Holders entitled thereto if such payment
would not have been prohibited by the provisions of Section 13.2 on the day
such moneys were so deposited.
Notwithstanding the provisions of Section 13.1 or any other provision
of this Indenture, the Trustee and any Paying Agent shall not be charged with
knowledge of the existence of any Senior Indebtedness, or of the occurrence of
any default with respect to Senior Indebtedness of the character described in
Section 13.2, or of any other facts which would prohibit the making of any
payment of moneys to or by the Trustee or such Paying Agent, unless and until
the Trustee shall have received written notice thereof from the Company or from
a holder of such Senior Indebtedness and the Trustee shall not be affected by
any such notice which may be received by it on or after the date on which the
Trustee may, by the terms of this Indenture, make any such payment to the
extent the Trustee has so made any such payment.
SECTION 13.4. Rights of Holders of Senior Indebtedness not Impaired.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
The provisions of this Article are intended to be for the benefit of,
and shall be enforceable directly by, the holders of Senior Indebtedness.
Neither the Trustee nor any Paying Agent shall be deemed to owe any fiduciary
duty to the holders of Senior Indebtedness, and shall not be liable to any such
holders if either shall mistakenly pay over or distribute to or on behalf of
Holders of Securities or the Company moneys or assets to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article.
The Trustee and any agent of the Company or the Trustee shall be
entitled to all the rights set forth in this Article with respect to any Senior
Indebtedness at the time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in Section 6.13 or elsewhere in this Indenture
shall deprive the Trustee or any such agent of any of its rights as such
holder.
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<PAGE> 84
SECTION 13.5. Authorization of Trustee.
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article and
appoints the Trustee his attorney- in-fact for any and all such purposes.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1. Securities in a Foreign Currency.
Unless otherwise specified in an Officers' Certificate delivered
pursuant to Section 3.1 of this Indenture with respect to a particular series
of Securities, whenever for purposes of this Indenture any action may be taken
by the holders of a specified percentage in aggregate principal amount of
Securities of each series at the time Outstanding which is affected thereby
and, at such time, there are Outstanding Securities of such a series which are
denominated in a coin or currency other than United States dollars, then the
principal amount of Securities of such series which shall be deemed to be
Outstanding for the purpose of taking such action shall be that amount of
United States dollars that could be obtained for such amount at the Market
Exchange Rate on the Business Day next preceding the date upon which the action
is to be determined. For purposes of this Section 14.1, Market Exchange Rate
shall mean the noon United States dollar buying rate for that currency for
cable transfers quoted in New York City as certified for customs purposes by
the Federal Reserve Bank of New York; PROVIDED in the case of European Currency
Units ("ECUs"), Market Exchange Rate shall mean the rate of exchange determined
by the Commission of the European Communities (or any successor thereto) as
published in the Official Journal of the European Communities (such publication
or any successor publication, the "Journal"). If such Market Exchange Rate is
not available for any reason with respect to such currency, the Trustee shall
use, in its sole discretion and without liability on its part, such quotation
of the Federal Reserve Bank of New York or, in the case of ECUs, the rate of
exchange as published in the Journal, as of the most recent available data, or
quotations or, in the case of ECUs, rates of exchange from one or more major
banks in New York City or in the country of issue of the currency in question,
which for purposes of the ECU shall be Brussels, Belgium, or such other
quotations or, in the case of ECUs, rates of exchange as the Trustee shall deem
appropriate.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate shall be in its sole discretion and shall, in the absence of
manifest error, be conclusive for all purposes and irrevocably binding upon the
Company and all Holders.
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SECTION 14.2. Judgment Currency.
The Company agrees, to the fullest extent that it may effectively do
so under applicable law, that (a) if for the purpose of obtaining judgment in
any court it is necessary to convert any sum due in respect of the principal
of, premium, if any, or interest on the Securities of any series (the "Required
Currency") into United States dollars, the rate of exchange used shall be the
rate at which in accordance with normal banking procedures the Trustee could
purchase in The City of New York the Required Currency on the Business Day
preceding that on which final judgment is given and (b) its obligations under
this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount
of the Required Currency expressed to be payable in respect of such payments,
(ii) shall be enforceable as an alternative or additional cause of action for
the purpose of recovering in the Required Currency the amount, if any, by which
such actual receipt shall fall short of the full amount of the Required
Currency so expressed to be payable and (iii) shall not be affected by judgment
being obtained for any other sum due under this Indenture.
SECTION 14.3. Acknowledgement of Rights.
The Company acknowledges that, with respect to any Securities held by
either (i) a Textron Trust or a trustee of such trust or (ii) Textron
Partnership, if (a) the Institutional Trustee of such Trust or (b) the General
Partner or Special Representative of Textron Partnership, as the case may be,
fails to enforce its rights under this Indenture as the holder of the series of
Securities held as the assets of such Textron Trust or Textron Partnership, as
the case may be, any holder of Preferred Securities may institute legal
proceedings directly against the Company to enforce such Property Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Property Trustee, General Partner, or Special Representative or
any other person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and
is continuing and such event is attributable to the failure of the Company to
pay interest or principal on the applicable series of Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), the Company acknowledges that a holder of Trust
Preferred Securities may directly institute a proceeding for enforcement of
payment to such holder of the principal of or interest on the applicable series
of Securities having a principal amount equal to the aggregate liquidation
amount of the Trust Preferred Securities of such holder on or after the
respective due date specified in the applicable series of Securities.
SECTION 14.4. Special Representative of Textron Partnership.
(a) The Company expressly acknowledges that, under the
circumstances set forth in the Limited Partnership Agreement or action or
resolution thereunder, the holders of each series of Partnership Preferred
Securities shall have the right, prior to an exchange upon a Special Event of
such series of Partnership Preferred Securities, to appoint a Special
Representative if an Event of Default with respect to the series of Securities
related to such series of Partnership Preferred Securities or certain other
events specified in such Limited Partnership Agreement or action or resolution
thereunder shall have occurred and be continuing. Such Special Representative
shall be authorized to exercise the rights and remedies of Textron Partnership
that issued the Partnership Preferred Securities of such series as the Holder
of the related series of Securities under this Indenture, other than the right
to receive any payments on such Securities. Without limiting the foregoing,
such Special Representative shall be entitled to give any request,
77
<PAGE> 86
demand, authorization, direction, notice, consent or waiver hereunder as if it,
rather than Textron Partnership, were the Holder of the Securities of such
series and, in determining whether the Holders of the requisite principal
amount of Outstanding Securities of such series have given any such request,
demand, authorization, direction, notice, consent or waiver, such Securities
shall be deemed to be owned by the Special Representative rather than Textron
Partnership. Any Special Representative so appointed shall vacate office
immediately in accordance with the Limited Partnership Agreement if all Events
of Default or other events specified in the Limited Partnership Agreement or
action or resolution thereunder giving rise to such right or appointment have
been cured or waived. The Company shall notify the Trustee in writing when any
such Special Representative shall have been appointed and the date on which the
authority of the Special Representative shall have expired or terminated.
(b) Without limiting the generality of the foregoing, any
Special Representative appointed with respect to a series of Partnership
Preferred Securities, in its own name and as trustee of an express trust, may,
subject to Section 5.7, institute a proceeding, including, without limitation,
any suit in equity, an action at law or other judicial or administrative
proceeding, to enforce the creditor's rights of Textron Partnership as the
Holder of the related series of Securities directly against the Company to the
same extent and subject to the same limitations as Textron Partnership, as a
Holder, could do so and on behalf of Textron Partnership, and may prosecute
such proceeding to judgment or final decree, and enforce the same against the
Company and, subject to Article Thirteen, collect, out of the property,
wherever situated, of the Company the monies adjudged or decreed to be payable
in the manner and to the extent provided by law.
* * * *
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.
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<PAGE> 87
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
TEXTRON INC.
By________________________________
Name:
Title:
Attest:
___________________________
Name:
Title:
THE CHASE MANHATTAN BANK, N.A.,
As Trustee
By_________________________________
Name:
Title:
Attest:
_____________________________
Name:
Title:
79
<PAGE> 88
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss:
On the ___th day of January, 1996, before me personally came
______________, to me known, who, being by me duly sworn, did depose and say
that he is a _____________ of TEXTRON INC., one of the corporations described
in and which executed the foregoing instrument; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
__________________________
Notary
STATE OF NEW YORK )
COUNTY OF NEW YORK ) ss:
On the ____th day of January, 1996, before me personally came
__________, to me known, who, being by me duly sworn, did depose and say that
he is a _______________ of THE CHASE MANHATTAN BANK, N.A., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
__________________________
Notary
80
<PAGE> 1
EXHIBIT 4(t)
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Textron Capital I
Dated as of ________, 1996
====================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.2 Lists of Holders of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.3 Reports by the Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent . . . . . . . . . . . . . . . . . 6
SECTION 2.6 Events of Default; Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 2.7 Event of Default; Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.8 Conflicting Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee . . . . . . . . . . . . . . . 7
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee . . . . . . . . . . . . . . . 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . . . . . . . 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees . . . . . . . 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.2 Waiver of Notice and Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 5.3 Obligations Not Affected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 5.4 Rights of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.5 Guarantee of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.6 Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 5.7 Independent Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<TABLE>
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ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 6.2 Ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 8.2 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.2 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 9.4 Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 9.5 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
</TABLE>
ii
<PAGE> 4
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of ________, 1996, is executed and delivered by Textron
Inc., a Delaware corporation (the "Guarantor"), and The Chase Manhattan Bank,
N.A., as trustee (the "Preferred Guarantee Trustee"), for the benefit of the
Holders (as defined herein) from time to time of the Preferred Securities (as
defined herein) of Textron Capital I, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of ________, 1996, 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 [ ] preferred securities,
having an aggregate liquidation amount of $[ ] (plus up to an
additional [ ] preferred securities, having an aggregate
liquidation amount of $[ ], to cover over-allotments), designated
the _____% Trust Originated Preferred Securities (the "Preferred Securities");
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Preferred Securities Guarantee, to pay
to the Holders of the Preferred Securities the Guarantee Payments (as defined
herein) and to make certain other payments on the terms and conditions set
forth herein.
WHEREAS, the Guarantor is also executing and delivering a
guarantee agreement (the "Common Securities Guarantee") in substantially
identical terms to this Preferred Securities Guarantee for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event
of Default (as defined in the Indenture), has occurred and is 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 of
Preferred Securities to receive Guarantee Payments under this Preferred
Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each
Holder of Preferred Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Preferred
Securities Guarantee for the benefit of the Holders.
<PAGE> 5
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Preferred Securities Guarantee, unless the context
otherwise requires:
(a) Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have
the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(c) all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee"
are to this Preferred Securities Guarantee as
modified, supplemented or amended from time to time;
(d) all references in this Preferred Securities Guarantee
to Articles and Sections are to Articles and Sections
of this Preferred Securities Guarantee, unless
otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a day on which banking
institutions in the City of New York, New York are authorized or required by
any applicable law to close.
"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execu-
2
<PAGE> 6
tion of this Agreement is located at 4 Chase MetroTech Center, Brooklyn, New
York 11245.
"Covered Person" means any Holder or beneficial owner of
Preferred Securities.
"Debentures" means the series of junior subordinated debt
securities of the Guarantor designated the ___% Junior Subordinated Deferrable
Interest Debentures due [ ] held by the Institutional Trustee (as defined
in the Declaration) of the Issuer.
"Event of Default" means a default by the Guarantor on any of
its payment or other obligations under this Preferred Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred Securities,
to the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Preferred Securities to the extent the Issuer shall have funds available
therefor, (ii) the redemption price, including all accrued and unpaid
Distributions to the date of redemption (the "Redemption Price") to the extent
the Issuer has funds available therefor, with respect to any Preferred
Securities called for redemption by the Issuer, and (iii) upon a voluntary or
involuntary dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Declaration), the lesser of (a) the
aggregate of the liquidation amount and all accrued and unpaid Distributions on
the Preferred Securities to the date of payment, to the extent the Issuer shall
have funds available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer
(in either case, the "Liquidation Distribution"). If an event of default under
the Indenture has occurred and is continuing, the rights of holders of the
Common Securities to receive payments under the Common Securities Guarantee
Agreement are subordinated to the rights of Holders of Preferred Securities to
receive Guarantee Payments.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Preferred Guarantee Trustee,
any Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees,
3
<PAGE> 7
representatives, nominees, custodians or agents of the Preferred Guarantee
Trustee.
"Indenture" means the Indenture dated as of , 1996,
among the Guarantor (the "Debenture Issuer") and The Chase Manhattan Bank,
N.A., as trustee, and any indenture supplemental thereto pursuant to which
certain subordinated debt securities of the Debenture Issuer are to be issued
to the Property Trustee of the Issuer.
"Majority in liquidation amount of the Securities" means,
except as provided by the Trust Indenture Act, a vote by Holder(s) of Preferred
Securities, voting separately as a class, of more than 50% of the liquidation
amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date
upon which the voting percentages are determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers'
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 Officers' Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred Guarantee Trustee" means The Chase Manhattan Bank,
N.A., until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the
4
<PAGE> 8
terms of this Preferred Securities Guarantee and thereafter means each such
Successor Preferred Guarantee Trustee.
"Responsible Officer" means, with respect to the Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Preferred Guarantee Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Preferred 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.
"Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee and shall, to the extent applicable, be governed
by such provisions; and
(b) if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Preferred Guarantee
Trustee with a list, in such form as the Preferred Guarantee Trustee
may reasonably require, of the names and addresses of the Holders of
the Preferred Securities ("List of Holders") as of such date, (i)
within 1 Business Day after January 1 and June 30 of each year, 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 Preferred Guarantee
Trustee provided, that the Guarantor shall not be obligated to provide
such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Preferred Guarantee
Trustee
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by the Guarantor. The Preferred Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Section 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
SECTION 2.3 Reports by the Preferred Guarantee Trustee
Within 60 days after May 15 of each year, the Preferred
Guarantee Trustee shall provide to the Holders of the Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Preferred Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
The Guarantor shall provide to the Preferred Guarantee Trustee
such documents, reports and information as required by Section 314 (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act
in the form, in the manner and at the times required by Section 314 of the
Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Guarantee Trustee
such evidence of compliance with any conditions precedent, if any, provided for
in this Preferred Securities Guarantee that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given
in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.
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SECTION 2.7 Event of Default; Notice
(a) The Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Preferred Securities, notices of all
Events of Default actually known to a Responsible Officer of the Preferred
Guarantee Trustee, unless such defaults have been cured before the giving of
such notice, provided, that, the Preferred Guarantee Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the
Preferred Guarantee Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Event of Default unless the Preferred Guarantee
Trustee shall have received written notice, or of which a Responsible Officer
of the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Preferred Securities Guarantee for the purposes of clause (i) of the
first proviso contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Guarantee Trustee
(a) This Preferred Securities Guarantee shall be held by
the Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.4(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Preferred Guarantee Trustee has occurred and
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<PAGE> 11
is continuing, the Preferred Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the
occurrence of any Event of Default and after the curing of all Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Preferred Securities Guarantee, and no
implied covenants shall be read into this Preferred Securities Guarantee
against the Preferred Guarantee Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 2.6) and is
actually known to a Responsible Officer of the Preferred Guarantee Trustee, the
Preferred Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Preferred Securities Guarantee, and use the same degree of care
and skill in its exercise thereof, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee
shall be construed to relieve the Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may
have occurred:
(A) the duties and obligations of the Preferred
Guarantee Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and the
Preferred Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this
Preferred Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of
the Preferred Guarantee Trustee, the Preferred Guarantee
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the
Preferred Guarantee Trustee and conforming to the requirements
of this Preferred Securities Guarantee; but in the case of any
such certificates or opinions that by any provision hereof are
specifically required to be furnished to the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee shall be
under a duty to examine the same to determine
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whether or not they conform to the requirements of this
Preferred Securities Guarantee;
(ii) the Preferred Guarantee Trustee shall not be liable
for any error of judgment made in good faith by a Responsible Officer
of the Preferred Guarantee Trustee, unless it shall be proved that the
Preferred Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Preferred Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not less than
a Majority in liquidation amount of the Preferred Securities relating
to the time, method and place of conducting any proceeding for any
remedy available to the Preferred Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under
this Preferred Securities Guarantee; and
(iv) no provision of this Preferred Securities Guarantee
shall require the Preferred Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its
rights or powers, if the Preferred Guarantee Trustee shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this
Preferred Securities Guarantee or indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Preferred Guarantee Trustee may conclusively
rely, and shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Preferred Securities Guarantee shall be sufficiently evidenced by
a Direction or an Officers' Certificate.
(iii) Whenever, in the administration of this Preferred
Securities Guarantee, the Preferred Guarantee Trustee shall deem it
desirable that a matter be proved or established
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<PAGE> 13
before taking, suffering or omitting any action hereunder, the
Preferred Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which, upon
receipt of such request, shall be promptly delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to
see to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Preferred Guarantee Trustee may consult with
counsel, and the written advice or opinion of such counsel with
respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its Affiliates
and may include any of its employees. The Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from any court
of competent jurisdiction.
(vi) The Preferred Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by
this Preferred Securities Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory
to the Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be
requested by the Preferred Guarantee Trustee; provided that, nothing
contained in this Section 3.2(a)(vi) shall be taken to relieve the
Preferred Guarantee Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in
it by this Preferred Securities Guarantee.
(vii) The Preferred Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Preferred Guarantee Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit.
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(viii) The Preferred Guarantee Trustee may execute any of
the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents, nominees, custodians or attorneys,
and the Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Preferred Guarantee Trustee
or its agents hereunder shall bind the Holders of the Preferred
Securities, and the signature of the Preferred Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the
authority of the Preferred Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this Preferred
Securities Guarantee, both of which shall be conclusively evidenced by
the Preferred Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Preferred
Securities Guarantee the Preferred Guarantee Trustee shall deem it
desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Preferred Guarantee
Trustee (i) may request instructions from the Holders of a Majority in
liquidation amount of the Preferred Securities, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Guarantee Trustee shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts
or to exercise any such right, power, duty or obligation. No permissive power
or authority available to the Preferred Guarantee Trustee shall be construed to
be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Preferred Guarantee Trustee does not
assume any responsibility for their correctness. The Preferred Guarantee
Trustee makes no representation as to the validity or sufficiency of this
Preferred Securities Guarantee.
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ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
(a) There shall at all times be a Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under
the laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or Person
permitted by the Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act, authorized under
such laws to exercise corporate trust powers, having a combined
capital and surplus of at least 50 million U.S. dollars ($50,000,000),
and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or
to the requirements of the supervising or examining authority referred
to above, then, for the purposes of this Section 4.1(a)(ii), the
combined capital and surplus of such corporation shall be deemed to be
its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Preferred Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Guarantee Trustees
(a) Subject to Section 4.2(b), the Preferred Guarantee
Trustee may be appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed
in accordance with Section 4.2(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.
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(c) The Preferred Guarantee Trustee appointed to office
shall hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such
appointment by instrument in writing executed by such Successor Preferred
Guarantee Trustee and delivered to the Guarantor and the resigning Preferred
Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall
have been appointed and accepted appointment as provided in this Section 4.2
within 60 days after delivery to the Guarantor of an instrument of resignation,
the resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.
(e) No Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee
all amounts accrued to the date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any
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right to require a proceeding first against the Issuer or any other Person
before proceeding against the Guarantor, protest, notice of nonpayment, notice
of dishonor, notice of redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Preferred Securities Guarantee shall in no way be affected
or impaired by reason of the happening from time to time of any of the
following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer
of all or any portion of the Distributions, Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities (other
than an extension of time for payment of Distributions, Redemption Price,
Liquidation Distribution or other sum payable that results from the extension
of any interest payment period on the Debentures or any extension of the
maturity date of 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 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
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a guarantor, it being the intent of this Section 5.3 that the obligations of
the Guarantor hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Preferred Securities have the right to direct the time, method and place of
conducting of any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.
(b) Notwithstanding the foregoing, any Holder of
Preferred Securities may institute a legal proceeding directly against the
Guarantor to enforce its rights under this Preferred Securities Guarantee,
without first instituting a legal proceeding against the Issuer, the Preferred
Guarantee Trustee or any other Person.
SECTION 5.5 Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee of
payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Preferred Securities against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the
extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under
this Preferred Securities Guarantee, if, at the time of any such payment, any
amounts are due and unpaid under this Preferred Securities Guarantee. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect
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to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Preferred Securities remain outstanding, if
there shall have occurred an Event of Default or an event of default under the
Declaration, then (a) the Guarantor shall not declare or pay any dividend on,
make any distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock, (b) the
Guarantor shall not make any payment of interest, principal or premium, if any,
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor which rank pari passu with or junior to the Debentures
or (c) the Guarantor shall not make any guarantee payments with respect to the
foregoing (other than pursuant to the Preferred Securities Guarantee
Agreement); provided, however, the Guarantor may (i) declare and pay a stock
dividend where the dividend stock is the same stock as that on which the
dividend is being paid and (ii) repurchase its common stock from The Paul
Revere Corporation ("Paul Revere") or its subsidiaries pursuant to the
Agreement to Purchase Stock, dated as of April 12, 1990, by and among the
Guarantor and The Paul Revere Insurance Company, The Paul Revere Protective
Life Insurance Company and The Paul Revere Variable Annuity Insurance Company
and the Stock Purchase Agreement, dated as of September 23, 1993, between the
Guarantor and Paul Revere.
SECTION 6.2 Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor and with any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any Affiliate of
the Guarantor, and (iii) senior to the Guarantor's common stock.
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ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Preferred Securities Guarantee shall terminate upon (i)
full payment of the Redemption Price of all Preferred Securities, (ii) upon the
distribution of the Debentures to the Holders of all of the Preferred
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon liquidation of the Issuer. Notwithstanding the foregoing,
this Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except
that an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Preferred Securities
might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any loss, liability or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against, or investigating, any
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claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Preferred Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Preferred
Securities Guarantee shall bind the successors, assigns, receivers, trustees
and representatives of the Guarantor and shall inure to the benefit of the
Holders of the Preferred Securities then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section 12.2 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The Chase Manhattan Bank, N.A.
4 Chase MetroTech Center
Brooklyn, New York 11245
Attention:
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
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Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Attention: Executive Vice President and General Counsel
(c) If given to any Holder of Preferred 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 9.4 Benefit
This Preferred Securities Guarantee is solely for the benefit
of the Holders of the Preferred Securities and, subject to Section 3.1(a), is
not separately transferable from the Preferred Securities.
SECTION 9.5 Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
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THIS PREFERRED SECURITIES GUARANTEE is executed as of the day
and year first above written.
TEXTRON INC., as Guarantor
By:
----------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, N.A., as
Preferred Guarantee Trustee
By:
----------------------------
Name:
Title:
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Exhibit 5(a)
January 17, 1996
Textron Inc. 40 Westminster Street
Providence, Rhode Island 02903
(401) 421-2800
Textron Capital I
Textron Capital II
Textron Capital III
Textron Finance, L.P.
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Re: Textron Inc;
Textron Capital I;
Textron Capital II;
Textron Capital III;
Textron Finance, L.P.
Registration Statement on Form S-3
(Registration No. 33-63227)
----------------------------------
Ladies and Gentlemen:
I am Assistant General Counsel-Corporate and Assistant Secretary of
Textron Inc., a corporation organized under the laws of the State of Delaware
(the "Company"). I have acted as counsel to Textron Capital I, Textron Capital
II and Textron Capital III (each, a "Textron Trust" and, together, the "Textron
Trusts"), each a statutory business trust formed under the laws of the State of
Delaware, Textron Finance, L.P. (the "Textron Partnership"), a limited
partnership formed under the laws of the State of Delaware, and the Company in
connection with the preparation of a Registration Statement on Form S-3
(Registration No. 33-63227), filed by the Company, the Textron Trusts and the
Textron Partnership with the Securities and Exchange Commission (the
"Commission") on October 5, 1995 under
<PAGE> 2
Textron Inc.
January 17, 1996
Page 2
the Securities Act of 1933, as amended (the "Act"), Amendment No. 1 thereto,
filed with the Commission on October 26, 1995, and Amendment No. 2 thereto,
filed with the Commission on January 16, 1996 (such Registration Statement,
as so amended, being hereinafter referred to as the "Registration Statement"),
in connection with the public offering of the unsecured senior debt securities
(the "Senior Debt Securities"), the unsecured subordinated debt securities (the
"Subordinated Debt Securities") and the unsecured junior subordinated debt
securities (the "Junior Subordinated Debt Securities"), in each case of the
Company (each a "Debt Security" and, collectively, the "Debt Securities"), the
preferred securities (the "Trust Preferred Securities") of each of the Textron
Trusts, the preferred securities (the "Partnership Preferred Securities") of the
Textron Partnership, the respective guarantees by the Company for the benefit of
the holders of the Trust Preferred Securities (each a "Trust Guarantee" and,
collectively, the "Trust Guarantees") and the guarantee by the Company for the
benefit of the holders of the Partnership Preferred Securities (the "Partnership
Guarantee").
The Senior Debt Securities may be issued under an Indenture, dated as
of April 15, 1987, between the Company and Chemical Bank (as successor to
Manufacturers Hanover Trust Company), as trustee (the "Senior Debt Trustee"), as
supplemented by the First Supplemental Senior Indenture, dated as of March 15,
1988, and the Second Supplemental Senior Indenture to be entered into by the
Company and the Senior Debt Trustee (as so supplemented, the "Senior Debt
Indenture").
The Subordinated Debt Securities may be issued under an Indenture,
dated as of May 1, 1985, between the Company and The Chase Manhattan Bank, N.A.,
as trustee (the "Subordinated Debt Trustee"), as supplemented by the First
Supplemental Subordinated Indenture, dated as of December 18, 1986, and the
Second Supplemental Subordinated Indenture to be entered into by the Company and
the
<PAGE> 3
Textron Inc.
January 17, 1996
Page 3
Subordinated Debt Trustee (as so supplemented, the "Subordinated Debt
Indenture").
The Junior Subordinated Debt Securities may be issued under an
Indenture (the "Junior Subordinated Debt Indenture") to be entered into by the
Company and The Chase Manhattan Bank, N.A., as trustee (the "Junior Subordinated
Debt Trustee").
The Trust Preferred Securities of each Textron Trust are to be issued
pursuant to the Amended and Restated Declaration of Trust of such Textron Trust
(each, a "Declaration" and collectively, the "Declarations"), each such
Declaration being among the Company, as sponsor and as the issuer of certain
debentures to be held by the institutional trustee, The Chase Manhattan Bank,
N.A., as the institutional trustee (the "Institutional Trustee"), The Chase
Manhattan Bank (USA), as Delaware trustee (the "Delaware Trustee"), and Richard
A. Watson and Gregory E. Hudson, as regular trustees (together, the "Regular
Trustees").
The Partnership Preferred Securities are to be issued pursuant to the
Amended and Restated Agreement of Limited Partnership of the Textron
Partnership (the "Partnership Agreement"), between the Company, as general
partner (the "General Partner"), and Textron Holdings, Inc., a wholly owned
subsidiary of the Company, as the initial limited partner.
The Trust Guarantees relate to the payment of periodic cash
distributions and payments on liquidation, redemption or otherwise, with respect
to each of the Trust Preferred Securities. The Chase Manhattan Bank, N.A. will
act as indenture trustee under each Trust Guarantee (the "Trust Guarantee
Trustee").
The Partnership Guarantee relates to the payment of periodic cash
distributions and payments on liquidation, redemption or otherwise, with respect
to the Partnership Preferred Securities. The Chase Manhattan Bank, N.A. will act
as indenture trustee under the Partnership Guarantee (the "Partnership Guarantee
Trustee").
<PAGE> 4
Textron Inc.
January 17, 1996
Page 4
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the Registration
Statement.
In connection with this opinion, I have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate
of trust of each of the Textron Trusts (the "Certificates of Trust") filed with
the Secretary of State of the State of Delaware on October 4, 1995 and included
as exhibits to the Registration Statement; (ii) the form of the Declaration of
each of the Textron Trusts (including the designations of the terms of the
Trust Preferred Securities of such Textron Trust annexed thereto) included as
an exhibit to the Registration Statement; (iii) the form of the Trust Preferred
Securities of each of the Textron Trusts included as an exhibit to the
Registration Statement; (iv) the certificate of limited partnership (the
"Certificate of Limited Partnership") of the Textron Partnership filed with the
Secretary of State of the State of Delaware on October 4, 1995 and included as
an exhibit to the Registration Statement; (v) the form of the Partnership
Agreement of the Textron Partnership included as an exhibit to the Registration
Statement; (vi) the form of the Partnership Preferred Securities included as an
exhibit to the Registration Statement; (vii) the form of Prospectus Supplement
("Prospectus Supplement") relating to the Trust Preferred Securities included
as an exhibit to the Registration Statement; (viii) the respective forms of the
Debt Securities included as exhibits to the Registration Statement; (ix) the
forms of the Senior Debt Indenture, the Subordinated Debt Indenture and the
Junior Subordinated Debt Indenture (collectively, the "Debt Securities
Indentures") included as exhibits to the Registration Statement; and (x) the
respective forms of the Trust Guarantees and Partnership Guarantee included as
exhibits to the Registration Statement. I have also examined the originals or
copies, certified or otherwise identified to my satisfaction, of the corporate
charter and by-laws, each as currently in effect, of the Company, pertinent
resolutions of the Company's board of directors and committees thereof and all
such other records of the
<PAGE> 5
Textron Inc.
January 17, 1996
Page 5
Company and all such agreements, certificates of public officials, certificates
of officers or representatives of the Company and others and such other
documents, certificates and records as I have deemed necessary or appropriate as
a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to me as originals, the conformity to original documents of all
documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. In making my examination of
documents executed by parties other than the Company, the Textron Trusts and
the Textron Partnership, I have assumed that such parties had the power,
corporate or other, to enter into and perform all obligations thereunder and
have also assumed the due authorization by all requisite action, corporate or
other, and execution and delivery by such parties of such documents and that
such documents constitute valid and binding obligations of such parties. In
addition, I have assumed that the Declaration of each Textron Trust and the
Partnership Agreement, when executed, will be executed in substantially the
form reviewed by me. As to any facts material to the opinions expressed herein
which were not independently established or verified, I have relied upon oral
or written statements and representations of officers, trustees and other
representatives of the Company, the Textron Trusts, the Textron Partnership
and others.
I am admitted to the bar in the States of New York and Rhode Island,
and I express no opinion as to the laws of any jurisdiction other than such
states, the laws of the United States of America to the extent specifically
referred to herein and the General Corporation Law of the State of Delaware.
Based on and subject to the foregoing and to the other qualifications
and limitations set forth herein, I am of the opinion that:
<PAGE> 6
Textron Inc.
January 17, 1996
Page 6
1. Each of the Senior Debt Securities, the Subordinated Debt
Securities, and the Junior Subordinated Debt Securities, when (a) the
Registration Statement has become effective under the Act, (b) their respective
Debt Securities Indentures have been duly authorized, executed and delivered,
(c) the respective terms of the Debt Securities and of their issuance and sale
have been duly established in conformity with their respective Debt Securities
Indentures so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Company and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over the Company, and (d) the Debt Securities have been
duly executed, delivered, authenticated and issued in accordance with their
respective Debt Securities Indentures and paid for and sold as contemplated in
the Prospectus Supplement, will be valid and binding obligations of the
Company, entitled to the benefits of their respective Indentures and enforceable
against the Company in accordance with their respective terms, except to the
extent that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
2. The Trust Guarantees, when (a) the Registration Statement has
become effective under the Act, (b) the Trust Preferred Securities to which the
respective Trust Guarantee relates have been established in conformity with the
applicable Declaration so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon such Textron
Trust and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over such Textron Trust, and (c)
such Trust Guarantees have been duly executed and delivered by the Company and
the Trust Guarantee Trustee and do not violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Company
and complies with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Company, will be valid and
binding agreements of the Company, enforceable against the Company in accordance
with their terms, except to the extent that enforcement thereof may be limited
by (i) bankrupt-
<PAGE> 7
Textron Inc.
January 17, 1996
Page 7
cy, insolvency, reorganization, moratorium, or other similar laws now or
hereafter in effect relating to creditors's rights generally and (ii) general
principles of equity (regardless of whether enforceability is considered in a
proceeding at law or in equity).
3. The Partnership Guarantee, when (a) the Registration Statement has
become effective under the Act, (b) the Partnership Preferred Securities to
which the Partnership Guarantee relates have been established in conformity with
the Partnership Agreement so as not to violate any applicable law or result in a
default under or breach of any agreement or instrument binding upon the Textron
Partnership and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over the Textron Partnership,
and (c) such Partnership Guarantee has been duly executed and delivered by the
Company and the Partnership Guarantee Trustee and does not violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon the Company and complies with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
the Company, will be the valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in effect
relating to creditors's rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity).
This opinion is furnished to you solely for your benefit in connection
with the filing of the Registration Statement and, except as set forth below, is
not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person for any purpose without my prior
written consent. I hereby consent to the filing of this opinion with the
Commission as Exhibit 5(a) to the Registration Statement. I also hereby consent
to the use of my name under the heading "Legal Matters" in the Prospectus
Supplement. In giving this consent, I do not thereby admit that I am within the
category of persons whose consent is required under Section 7 of the Act or the
rules and regulations of the Commission promulgated thereunder. This opinion is
expressed as of the date hereof unless otherwise
<PAGE> 8
Textron Inc.
January 17, 1996
Page 8
expressly stated and I disclaim any undertaking to advise you of any subsequent
changes of the facts stated or assumed herein or any subsequent changes in
applicable law.
Very truly yours,
/s/ Michael D. Cahn
Michael D. Cahn
Assistant General Counsel-Corporate
and Assistant Secretary
<PAGE> 1
Exhibit 5(b)
January 17, 1996
Skadden, Arps, Slate,
Meagher & Flom
One Beacon Street
Boston, Massachusetts 02108
Telephone (617) 573-4800
Textron Capital I
Textron Capital II
Textron Capital III
Textron Finance, L.P.
c/o Textron Inc.
40 Westminster Street
Providence, Rhode Island 02903
Re: Textron Inc;
Textron Capital I;
Textron Capital II;
Textron Capital III;
Textron Finance, L.P.
Registration Statement on Form S-3
(Registration No. 33-63227)
----------------------------------
Ladies and Gentlemen:
We have acted as special counsel to (1) Textron Capital I, Textron
Capital II and Textron Capital III (each, a "Textron Trust" and, together, the
"Textron Trusts"), each a statutory business trust formed under the laws of the
State of Delaware, (2) Textron Finance, L.P. (the "Textron Partnership"), a
limited partnership formed under the laws of the State of Delaware, and (3)
Textron Inc. (the "Company"), a corporation organized under the laws of the
State of Delaware, in connection with the preparation of a Registration
Statement on Form S-3 (Registration No. 33-63227), filed by the Company, the
Textron Trusts and the Textron Partnership with the Securities and Exchange
Commission (the "Commission") on October 5, 1995 under the Securities Act of
1933, as amended (the "Act"),
<PAGE> 2
Textron Inc.
January 17, 1996
Page 2
Amendment No. 1 thereto, filed with the Commission on October 26, 1995, and
Amendment No. 2 thereto, filed with the Commission on January 16, 1996 (such
Registration Statement, as so amended, being hereinafter referred to as the
"Registration Statement"), in connection with the public offering of preferred
securities (the "Trust Preferred Securities") of each of the Textron Trusts,
preferred securities (the "Partnership Preferred Securities") of the Textron
Partnership, and certain other securities.
The Trust Preferred Securities of each Textron Trust are to be issued
pursuant to the Amended and Restated Declaration of Trust of such Textron Trust
(each, a "Declaration" and collectively, the "Declarations"), each such
Declaration being among the Company, as sponsor and as the issuer of certain
debentures to be held by the institutional trustee, The Chase Manhattan Bank,
N.A., as the institutional trustee (the "Institutional Trustee"), The Chase
Manhattan Bank (USA), as Delaware trustee (the "Delaware Trustee"), and Richard
A. Watson and Gregory E. Hudson, as regular trustees (together, the "Regular
Trustees").
The Partnership Preferred Securities are to be issued pursuant to the
Amended and Restated Agreement of Limited Partnership of the Textron
Partnership (the "Partnership Agreement"), between the Company, as general
partner (the "General Partner"), and Textron Holdings, Inc., a wholly owned
subsidiary of the Company, as the initial limited partner.
This opinion is being delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Act. Capitalized terms used but not
otherwise defined herein have the meanings ascribed to them in the
Registration Statement.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the certificate
of trust of each of the Textron Trusts (the "Certificates of Trust") filed with
the Secretary of State of the State of Delaware on October 4, 1995 and included
as exhibits to
<PAGE> 3
Textron Inc.
January 17, 1996
Page 3
the Registration Statement; (ii) the form of the Declaration of each of
the Textron Trusts (including the designations of the terms of the Trust
Preferred Securities of such Textron Trust annexed thereto) included as an
exhibit to the Registration Statement; (iii) the form of the Trust Preferred
Securities of each of the Textron Trusts included as an exhibit to the
Registration Statement; (iv) the certificate of limited partnership (the
"Certificate of Limited Partnership") of the Textron Partnership filed with the
Secretary of State of the State of Delaware on October 4, 1995 and included as
an exhibit to the Registration Statement; (v) the form of the Partnership
Agreement of the Textron Partnership included as an exhibit to the Registration
Statement; (vi) the form of the Partnership Preferred Securities included as an
exhibit to the Registration Statement; and (vii) the form of Prospectus
Supplement ("Prospectus Supplement") relating to the Trust Preferred Securities
included as an exhibit to the Registration Statement. We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Textron Trusts and the Textron
Partnership, we have assumed that such parties had the power, corporate or
other, to enter into and perform all obligations thereunder and have also
assumed the due authorization by all requisite action, corporate or other, and
execution and delivery by such parties of such documents and that such
documents constitute valid and binding obligations of such parties. In
addition, we have assumed that the Declaration of each Textron Trust and the
Partnership Agreement, when executed, will be executed in substantially the
form reviewed by us. As to any facts material to the opinions expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representa-
<PAGE> 4
Textron Inc.
January 17, 1996
Page 4
tions of officers, trustees and other representatives of the Company, the
Textron Trusts, the Textron Partnership and others.
With respect to our opinion set forth in paragraph 2 below, we have
assumed that, except for the exercise of rights and powers expressly permitted
by the Partnership Agreement, the holders of Partnership Preferred Securities
will not participate in the control of the business of the Textron Partnership.
Members of our firm are admitted to the bar in the State of Delaware,
and we express no opinion as to the laws of any other jurisdiction.
Based on and subject to the foregoing and to the other qualifications
and limitations set forth herein, we are of the opinion that:
1. The Trust Preferred Securities of each Textron Trust, when the
Declaration of such Textron Trust is executed and delivered by the parties
thereto, will be duly authorized for issuance and, when issued and executed in
accordance with such Declaration and delivered and paid for as contemplated by
the Prospectus Supplement, will be validly issued, fully paid and
nonassessable, representing undivided beneficial interests in the assets of
such Textron Trust; and the holders of such Trust Preferred Securities will be
entitled to the same limitation of personal liability extended to stockholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware. We bring to your attention, however, that the
holders of Trust Preferred Securities of each Textron Trust may be obligated,
pursuant to the Declaration of such Textron Trust, to (i) provide indemnity
and/or security in connection with and pay
<PAGE> 5
Textron Inc.
January 17, 1996
Page 5
Taxes or governmental charges arising from transfers of Trust Preferred
Securities and (ii) provide security and indemnity in connection with the
requests of or directions to the Institutional Trustee of such Textron Trust
to exercise its rights and powers under the Declaration of such Textron Trust.
2. When the Partnership Agreement is executed and delivered by the
parties thereto and when the Partnership Preferred Securities are issued,
executed, delivered and paid for in accordance with the Partnership Agreement,
the holders of Partnership Preferred Securities, as limited partners of the
Textron Partnership, will not be liable to third parties for the obligations of
the Textron Partnership.
<PAGE> 6
Textron Inc.
January 17, 1996
Page 6
This opinion is furnished to you solely for your benefit in connection
with the filing of the Registration Statement and, except as set forth below, is
not to be used, circulated, quoted or otherwise referred to for any other
purpose or relied upon by any other person for any purpose without our prior
written consent. We hereby consent to the use of our name under the heading
"Legal Matters" in the Prospectus Supplement. We also hereby consent to the
filing of this opinion with the Commission as an exhibit to the Registration
Statement. In giving this consent, we do not thereby admit that we are within
the category of persons whose consent is required under Section 7 of the Act or
the rules and regulations of the Commission promulgated thereunder. This opinion
is expressed as of the date hereof unless otherwise expressly stated and we
disclaim any undertaking to advise you of any subsequent changes of the facts
stated or assumed herein or any subsequent changes in applicable law.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom
<PAGE> 1
Exhibit 23(a)
CONSENT OF INDEPENDENT AUDITORS
We consent to the references to our firm under the captions "Experts" and
"Summary Financial Data" in Amendment No. 2 to the Registration Statement (Form
S-3 No. 33-63227) and related Prospectus and Prospectus Supplement of Textron
Inc. for the registration of Senior Debt Securities, Subordinated Debt
Securities and Junior Subordinated Debt Securities of Textron Inc. and Preferred
Securities of Textron Capital I, II and III and Textron Finance, L.P. and to the
incorporation by reference therein of our report dated February 2, 1995 with
respect to the consolidated financial statements of Textron Inc. incorporated by
reference in its Annual Report (Form 10-K) for the year ended December 31, 1994
and our report dated March 24, 1995 on the financial statement schedules of
Textron Inc. included therein filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
January 16, 1996
<PAGE> 1
Exhibit 24(a)
POWER OF ATTORNEY
The undersigned officer of Textron Inc. ("Textron"), a Delaware corporation,
does hereby constitute and appoint Wayne W. Juchatz, Arnold M. Friedman and
Michael D. Cahn and each of them, with full powers of substitution, his true and
lawful attorneys and agents to do or cause to be done any and all acts and
things and to execute and deliver any and all instruments and documents which
said attorneys and agents, or any of them, may deem necessary or advisable in
order to enable Textron to comply with the Securities Act of 1933, as amended,
and any requirements of the Securities and Exchange Commission in respect
thereof, in connection with the Registration under the Securities Act of 1933,
as amended, of the offering of up to (i) $800 million additional debt securities
of Textron and (ii) preferred securities of Textron Capital I, Textron Capital
II, Textron Capital III and Textron Finance, L.P. and the guarantee thereof by
Textron, including specifically, but without limitation, power and authority to
sign the name of the undersigned officer in the capacity indicated below to any
and all amendments to the Registration Statement previously filed with the
Securities and Exchange Commission in respect of such offering (including
post-effective amendments), and to any instruments or documents or other
writings of which the original or copies thereof are to be filed as a part of or
in connection with such Registration Statement or amendments thereto, and to
file or cause to be filed the same with the Securities and Exchange Commission;
and the undersigned hereby ratifies and confirms all that such attorneys and
agents, and each of them, shall do or cause to be done hereunder, and such
attorneys and agents, and each of them, shall have, and may exercise, all of
the powers hereby conferred.
IN WITNESS WHEREOF, the undersigned has signed his name hereto on this 8th day
of November 1995.
/s/ Richard L. Yates
------------------------------
Richard L. Yates
Vice President and Controller
(principal accounting officer)
<PAGE> 1
EXHIBIT 25(c)
Securities Act of 1933 File No.__________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
_______________
TEXTRON INC.
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
05-0315468
(I.R.S. Employer Identification No.)
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND
(Address of principal executive offices)
02903
(Zip Code)
____________________________
GUARANTEE OF PREFERRED SECURITIES
JUNIOR SUBORDINATED DEBT SECURITIES
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control
with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect. (See Exhibit T-1 (Item 12), Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan
Bank (National Association) and The Chase Bank of New York
(National Association) to commence business and a copy of
approval of merger of said corporations, all of which documents
are still in effect. (See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers, both
of which documents are still in effect. (See Exhibit T-1
(Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 12(a)), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor
is in default. (Not applicable).
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference. Following
the description of such Exhibits is a reference to the copy of the Exhibit
heretofore filed with the Securities and Exchange Commission, to which there
have been no amendments or changes.
___________________
1.
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized , all in the City of New York, and the
State of New York, on the 16th day of January, 1996
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ RONALD J. HALLERAN
-----------------------------------
RONALD J. HALLERAN,
SECOND VICE PRESIDENT
_________________
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on
September 30, 1995, published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,081,000
Interest-bearing balances 5,957,000
Held to maturity securities 1,678,000
Available-for-sale securities 5,303,000
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 1,806,000
Securities purchased under agreements to resell 23,000
Loans and lease financing receivable:
Loans and leases, net of unearned income $55,682,000
LESS: Allowance for loan and lease losses 1,112,000
LESS: Allocated transfer risk reserve 0
-----------
Loans and leases, net of unearned income, allowance, and reserve 54,570,000
Assets held in trading accounts 12,551,000
Premises and fixed assets (including capitalized leases) 1,755,000
Other real estate owned 400,000
Investments in unconsolidated subsidiaries and associated companies 30,000
Customers' liability to this bank on acceptances outstanding 1,091,000
Intangible assets 1,344,000
Other assets 6,322,000
-----------
TOTAL ASSETS $97,911,000
===========
LIABILITIES
Deposits:
In domestic offices $31,007,000
Noninterest-bearing $12,166,000
Interest-bearing
18,841,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 36,015,000
Noninterest-bearing
$ 3,258,000
Interest-bearing
32,757,000
-----------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 1,673,000
Securities sold under agreements to repurchase 233,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,105,000
Other borrowed money:
With original maturity of one year or less 2,783,000
With original maturity of more than one year 395,000
Mortgage indebtedness and obligations under capitalized leases 40,000
Bank's liability on acceptances executed and outstanding 1,100,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,747,000
-----------
TOTAL LIABILITIES 90,083,000
-----------
Limited-life preferred stock and related surplus 0
Perpetual preferred stock and related surplus 0
Common stock 921,000
Surplus 5,244,000
Undivided profits and capital reserves 1,695,000
Net unrealized holding gains (losses) on available-for-sale securities (43,000)
Cumulative foreign currency translation adjustments 11,000
-----------
TOTAL EQUITY CAPITAL 7,828,000
-----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $97,911,000
===========
</TABLE>
<PAGE> 5
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
/s/ Lester J. Stephens
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
/s/ Thomas G. Labrecque
/s/ Arthur F. Ryan Directors
/s/ Richard J. Boyle
<PAGE> 1
EXHIBIT 25(d)
Securities Act of 1933 File No.__________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
_______________
TEXTRON CAPITAL I
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
05-6110105
(I.R.S. Employer Identification No.)
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND
(Address of principal executive offices)
02903
(Zip Code)
____________________________
PREFERRED SECURITIES
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control
with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect. (See Exhibit T-1 (Item 12), Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan
Bank (National Association) and The Chase Bank of New York
(National Association) to commence business and a copy of
approval of merger of said corporations, all of which documents
are still in effect. (See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers, both
of which documents are still in effect. (See Exhibit T-1
(Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 12(a)), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor
is in default. (Not applicable).
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference. Following
the description of such Exhibits is a reference to the copy of the Exhibit
heretofore filed with the Securities and Exchange Commission, to which there
have been no amendments or changes.
___________________
1.
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized , all in the City of New York, and the
State of New York, on the 16th day of January, 1996
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ RONALD J. HALLERAN
-----------------------------------
RONALD J. HALLERAN,
SECOND VICE PRESIDENT
_________________
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on
September 30, 1995, published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,081,000
Interest-bearing balances 5,957,000
Held to maturity securities 1,678,000
Available-for-sale securities 5,303,000
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 1,806,000
Securities purchased under agreements to resell 23,000
Loans and lease financing receivable:
Loans and leases, net of unearned income $55,682,000
LESS: Allowance for loan and lease losses 1,112,000
LESS: Allocated transfer risk reserve 0
-----------
Loans and leases, net of unearned income, allowance, and reserve 54,570,000
Assets held in trading accounts 12,551,000
Premises and fixed assets (including capitalized leases) 1,755,000
Other real estate owned 400,000
Investments in unconsolidated subsidiaries and associated companies 30,000
Customers' liability to this bank on acceptances outstanding 1,091,000
Intangible assets 1,344,000
Other assets 6,322,000
-----------
TOTAL ASSETS $97,911,000
===========
LIABILITIES
Deposits:
In domestic offices $31,007,000
Noninterest-bearing $12,166,000
Interest-bearing
18,841,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 36,015,000
Noninterest-bearing
$ 3,258,000
Interest-bearing
32,757,000
-----------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 1,673,000
Securities sold under agreements to repurchase 233,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,105,000
Other borrowed money:
With original maturity of one year or less 2,783,000
With original maturity of more than one year 395,000
Mortgage indebtedness and obligations under capitalized leases 40,000
Bank's liability on acceptances executed and outstanding 1,100,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,747,000
-----------
TOTAL LIABILITIES 90,083,000
-----------
Limited-life preferred stock and related surplus 0
Perpetual preferred stock and related surplus 0
Common stock 921,000
Surplus 5,244,000
Undivided profits and capital reserves 1,695,000
Net unrealized holding gains (losses) on available-for-sale securities (43,000)
Cumulative foreign currency translation adjustments 11,000
-----------
TOTAL EQUITY CAPITAL 7,828,000
-----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $97,911,000
===========
</TABLE>
<PAGE> 5
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
/s/ Lester J. Stephens
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
/s/ Thomas G. Labrecque
/s/ Arthur F. Ryan Directors
/s/ Richard J. Boyle
<PAGE> 1
EXHIBIT 25(e)
Securities Act of 1933 File No.__________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
_______________
TEXTRON CAPITAL II
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
05-6110106
(I.R.S. Employer Identification No.)
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND
(Address of principal executive offices)
02903
(Zip Code)
____________________________
PREFERRED SECURITIES
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control
with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect. (See Exhibit T-1 (Item 12), Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan
Bank (National Association) and The Chase Bank of New York
(National Association) to commence business and a copy of
approval of merger of said corporations, all of which documents
are still in effect. (See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers, both
of which documents are still in effect. (See Exhibit T-1
(Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 12(a)), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor
is in default. (Not applicable).
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference. Following
the description of such Exhibits is a reference to the copy of the Exhibit
heretofore filed with the Securities and Exchange Commission, to which there
have been no amendments or changes.
___________________
1.
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized , all in the City of New York, and the
State of New York, on the 16th day of January, 1996
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ RONALD J. HALLERAN
-----------------------------------
RONALD J. HALLERAN,
SECOND VICE PRESIDENT
_________________
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on
September 30, 1995, published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,081,000
Interest-bearing balances 5,957,000
Held to maturity securities 1,678,000
Available-for-sale securities 5,303,000
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 1,806,000
Securities purchased under agreements to resell 23,000
Loans and lease financing receivable:
Loans and leases, net of unearned income $55,682,000
LESS: Allowance for loan and lease losses 1,112,000
LESS: Allocated transfer risk reserve 0
-----------
Loans and leases, net of unearned income, allowance, and reserve 54,570,000
Assets held in trading accounts 12,551,000
Premises and fixed assets (including capitalized leases) 1,755,000
Other real estate owned 400,000
Investments in unconsolidated subsidiaries and associated companies 30,000
Customers' liability to this bank on acceptances outstanding 1,091,000
Intangible assets 1,344,000
Other assets 6,322,000
-----------
TOTAL ASSETS $97,911,000
===========
LIABILITIES
Deposits:
In domestic offices $31,007,000
Noninterest-bearing $12,166,000
Interest-bearing
18,841,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 36,015,000
Noninterest-bearing
$ 3,258,000
Interest-bearing
32,757,000
-----------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 1,673,000
Securities sold under agreements to repurchase 233,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,105,000
Other borrowed money:
With original maturity of one year or less 2,783,000
With original maturity of more than one year 395,000
Mortgage indebtedness and obligations under capitalized leases 40,000
Bank's liability on acceptances executed and outstanding 1,100,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,747,000
-----------
TOTAL LIABILITIES 90,083,000
-----------
Limited-life preferred stock and related surplus 0
Perpetual preferred stock and related surplus 0
Common stock 921,000
Surplus 5,244,000
Undivided profits and capital reserves 1,695,000
Net unrealized holding gains (losses) on available-for-sale securities (43,000)
Cumulative foreign currency translation adjustments 11,000
-----------
TOTAL EQUITY CAPITAL 7,828,000
-----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $97,911,000
===========
</TABLE>
<PAGE> 5
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
/s/ Lester J. Stephens
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
/s/ Thomas G. Labrecque
/s/ Arthur F. Ryan Directors
/s/ Richard J. Boyle
<PAGE> 1
EXHIBIT 25(f)
Securities Act of 1933 File No.__________
(If application to determine eligibility of trustee
for delayed offering pursuant to Section 305 (b) (2))
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________________
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)___________
__________________
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
(Exact name of trustee as specified in its charter)
13-2633612
(I.R.S. Employer Identification Number)
1 CHASE MANHATTAN PLAZA, NEW YORK, NEW YORK
(Address of principal executive offices)
10081
(Zip Code)
_______________
TEXTRON CAPITAL III
(Exact name of obligor as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation or organization)
05-6110107
(I.R.S. Employer Identification No.)
40 WESTMINSTER STREET
PROVIDENCE, RHODE ISLAND
(Address of principal executive offices)
02903
(Zip Code)
____________________________
PREFERRED SECURITIES
(Title of the indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
Comptroller of the Currency, Washington, D.C.
Board of Governors of The Federal Reserve System,
Washington, D. C.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The Trustee is not the obligor, nor is the Trustee directly or
indirectly controlling, controlled by, or under common control
with the obligor.
(See Note on Page 2.)
ITEM 16. LIST OF EXHIBITS.
List below all exhibits filed as a part of this statement of
eligibility.
*1. -- A copy of the articles of association of the trustee as now in
effect. (See Exhibit T-1 (Item 12), Registration No. 33-55626.)
*2. -- Copies of the respective authorizations of The Chase Manhattan
Bank (National Association) and The Chase Bank of New York
(National Association) to commence business and a copy of
approval of merger of said corporations, all of which documents
are still in effect. (See Exhibit T-1 (Item 12), Registration
No. 2-67437.)
*3. -- Copies of authorizations of The Chase Manhattan Bank
(National Association) to exercise corporate trust powers, both
of which documents are still in effect. (See Exhibit T-1
(Item 12), Registration No. 2-67437).
*4. -- A copy of the existing by-laws of the trustee. (See Exhibit T-1
(Item 12(a)), Registration No. 33-60809.)
*5. -- A copy of each indenture referred to in Item 4, if the obligor
is in default. (Not applicable).
*6. -- The consents of United States institutional trustees required by
Section 321(b) of the Act. (See Exhibit T-1, (Item 12),
Registration No. 22-19019.)
7. -- A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
___________________
*The Exhibits thus designated are incorporated herein by reference. Following
the description of such Exhibits is a reference to the copy of the Exhibit
heretofore filed with the Securities and Exchange Commission, to which there
have been no amendments or changes.
___________________
1.
<PAGE> 3
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base a responsive answer to Item 2 the answer
to said Item is based on incomplete information.
Item 2 may, however, be considered as correct unless amended by an
amendment to this Form T-1.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, The Chase Manhattan Bank (National Association), a corporation
organized and existing under the laws of the United States of America, has duly
caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized , all in the City of New York, and the
State of New York, on the 16th day of January, 1996
THE CHASE MANHATTAN BANK
(NATIONAL ASSOCIATION)
By: /s/ RONALD J. HALLERAN
-----------------------------------
RONALD J. HALLERAN,
SECOND VICE PRESIDENT
_________________
2
<PAGE> 4
EXHIBIT 7
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the
THE CHASE MANHATTAN BANK, N.A.
of New York in the State of New York, at the close of business on
September 30, 1995, published in response to call made by Comptroller of the
Currency, under title 12, United States Code, Section 161.
<TABLE>
<CAPTION>
CHARTER NUMBER 2370 COMPTROLLER OF THE CURRENCY NORTHEASTERN DISTRICT
STATEMENT OF RESOURCES AND LIABILITIES
ASSETS THOUSANDS
OF DOLLARS
<S> <C> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin $ 5,081,000
Interest-bearing balances 5,957,000
Held to maturity securities 1,678,000
Available-for-sale securities 5,303,000
Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold 1,806,000
Securities purchased under agreements to resell 23,000
Loans and lease financing receivable:
Loans and leases, net of unearned income $55,682,000
LESS: Allowance for loan and lease losses 1,112,000
LESS: Allocated transfer risk reserve 0
-----------
Loans and leases, net of unearned income, allowance, and reserve 54,570,000
Assets held in trading accounts 12,551,000
Premises and fixed assets (including capitalized leases) 1,755,000
Other real estate owned 400,000
Investments in unconsolidated subsidiaries and associated companies 30,000
Customers' liability to this bank on acceptances outstanding 1,091,000
Intangible assets 1,344,000
Other assets 6,322,000
-----------
TOTAL ASSETS $97,911,000
===========
LIABILITIES
Deposits:
In domestic offices $31,007,000
Noninterest-bearing $12,166,000
Interest-bearing
18,841,000
-----------
In foreign offices, Edge and Agreement subsidiaries, and IBFs 36,015,000
Noninterest-bearing
$ 3,258,000
Interest-bearing
32,757,000
-----------
Federal funds purchased and securities sold under agreements to
repurchase in domestic offices of the bank and of its Edge and
Agreement subsidiaries, and in IBFs:
Federal funds purchased 1,673,000
Securities sold under agreements to repurchase 233,000
Demand notes issued to the U.S. Treasury 25,000
Trading liabilities 9,105,000
Other borrowed money:
With original maturity of one year or less 2,783,000
With original maturity of more than one year 395,000
Mortgage indebtedness and obligations under capitalized leases 40,000
Bank's liability on acceptances executed and outstanding 1,100,000
Subordinated notes and debentures 1,960,000
Other liabilities 5,747,000
-----------
TOTAL LIABILITIES 90,083,000
-----------
Limited-life preferred stock and related surplus 0
Perpetual preferred stock and related surplus 0
Common stock 921,000
Surplus 5,244,000
Undivided profits and capital reserves 1,695,000
Net unrealized holding gains (losses) on available-for-sale securities (43,000)
Cumulative foreign currency translation adjustments 11,000
-----------
TOTAL EQUITY CAPITAL 7,828,000
-----------
TOTAL LIABILITIES, LIMITED-LIFE PREFERRED STOCK, AND EQUITY CAPITAL $97,911,000
===========
</TABLE>
<PAGE> 5
I, Lester J. Stephens, Jr., Senior Vice President and Controller of the above
named bank do hereby declare that this Report of Condition is true and correct
to the best of my knowledge and belief.
/s/ Lester J. Stephens
We, the undersigned directors, attest to the correctness of this statement of
resources and liabilities. We declare that it has been examined by us, and to
the best of our knowledge and belief has been prepared in conformance with the
instructions and is true and correct.
/s/ Thomas G. Labrecque
/s/ Arthur F. Ryan Directors
/s/ Richard J. Boyle
<PAGE> 1
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.
EXHIBIT 99
FORM OF PROSPECTUS SUPPLEMENT FOR TRUST PREFERRED SECURITIES
SUBJECT TO COMPLETION, DATED , 1996
PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED , 1996)
PREFERRED SECURITIES
TEXTRON CAPITAL I [LOGO TEXTRON]
% TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TEXTRON INC.
------------------
The % Trust Preferred Securities (the "Preferred Securities") offered
hereby represent preferred undivided beneficial interests in the assets of
Textron Capital I, a statutory business trust formed under the laws of the State
of Delaware ("Textron Capital" or the "Trust"). Textron Inc., a Delaware
corporation ("Textron" and, together with its subsidiaries, the "Company"), will
directly or indirectly own all the common securities (the "Common Securities"
and, together with the Preferred Securities, the "Trust Securities")
representing undivided beneficial interests in the assets of Textron Capital.
Textron Capital exists for the sole purpose of issuing the Preferred Securities
and Common Securities and investing the proceeds thereof in an equivalent amount
of % Junior Subordinated Deferrable Interest Debentures due 2044 (the
"Junior Subordinated Debt Securities") of Textron.
(continued on next page)
SEE "RISK FACTORS" ON PAGE S-6 FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY
BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES OF
SUCH DEFERRAL.
Application has been made to list the Preferred Securities on the New York
Stock Exchange, Inc. (the "New York Stock Exchange"). If so approved, trading of
the Preferred Securities on the New York Stock Exchange is expected to commence
within a 30-day period after the initial delivery of the Preferred Securities.
See "Underwriting."
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS TO
WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
=========================================================================================================
INITIAL PUBLIC UNDERWRITING PROCEEDS TO
OFFERING PRICE(1) COMMISSION(2) TRUST(3)(4)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security............................... $ (3) $
- ---------------------------------------------------------------------------------------------------------
Total................................................ $ (3) $
=========================================================================================================
<FN>
(1) Plus accrued distributions, if any, from , 1996.
(2) Textron Capital and Textron have agreed to indemnify the several
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(3) In view of the fact that the proceeds of the sale of the Preferred
Securities will be invested in the Junior Subordinated Debt Securities,
Textron has agreed to pay to the Underwriters as compensation
("Underwriters' Compensation") for their arranging the investment therein
of such proceeds $ per Preferred Security (or $ in the
aggregate); provided, that such compensation for sales of 10,000 or more
Preferred Securities to a single purchaser will be $ per
Preferred Security. Therefore, to the extent of such sales, the actual
amount of Underwriters' Compensation will be less than the aggregate
amount specified in the preceding sentence. See "Underwriting."
(4) Expenses of the offering which are payable by Textron are estimated to be
$ .
</TABLE>
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them and
subject to their right to reject any order in whole or in part. It is expected
that delivery of the Preferred Securities will be made only in book-entry form
through the facilities of The Depository Trust Company, on or about
, 1996.
------------------
SMITH BARNEY INC.
------------------
The date of this Prospectus Supplement is , 1996.
<PAGE> 2
(continued from previous page)
Upon an event of a default under the Declaration (as defined herein), the
holders of Preferred Securities will have a preference over the holders of the
Common Securities with respect to payments in respect of distributions and
payments upon redemption, liquidation and otherwise.
Holders of the Preferred Securities are entitled to receive cumulative cash
distributions at an annual rate of % of the liquidation amount of $25 per
Preferred Security, accruing from the date of original issuance and payable
quarterly in arrears on , , and
of each year, commencing , 1996 ("distributions").
The payment of distributions out of moneys held by Textron Capital and payments
on liquidation of Textron Capital or the redemption of Preferred Securities, as
set forth below, are guaranteed by Textron (the "Guarantee") to the extent
described under "Description of Trust Guarantees" in the accompanying
Prospectus. The Guarantee covers payments of distributions and other payments on
the Preferred Securities only if and to the extent that Textron has made a
payment of interest or principal or other payments on the Junior Subordinated
Debt Securities held by Textron Capital as its sole asset. The Guarantee, when
taken together with Textron's obligations under the indenture pursuant to which
the Junior Subordinated Debt Securities are issued and its obligations under the
Declaration (as defined below), including its liabilities to pay costs,
expenses, debts and liabilities of Textron Capital (other than with respect to
the Trust Securities), provide a full and unconditional guarantee of amounts due
on the Preferred Securities. The obligations of Textron under the Guarantee rank
(i) subordinate and junior in right of payment to all other liabilities of
Textron, (ii) pari passu with the most senior preferred or preference stock now
or hereafter issued by Textron and with any guarantee now or hereafter entered
into by Textron in respect of any preferred or preference stock of any affiliate
of Textron and (iii) senior to Textron's common stock. The obligations of
Textron under the Junior Subordinated Debt Securities are subordinate and junior
in right of payment to all present and future Senior Indebtedness (as defined
herein) of Textron, which aggregated approximately $ at
, 1995, and rank pari passu with obligations to or rights of
Textron's other general unsecured creditors, which aggregated approximately
$ at , 1995.
The distribution rate and the distribution payment date and other payment
dates for the Preferred Securities will correspond to the interest rate and
interest payment dates and other payment dates on the Junior Subordinated Debt
Securities, which will be the sole assets of Textron Capital. As a result, if
principal or interest is not paid on the Junior Subordinated Debt Securities, no
amounts will be paid on the Preferred Securities. If Textron does not make
principal or interest payments on the Junior Subordinated Debt Securities,
Textron Capital will not have sufficient funds to make distributions on the
Preferred Securities, in which event, the Guarantee will not apply to such
distributions until Textron Capital has sufficient funds available therefor.
Textron has the right to defer payments of interest on the Junior
Subordinated Debt Securities by extending the interest payment period on the
Junior Subordinated Debt Securities at any time for up to 20 consecutive
quarters (each, an "Extension Period"). If interest payments are so deferred,
distributions will also be deferred. During such Extension Period, distributions
will continue to accrue with interest thereon (to the extent permitted by
applicable law) at an annual rate of % per annum compounded quarterly, and
during any Extension Period, holders of Preferred Securities will be required to
include deferred interest income in their gross income for United States federal
income tax purposes in advance of receipt of the cash distributions with respect
to such deferred interest payments. There could be multiple Extension Periods of
varying lengths throughout the term of the Junior Subordinated Debt Securities.
See "Description of the Junior Subordinated Debt Securities -- Option to Extend
Interest Payment Period," "Risk Factors -- Option to Extend Interest Payment
Period and Defer Payment of Interest" and "United States Federal Income
Taxation -- Original Issue Discount."
The Junior Subordinated Debt Securities are redeemable by Textron, in whole
or in part, from time to time, on or after , , or at any
time in certain circumstances upon the occurrence of a Tax Event (as defined
herein). If Textron redeems Junior Subordinated Debt Securities, Textron Capital
must redeem Trust Securities having an aggregate liquidation amount equal to the
aggregate principal amount of
S-2
<PAGE> 3
the Junior Subordinated Debt Securities so redeemed at $25 per Preferred
Security plus accrued and unpaid distributions thereon (the "Redemption Price")
to the date fixed for redemption. See "Description of the Preferred
Securities -- Mandatory Redemption of Trust Securities." The Preferred
Securities will be redeemed upon maturity of the Junior Subordinated Debt
Securities. The Junior Subordinated Debt Securities mature on ,
. In addition, upon the occurrence of a Special Event arising from a change
in law or a change in legal interpretation regarding tax or investment company
matters, unless the Junior Subordinated Debt Securities are redeemed in the
limited circumstances described herein, Textron Capital shall be dissolved, with
the result that the Junior Subordinated Debt Securities will be distributed to
the holders of the Preferred Securities, on a pro rata basis, in lieu of any
cash distribution. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution." In certain circumstances, Textron will have the
right to redeem the Junior Subordinated Debt Securities, which would result in
the redemption by Textron Capital of Trust Securities in the same amount on a
PRO RATA basis. If the Junior Subordinated Debt Securities are distributed to
the holders of the Preferred Securities, Textron will use its best efforts to
have the Junior Subordinated Debt Securities listed on the New York Stock
Exchange or on such other exchange as the Preferred Securities are then listed.
See "Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Description of the Junior Subordinated Debt Securities."
In the event of the involuntary or voluntary dissolution, winding up or
termination of Textron Capital, the holders of the Preferred Securities will be
entitled to receive for each Preferred Security a liquidation amount of $25 plus
accrued and unpaid distributions thereon (including interest thereon) to the
date of payment, unless, in connection with such dissolution, the Junior
Subordinated Debt Securities are distributed to the holders of the Preferred
Securities. See "Description of the Preferred Securities -- Liquidation
Distribution Upon Dissolution."
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES
OFFERED HEREBY AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING TRANSACTIONS, IF
COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-3
<PAGE> 4
THE COMPANY
Textron, together with its subsidiaries, is a global, multi-industry
company with operations in six business segments: Aircraft, Automotive,
Industrial, Systems and Components, Finance and Paul Revere insurance. The
Company's products and services include Bell helicopters, Cessna aircraft,
Speidel watchbands, Avco Financial Services, E-Z-GO golf cars, Jacobsen lawn and
turf care equipment and disability insurance provided by The Paul Revere
Corporation.
The Aircraft segment consists of Bell Helicopter ("Bell") and Cessna
Aircraft ("Cessna"). Bell is the world's leader in commercial helicopter
production, both in number and dollar value of units sold. Cessna is the world's
largest designer and manufacturer of light and mid-sized business jets and
single-engine utility turboprop aircraft.
Textron Automotive Company supplies products primarily to automotive
original equipment manufacturers. A full-service global supplier of instrument
panels, exteriors, interiors, lighting and various functional components, the
Company is the leading independent supplier of interior trim components and a
major supplier of exterior trim components for cars and trucks made in North
America.
The Industrial segment is comprised of three major business groups:
fastening systems, golf, lawn and turf care equipment and diversified products.
The divisions of the Industrial segment sell products to the industrial and
consumer markets under a number of worldwide brand names, including E-Z-GO,
Jacobsen and Speidel.
The divisions of the Systems and Components segment manufacture various
products and components primarily for the commercial aerospace and defense
industries. These products include aircraft structures and controls, smart
weapons, amphibious vehicles, advanced materials and a variety of related
components.
The Company's Finance segment consists of Avco Financial Services ("AFS")
and Textron Financial Corporation ("TFC"). AFS is a multinational consumer
finance company with nearly 1,200 offices serving 1.8 million customers in seven
countries. TFC is a diversified commercial finance company that finances the
sale of Company and third-party products.
The Paul Revere Corporation ("Paul Revere") is the leading provider of
individual non-cancellable disability insurance in North America. Paul Revere
also provides group disability, life and annuity products. Paul Revere is 83
percent owned by Textron and 17 percent publicly owned and traded on the New
York Stock Exchange, Inc. ("PRL").
Textron's corporate office is located at 40 Westminster Street, Providence,
Rhode Island 02903; its telephone number is (401) 421-2800.
S-4
<PAGE> 5
TEXTRON CAPITAL I
Textron Capital is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust, dated as of October 3, 1995, executed by
Textron, as sponsor (the "Sponsor"), and the trustees of Textron Capital (the
"Textron Trustees") and (ii) the filing of a certificate of trust with the
Secretary of State of the State of Delaware on October 4, 1995. Such declaration
will be amended and restated in its entirety (as so amended and restated, the
"Declaration") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus Supplement and the accompanying Prospectus
form a part. The Declaration will be qualified as an indenture under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). Upon issuance of
the Preferred Securities, the purchasers thereof will own all of the Preferred
Securities. See "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company." Textron will directly or indirectly
acquire Common Securities in an aggregate liquidation amount equal to 3% of the
total capital of Textron Capital. Textron Capital 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 Debt Securities and (iii) engaging
in only those other activities necessary or incidental thereto.
Pursuant to the Declaration, the number of Textron Trustees will initially
be three. Two of the Textron Trustees (the "Regular Trustees") will be persons
who are employees or officers of, or who are affiliated with, Textron.
Initially, the Regular Trustees will be Richard A. Watson, Senior Vice President
and Treasurer, and Gregory E. Hudson, Vice President-Taxes, of Textron. The
third trustee will be a financial institution that maintains its principal place
of business in the State of Delaware and is unaffiliated with Textron, which
trustee will serve as property trustee under the Declaration and as indenture
trustee for the purposes of compliance with the provisions of the Trust
Indenture Act (the "Institutional Trustee"). Initially, The Chase Manhattan
Bank, N.A., a national banking association, will be the Institutional Trustee
until removed or replaced by the holder of the Common Securities. The Chase
Manhattan Bank, N.A., will also act as indenture trustee under the Guarantee for
the purposes of compliance with the provisions of the Trust Indenture Act (the
"Guarantee Trustee"). See "Description of Trust Guarantees" in the accompanying
Prospectus.
The Institutional Trustee will hold title to the Junior Subordinated Debt
Securities for the benefit of the holders of the Trust Securities and, in its
capacity as the holder, the Institutional Trustee will have the power to
exercise all rights, powers and privileges under the indenture pursuant to which
the Junior Subordinated Debt Securities are issued. In addition, the
Institutional 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 Junior Subordinated Debt Securities for the benefit of
the holders of the Trust Securities. The Institutional Trustee will make
payments of distributions and payments on liquidation, redemption and otherwise
to the holders of the Trust Securities out of funds from the Property Account.
The Guarantee Trustee will hold the Guarantee for the benefit of the holders of
the Preferred Securities. Textron, as the direct or indirect holder of all the
Common Securities, will have the right to appoint, remove or replace any Textron
Trustee and to increase or decrease the number of Textron Trustees; PROVIDED,
that (i) the number of Textron Trustees shall be at least two and (ii) at least
one shall be a Regular Trustee. Textron will pay all fees and expenses related
to Textron Capital and the offering of the Trust Securities. See "Description of
the Junior Subordinated Debt Securities -- Miscellaneous."
The rights of the holders of the Preferred Securities, including economic
rights, rights to information and voting rights, are set forth in the
Declaration, the Delaware Business Trust Act (the "Trust Act") and the Trust
Indenture Act. See "Description of the Preferred Securities."
S-5
<PAGE> 6
RISK FACTORS
Prospective purchasers of Preferred Securities should carefully review the
information contained elsewhere in this Prospectus Supplement and in the
accompanying Prospectus and should particularly consider the following matters.
RANKING OF SUBORDINATE OBLIGATIONS UNDER THE GUARANTEE AND JUNIOR SUBORDINATED
DEBT SECURITIES
Textron's obligations under the Guarantee rank (i) subordinate and junior
in right of payment to all other liabilities of Textron, (ii) pari passu with
the most senior preferred or preference stock now or hereafter issued by Textron
and with any guarantee now or hereafter entered into by Textron in respect of
any preferred or preference stock of any affiliate of Textron and (iii) senior
to Textron's common stock. The obligations of Textron under the Junior
Subordinated Debt Securities are subordinate and junior in right of payment to
all present and future Senior Indebtedness of Textron and pari passu with
obligations to or rights of Textron's other general unsecured creditors. No
payment of principal (including redemption payments, if any), premium, if any,
or interest on the Junior Subordinated Debt Securities may be made if (i) any
Senior Indebtedness of Textron is not paid when due and any applicable grace
period with respect to such default has ended with such default not having been
cured or waived or ceasing to exist, or (ii) the maturity of any Senior
Indebtedness has been accelerated because of a default. As of ,
1995, Senior Indebtedness aggregated approximately $ . There are no
terms in the Preferred Securities, the Junior Subordinated Debt Securities or
the Guarantee that limit Textron's ability to incur additional indebtedness,
including indebtedness that ranks senior to the Junior Subordinated Debt
Securities and the Guarantee. See "Description of Trust Guarantees -- Status of
the Trust Guarantees" and "Particular Terms of the Junior Subordinated Debt
Securities" in the accompanying Prospectus, and "Description of the Junior
Subordinated Debt Securities -- Subordination" herein.
STRUCTURAL SUBORDINATION
The Junior Subordinated Debt Securities will be obligations of Textron
exclusively. Since a significant part of Textron's operations are conducted
through subsidiaries, a significant portion of Textron's cash flow and,
consequently, its ability to service debt, including the Junior Subordinated
Debt Securities, is dependent upon the earnings of its subsidiaries and the
transfer of funds by those subsidiaries to Textron in the form of dividends or
other transfers, supplemented with borrowings. Financing for Textron is
conducted through two separate borrowing groups: the Textron Parent Company
Borrowing Group and Textron's finance and insurance subsidiaries. See
"Capitalization of Textron Parent Company Borrowing Group." The amount of the
net assets of Textron's finance and insurance subsidiaries available for cash
dividends and other payments to the Textron Parent Company Borrowing Group is
restricted by the terms of lending agreements and statutory requirements
applicable to insurance companies. See "Capitalization of Textron Parent Company
Borrowing Group."
In addition, creditors of Textron's subsidiaries would be entitled to a
claim on the assets of such subsidiaries prior to any claims by Textron.
Consequently, in the event of a liquidation or reorganization of any subsidiary,
creditors of the subsidiary are likely to be paid in full before any
distribution is made to Textron, except to the extent that Textron itself is
recognized as a creditor of such subsidiary, in which case the claims of Textron
would still be subordinate to any security interest in the assets of such
subsidiary and any indebtedness of such subsidiary senior to that held by
Textron. As of , 1995, the subsidiaries of the Textron Parent
Company Borrowing Group and Textron's finance and insurance subsidiaries had an
aggregate of $ million of outstanding indebtedness and other obligations,
of which $ was secured. See "Textron Inc. Summary Financial Data."
RIGHTS UNDER THE GUARANTEE
The Guarantee will be qualified as an indenture under the Trust Indenture
Act. The Institutional Trustee will act as indenture trustee under the Guarantee
for the purposes of compliance with the provisions of the
S-6
<PAGE> 7
Trust Indenture Act. The Guarantee Trustee will hold the Guarantee for the
benefit of the holders of the Preferred Securities.
The Guarantee guarantees to the holders of the Preferred Securities the
payment of (i) any accrued and unpaid distributions that are required to be paid
on the Preferred Securities, to the extent Textron Capital has funds available
therefor, (ii) the Redemption Price, including all accrued and unpaid
distributions with respect to Preferred Securities called for redemption by
Textron Capital, to the extent Textron Capital has funds available therefor, and
(iii) upon a voluntary or involuntary dissolution, winding-up or termination of
Textron Capital (other than in connection with the distribution of Junior
Subordinated Debt Securities to the holders of Preferred Securities or a
redemption of all the Preferred Securities), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid distributions on the Preferred
Securities to the date of the payment to the extent Textron Capital has funds
available therefor or (b) the amount of assets of Textron Capital remaining
available for distribution to holders of the Preferred Securities in liquidation
of Textron Capital. 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 or
to direct the exercise of any trust or power conferred upon the Guarantee
Trustee under the Guarantee. If the Guarantee Trustee fails to enforce the
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against Textron to enforce the Guarantee Trustee's rights under the
Guarantee without first instituting a legal proceeding against Textron Capital,
the Guarantee Trustee or any other person or entity. If Textron were to default
on its obligation to pay amounts payable on the Junior Subordinated Debt
Securities, Textron Capital would lack available 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 would not be
able to rely upon the Guarantee for payment of such amounts. Instead, holders of
the Preferred Securities would rely on the enforcement (1) by the Institutional
Trustee of its rights as registered holder of the Junior Subordinated Debt
Securities against Textron pursuant to the terms of the Junior Subordinated Debt
Securities or (2) by such holder of its right against Textron to enforce
payments on Junior Subordinated Debt Securities. See "Description of Trust
Guarantees" and "Description of Debt Securities -- Particular Terms of the
Junior Subordinated Debt Securities" in the accompanying Prospectus. The
Declaration provides that each holder of Preferred Securities, by acceptance
thereof, agrees to the provisions of the Guarantee, including the subordination
provisions thereof, and the Indenture.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Declaration Event of Default (as defined herein) occurs and is
continuing, then the holders of Preferred Securities would rely on the
enforcement by the Institutional Trustee of its rights as a holder of the Junior
Subordinated Debt Securities against Textron. In addition, the holders of a
majority in liquidation amount of the Preferred Securities will have the right
to direct the time, method, and place of conducting any proceeding for any
remedy available to the Institutional Trustee or to direct the exercise of any
trust or power conferred upon the Institutional Trustee under the Declaration,
including the right to direct the Institutional Trustee to exercise the remedies
available to it as a holder of the Junior Subordinated Debt Securities. If the
Institutional Trustee fails to enforce its rights under the Junior Subordinated
Debt Securities, any holder of Preferred Securities may institute a legal
proceeding directly against Textron to enforce the Institutional Trustee's
rights under the Junior Subordinated Debt Securities without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. Notwithstanding the foregoing, if a Declaration Event of Default has
occurred and is continuing and such event is attributable to the failure of
Textron to pay interest or principal on the Junior Subordinated Debt Securities
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 of the
principal of or interest on the Junior Subordinated Debt Securities 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
Junior Subordinated Debt Securities. The holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Junior Subordinated Debt Securities.
S-7
<PAGE> 8
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Textron has the right under the Indenture (as defined herein) to defer
payments of interest on the Junior Subordinated Debt Securities by extending the
interest payment period from time to time on the Junior Subordinated Debt
Securities for an Extension Period not exceeding 20 consecutive quarterly
interest periods during which no interest shall be due and payable, provided
that no Extension Period may extend beyond the maturity of the Junior
Subordinated Debt Securities. As a consequence of such an extension, quarterly
distributions on the Preferred Securities would be deferred (but despite such
deferral would continue to accrue with interest thereon compounded quarterly) by
Textron Capital during any such extended interest payment period. In the event
that Textron exercises this right to defer interest payments, then, pursuant to
the Indenture, (a) Textron shall not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto, and (b) Textron shall not make any
payment of interest, principal (or premium, if any, on) or repay, repurchase or
redeem any debt securities issued by Textron which rank pari passu with or
junior to such Junior Subordinated Debt Securities. The Indenture, however, will
except from the foregoing (i) any stock dividends paid by Textron where the
dividend stock is the same stock as that on which the dividend is being paid and
(ii) any purchases by Textron of its common stock from The Paul Revere
Corporation ("Paul Revere") or its subsidiaries pursuant to the Agreement to
Purchase Stock, dated April 12, 1990, among Textron, The Paul Revere Life
Insurance Company, The Paul Revere Protective Life Insurance Company and The
Paul Revere Variable Annuity Insurance Company, and the Stock Purchase
Agreement, dated as of September 23, 1993, between Textron and Paul Revere
(together, the "Paul Revere Stock Purchase Agreements"). Prior to the
termination of any Extension Period, Textron may further extend such Extension
Period; provided, that such Extension Period, together with all such previous
and further extensions thereof, may not exceed 20 consecutive quarterly interest
periods. Upon the termination of any Extension Period and the payment of all
amounts then due, Textron may commence a new Extension Period, subject to the
above requirements. Textron may also prepay at any time all or any portion of
the interest accrued during an Extension Period. Consequently, there could be
multiple Extension Periods of varying lengths (up to nine Extension Periods of
20 consecutive quarterly interest periods each or more numerous shorter
Extension Periods) throughout the term of the Junior Subordinated Debt
Securities. See "Description of the Preferred Securities -- Distributions" and
"Description of the Junior Subordinated Debt Securities -- Option to Extend
Interest Payment Period."
Should Textron exercise its right to defer payments of interest by
extending the interest payment period, each holder of Preferred Securities will
continue to accrue income (as original issue discount ("OID")) in respect of the
deferred interest allocable to its Preferred Securities for United States
federal income tax purposes, which will be allocated but not distributed, to
holders of record of Preferred Securities. As a result, each such holder of
Preferred Securities will recognize income for United States federal income tax
purposes in advance of the receipt of cash and will not receive the cash from
Textron Capital related to such income if such holder disposes of its Preferred
Securities prior to the record date for the date on which distributions of such
amounts are made. Textron has no current intention of exercising its right to
defer payments of interest by extending the interest payment period on the
Junior Subordinated Debt Securities. However, should Textron determine to
exercise such right in the future, the market price of the Preferred Securities
is likely to be affected. A holder that disposes of its Preferred Securities
during an Extension 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 Textron's right to defer interest
payments, the market price of the Preferred Securities (which represent an
undivided beneficial interest in the Junior Subordinated Debt Securities) may be
more volatile than other securities on which OID accrues that do not have such
rights. See "United States Federal Income Taxation -- Original Issue Discount."
PROPOSED TAX LEGISLATION
On December 7, 1995, as part of President Clinton's Seven-Year Balanced
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") that would treat certain debt instruments issued on or after
December 7, 1995, including debt instruments such as the Junior Subordinated
Debt
S-8
<PAGE> 9
Securities, as equity for United States federal income tax purposes. However, on
December 19, 1995, the Treasury Department stated its intention to include as
part of the Proposed Legislation transition relief for debt instruments issued
pursuant to a registration statement filed with the SEC on or before December 7,
1995, to the extent of the aggregate amount of such debt instruments described
in the registration statement. Based on the Treasury Department's statement, it
is expected that the Proposed Legislation, if enacted without substantial
modification, would not apply to the Junior Subordinated Debt Securities. There
can be no assurances, however, that the Proposed Legislation, if enacted, will
include transition relief applicable to the Junior Subordinated Debt Securities
or that other legislation enacted after the date hereof will not otherwise
adversely affect the tax treatment of the Junior Subordinated Debt Securities,
result in the distribution of the Junior Subordinated Debt Securities to holders
of the Trust Securities or, in certain limited circumstances, the redemption of
such securities by Textron. [See "Description of Preferred Securities -- Special
Event Redemption or Distribution."]
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
Upon the occurrence of a Special Event, Textron Capital shall be dissolved,
except in the limited circumstance described below, with the result that the
Junior Subordinated Debt Securities would be distributed to the holders of the
Trust Securities in connection with the liquidation of Textron Capital. In
certain circumstances in connection with a Tax Event, Textron shall have the
right to redeem the Junior Subordinated Debt Securities, in whole or in part, in
lieu of a distribution of the Junior Subordinated Debt Securities by Textron
Capital, in which event Textron Capital will redeem the Trust Securities on a
pro rata basis to the same extent as the Junior Subordinated Debt Securities are
redeemed by Textron. See "Description of the Preferred Securities -- Special
Event Redemption or Distribution."
Under current United States federal income tax law, a distribution of
Junior Subordinated Debt Securities upon the dissolution of Textron Capital
would not be a taxable event to holders of the Preferred Securities. Upon the
occurrence of a Special Event, however, a dissolution of Textron Capital in
which holders of the Preferred Securities receive cash would be a taxable event
to such holders. See "United States Federal Income Taxation -- Receipt of Junior
Subordinated Debt Securities or Cash Upon Liquidation of Textron Capital."
There can be no assurance as to the market prices for the Preferred
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for Preferred Securities if a dissolution or liquidation of Textron
Capital were to occur. Accordingly, the Preferred Securities that an investor
may purchase, whether pursuant to the offer made hereby or in the secondary
market, or the Junior Subordinated Debt Securities that a holder of Preferred
Securities may receive on dissolution and liquidation of Textron Capital, 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 Debt Securities upon the occurrence of a Special
Event, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Junior Subordinated Debt Securities and
should carefully review all the information regarding the Junior Subordinated
Debt Securities contained herein and in the accompanying Prospectus. See
"Description of the Preferred Securities -- Special Event Redemption or
Distribution" and "Description of the Junior Subordinated Debt
Securities -- General."
LIMITED VOTING RIGHTS
Holders of Preferred Securities will have limited voting rights and will
not be entitled to vote to appoint, remove or replace, or to increase or
decrease the number of, Textron Trustees, which voting rights are vested
exclusively in the holder of the Common Securities. See "Description of
Preferred Securities -- Voting Rights."
TRADING PRICE
The Preferred Securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest with respect to the underlying Junior
Subordinated Debt Securities. A holder who disposes of its Preferred Securities
between record dates for payments of distributions thereon will be required to
include
S-9
<PAGE> 10
accrued but unpaid interest on the Junior Subordinated Debt Securities to the
date of disposition in income as ordinary income (i.e., OID), and to add such
amount to its adjusted tax basis in its pro rata share of the underlying Junior
Subordinated Debt Securities deemed disposed of. To the extent the selling price
is less than the holder's adjusted tax basis (which will include, in the form of
OID, all accrued but unpaid interest), a holder will recognize a capital loss.
Subject to certain limited exceptions, capital losses cannot be applied to
offset ordinary income for United States federal income tax purposes. See
"United States Federal Income Taxation -- Original Issue Discount" and "
- -- Sales of Preferred Securities."
S-10
<PAGE> 11
TEXTRON INC.
SUMMARY FINANCIAL DATA
<TABLE>
The following table sets forth selected historical financial data with
respect to the Company for the periods indicated. The selected historical
financial data for each of the five years in the period ended December 31, 1994,
are derived from the consolidated financial statements of the Company, which
statements have been audited by Ernst & Young LLP, independent auditors. See
"Experts" in the accompanying Prospectus. The selected historical financial data
for the nine months ended September 30, 1995 and October 1, 1994 are derived
from the unaudited consolidated financial statements of the Company for such
periods and, in the opinion of management, include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation of the
financial position and results of operations for these periods. Operating
results for the nine months ended September 30, 1995 are not necessarily
indicative of the results that may be expected for the entire year ending
December 30, 1995. The selected historical financial data should be read in
conjunction with the Company's Consolidated Financial Statements and notes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1994 and the Quarterly Report on Form 10-Q for the nine months
ended September 30, 1995, which are incorporated by reference into this
Prospectus Supplement. See "Incorporation of Certain Documents by Reference" in
the accompanying Prospectus.
<CAPTION>
NINE MONTHS ENDED
----------------------- YEAR
SEPT. 30, OCT. 1, --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES
Sales.............................. $ 4,763 $ 5,084 $ 6,678 $ 6,271 $ 5,616 $ 5,211 $ 5,470
Interest, discount and service
charges.......................... 1,165 981 1,333 1,260 1,273 1,184 1,139
Insurance premiums................. 1,036 908 1,233 1,137 1,094 1,073 975
Investment income (including net
realized investment gains)....... 350 333 439 410 365 372 333
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total revenues................. 7,314 7,306 9,683 9,078 8,348 7,840 7,917
---------- ---------- ---------- ---------- ---------- ---------- ----------
COSTS AND EXPENSES
Cost of sales...................... 3,905 4,241 5,514 5,210 4,560 4,185 4,425
Selling and administrative......... 1,137 1,115 1,489 1,438 1,402 1,330 1,289
Interest........................... 609 489 665 668 743 754 775
Provision for losses on collection
of finance receivables, less
recoveries....................... 120 117 162 153 160 135 123
Insurance benefits and increase in
policy liabilities............... 844 724 992 850 824 812 720
Amortization of insurance policy
acquisition costs................ 101 81 107 143 132 129 126
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total costs and expenses....... 6,716 6,767 8,929 8,462 7,821 7,345 7,458
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before income taxes......... 598 539 754 616 527 495 459
Income taxes....................... (236) (207) (308) (234) (203) (195) (176)
Elimination of minority interest in
net income of Paul Revere........ (10) (11) (13) (3) -- -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Income before cumulative effect of
changes in accounting
principles....................... 352 321 433 379 324 300 283
Cumulative effect of changes in
accounting principles, net of
income taxes..................... -- -- -- -- (679) -- --
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net income (loss).................. $ 352 $ 321 $ 433 $ 379 $ (355) $ 300 $ 283
========== ========== ========== ========== ========== ========== ==========
</TABLE>
S-11
<PAGE> 12
TEXTRON INC.
SUMMARY FINANCIAL DATA -- (CONTINUED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------- YEAR
SEPT. 30, OCT. 1, --------------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---------- ---------- ---------- ---------- ---------- ---------- ----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
FINANCIAL POSITION
Total assets....................... $ 22,712 $ 20,737 $ 20,925 $ 19,658 $ 18,367 $ 15,737 $ 14,892
Debt:
Textron Parent Company Borrowing
Group.......................... $ 1,669 $ 1,851 $ 1,582 $ 2,025 $ 2,283 $ 1,820 $ 1,925
Finance and insurance
subsidiaries................... $ 8,536 $ 7,252 $ 7,782 $ 6,847 $ 6,440 $ 5,664 $ 5,319
Shareholders' equity............... $ 3,226 $ 2,995 $ 2,882 $ 2,780 $ 2,488 $ 2,928 $ 2,662
---------- ---------- ---------- ---------- ---------- ---------- ----------
OTHER DATA
Capital expenditures............... $ 197 $ 198 $ 302 $ 252 $ 217 $ 156 $ 191
Depreciation....................... $ 154 $ 163 $ 212 $ 206 $ 199 $ 182 $ 179
</TABLE>
S-12
<PAGE> 13
CAPITALIZATION OF TEXTRON PARENT COMPANY BORROWING GROUP
The following table sets forth the unaudited summary capitalization at
September 30, 1995 of the Textron Parent Company Borrowing Group, and is
adjusted to reflect the application of the estimated net proceeds from the sale
of Preferred Securities. See "Use of Proceeds." The table should be read in
conjunction with Textron Inc.'s consolidated financial statements and notes
thereto and other financial data incorporated by reference herein. See
"Incorporation of Certain Documents by Reference" in the accompanying
Prospectus.
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1995
---------------------------
ACTUAL AS ADJUSTED(1)
------ --------------
<S> <C> <C>
(IN MILLIONS)
DEBT:(2)(3)
Short-term borrowings............................................ $ 50 $ 50
Long-term borrowings............................................. 1,619
------ -------
Total debt............................................... 1,669
------ -------
TEXTRON-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF
THE TRUST(4)..................................................... --
SHAREHOLDERS' EQUITY:
Preferred stock.................................................. 15 15
Common stock..................................................... 12 12
Capital surplus.................................................. 738 738
Retained earnings................................................ 2,771 2,771
Other............................................................ 42 42
------ -------
3,578 3,578
Less cost of treasury shares............................. 352 352
------ -------
Total shareholders' equity............................... 3,226 3,226
------ -------
Total capitalization..................................... $4,895 $
====== ===========
</TABLE>
- ---------------
(1) Adjusted for the sale of Preferred Securities, the application of the
estimated net proceeds to the purchase of Junior Subordinated Debt
Securities of Textron and the application by Textron of the estimated net
proceeds of Junior Subordinated Debt Securities for the purpose set forth
under "Use of Proceeds."
(2) Textron consists of two borrowing groups -- the Textron Parent Company
Borrowing Group and its finance and insurance subsidiaries. This framework
is designed to enhance the borrowing power of the total company by
separating borrowing oriented units of a specialized business nature such as
financial services. The finance and insurance subsidiaries finance their
respective operations by borrowing from their own group of external
creditors.
(3) The amount of the net assets of Textron's finance and insurance subsidiaries
available for cash dividends and other payments to the Textron Parent
Company Borrowing Group is restricted by the terms of lending agreements and
insurance statutory requirements. As of December 31, 1994, approximately
$245 million of their net assets of $2.2 billion was available to be
transferred to the Textron Parent Company Borrowing Group pursuant to these
restrictions. AFS' and TFC's loan agreements also contain various
restrictive provisions regarding additional debt, the creation of liens or
guarantees and the making of investments.
(4) As described in this Prospectus Supplement, the sole asset of the Trust will
be $ principal amount of % Junior Subordinated Deferrable
Interest Debentures due of Textron.
S-13
<PAGE> 14
TEXTRON INC.
RATIO OF INCOME TO FIXED CHARGES
<TABLE>
The following table sets forth unaudited ratios of income to fixed charges
of Textron for the periods indicated.
<CAPTION>
NINE MONTHS ENDED
--------------------- YEAR
SEPT. 30, OCT. 1, --------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- ------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Textron Parent Company Borrowing
Group(a)(b)(c)(d)(f).................. 3.02 2.52 2.80 2.07 1.88 1.95 2.06
Textron Inc. including all
majority-owned
subsidiaries(d)(e)(f)................. 1.91 2.00 2.04 1.86 1.67 1.62 1.56
<FN>
- ---------------
(a) The Textron Parent Company Borrowing Group consists of all Textron entities
other than its finance and insurance subsidiaries.
(b) For the purpose of calculating the ratio of income to fixed charges for the
Textron Parent Company Borrowing Group, "income" consists of income before
income taxes, excluding the equity in the undistributed pre-tax income of
the finance and insurance subsidiaries, and fixed charges. "Fixed charges"
include interest expense (including interest unrelated to borrowings
(principally interest accretion) of $26 million and $27 million for the nine
months ended September 30, 1995 and October 1, 1994, respectively, and $37
million in 1994, $37 million in 1993, $36 million in 1992, $27 million in
1991, and $26 million in 1990) and one-third of rental expense (which is
deemed representative of the interest factor in rental expense), excluding
interest and rental expense of the finance and insurance subsidiaries.
(c) Income for the Textron Parent Company Borrowing Group in 1990 includes an
extraordinary dividend of $50 million from Textron's finance and insurance
subsidiaries.
(d) Income in 1992 excludes the cumulative effect of changes in accounting
principles.
(e) For the purpose of calculating the ratio of income to fixed charges for
Textron Inc. including all majority-owned subsidiaries, "income" consists of
income before income taxes, including income of the finance and insurance
subsidiaries after elimination of minority interest in pretax income of Paul
Revere, and fixed charges. "Fixed charges" include interest expense
(including interest unrelated to borrowings (principally interest accretion)
of $26 million and $27 million for the nine months ended September 30, 1995
and October 1, 1994, respectively, and $37 million in 1994, $37 million in
1993, $36 million in 1992, $27 million in 1991, and $26 million in 1990) and
one-third of rental expense (which is deemed representative of the interest
factor in rental expense), including interest and rental expense of the
finance and insurance subsidiaries.
(f) The ratio of income to combined fixed charges and preferred stock dividends
for the Textron Parent Company Borrowing Group and Textron Inc. including
all majority-owned subsidiaries is not materially different from the amounts
reported above.
</TABLE>
ACCOUNTING TREATMENT
The financial statements of Textron Capital will be reflected in Textron's
consolidated financial statements with the Preferred Securities shown as
Company-Obligated Mandatorily Redeemable Preferred Securities of the Trust
Holding Solely $ Principal Amount of % Junior Subordinated
Deferrable Interest Debentures due of Textron.
USE OF PROCEEDS
All of the proceeds from the sale of the Preferred Securities will be
invested by Textron Capital in Junior Subordinated Debt Securities of Textron
issued pursuant to the Indenture therefor described herein and ultimately will
be used by Textron for general corporate purposes, which may include capital
expenditures, investments in subsidiaries, working capital, repayment of loans
under bank credit agreements, repurchases of outstanding common shares under
Textron's repurchase program and other business opportunities.
S-14
<PAGE> 15
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the
Declaration. The Declaration will be qualified as an indenture under the Trust
Indenture Act. The Institutional Trustee, The Chase Manhattan Bank, N.A., will
act as indenture trustee under the Declaration for purposes of compliance with
the provisions of the Trust Indenture Act. The terms of the Preferred Securities
will include those stated in the Declaration and those made part of the
Declaration by the Trust Indenture Act. The following summary of the material
terms and provisions of the Preferred Securities does not purport to be complete
and is subject to, and qualified in its entirety by reference to, the
Declaration (a copy of which is filed as an exhibit to the Registration
Statement of which this Prospectus Supplement is a part), the Trust Act and the
Trust Indenture Act.
GENERAL
The Declaration authorizes the Regular Trustees to issue on behalf of
Textron Capital the Trust Securities, which represent undivided beneficial
interests in the assets of Textron Capital. All of the Common Securities will be
owned, directly or indirectly, by Textron. The Common Securities rank PARI
PASSU, and payments will be made thereon on a PRO RATA basis, with the Preferred
Securities, except that upon the occurrence and during the continuance of a
Declaration Event of Default, the rights of the holders of the Common Securities
to receive payment of periodic distributions and payments upon liquidation,
redemption and otherwise will be subordinated to the rights of the holders of
the Preferred Securities. The Declaration does not permit the issuance by
Textron Capital of any securities other than the Trust Securities or the
incurrence of any indebtedness by Textron Capital. Pursuant to the Declaration,
the Institutional Trustee will own the Junior Subordinated Debt Securities
purchased by Textron Capital for the benefit of the holders of the Trust
Securities. The payment of distributions out of money held by Textron Capital,
and payments upon redemption of the Preferred Securities or liquidation of
Textron Capital, are guaranteed by Textron to the extent described under
"Description of Trust Guarantees" in the accompanying Prospectus. The Guarantee
will be held by The Chase Manhattan Bank, N.A., the Guarantee Trustee, for the
benefit of the holders of the Preferred Securities. The Guarantee does not cover
payment of distributions when Textron Capital does not have sufficient available
funds to pay such distributions. In such event, the remedy of a holder of
Preferred Securities is to vote to direct the Institutional Trustee to enforce
the Institutional Trustee's rights under the Junior Subordinated Debt
Securities. See "Description of the Preferred Securities -- Voting Rights."
DISTRIBUTIONS
Distributions on the Preferred Securities will be fixed at a rate per annum
of % of the stated liquidation amount of $25 per Preferred Security.
Distributions in arrears for more than one quarter will bear interest thereon at
the rate per annum of % thereof compounded quarterly. The term "distribution"
as used herein includes any such interest payable unless otherwise stated. The
amount of distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
Distributions on the Preferred Securities will be cumulative, will accrue
from , 1996, and will be payable quarterly in arrears on
, , and of each year, commencing
, 1996, when, as and if available for payment, distributions will be
made by the Institutional Trustee, except as otherwise described below.
Textron has the right under the Indenture to defer payments of interest on
the Junior Subordinated Debt Securities by extending the interest payment period
from time to time on the Junior Subordinated Debt Securities for an Extension
Period not exceeding 20 consecutive quarterly interest periods during which no
interest shall be due and payable, provided that no Extension Period may extend
beyond the maturity of the Junior Subordinated Debt Securities. As a consequence
of such extension, quarterly distributions on the Preferred Securities would be
deferred (though such distributions would continue to accrue with interest
thereon compounded quarterly, since interest would continue to accrue on the
Junior Subordinated Debt Securities) during any such extended interest payment
period. In the event that Textron exercises this right, then, pursuant to the
Indenture, (a) Textron shall not declare or pay any dividend on, make any
distributions
S-15
<PAGE> 16
with respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or make any guarantee payment with respect
thereto, and (b) Textron shall not make any payment of interest, principal (or
premium, if any, on) or repay, repurchase or redeem any debt securities issued
by Textron which rank PARI PASSU with or junior to such Junior Subordinated Debt
Securities. The Indenture, however, will except from the foregoing (i) any stock
dividends paid by Textron where the dividend stock is the same stock as that on
which the dividend is being paid and (ii) any purchases by Textron of its common
stock from Paul Revere or its subsidiaries pursuant to the Paul Revere Stock
Purchase Agreements. Prior to the termination of any Extension Period, Textron
may further extend such Extension Period; PROVIDED, that such Extension Period,
together with all such previous and further extensions thereof, may not exceed
20 consecutive quarterly interest periods. Upon the termination of any Extension
Period and the payment of all amounts then due, Textron may commence a new
Extension Period, subject to the above requirements. Textron may also prepay at
any time all or any portion of the interest accrued during an Extension Period.
Consequently, there could be multiple Extension Periods of varying lengths (up
to nine Extension Periods of 20 consecutive quarterly interest periods each or
more numerous shorter Extension Periods) throughout the term of the Junior
Subordinated Debt Securities. See "Description of the Junior Subordinated Debt
Securities -- Interest" and " -- Option to Extend Interest Payment Period." If
distributions are deferred, the deferred distributions and accrued interest
thereon shall be paid to holders of record of the Preferred Securities as they
appear on the books and records of Textron Capital on the record date next
following the termination of such deferral period.
Distributions on the Preferred Securities must be paid on the dates payable
to the extent that Textron Capital has funds available for the payment of such
distributions in the Property Account. Textron Capital's funds available for
distribution to the holders of the Preferred Securities will be limited to
payments received from Textron on the Junior Subordinated Debt Securities. See
"Description of the Junior Subordinated Debt Securities." The payment of
distributions out of moneys held by Textron Capital is guaranteed by Textron to
the extent set forth under "Description of Trust Guarantees" in the accompanying
Prospectus.
Distributions on the Preferred Securities will be payable to the holders
thereof as they appear on the books and records of Textron Capital on the
relevant record dates, which, as long as the Preferred Securities remain in
book-entry only form, will be one Business Day prior to the relevant payment
dates. Such distributions will be paid through the Institutional Trustee who
will hold amounts received in respect of the Junior Subordinated Debt Securities
in the Property Account for the benefit of the holders of the Trust Securities.
Subject to any applicable laws and regulations and the provisions of the
Declaration, each such payment will be made as described under "Book-Entry Only
Issuance -- The Depository Trust Company" below. In the event that the Preferred
Securities do not continue to remain in book-entry only form, the Regular
Trustees shall have the right to select relevant record dates, which shall be
more than one Business Day prior to the relevant payment dates. In the event
that any date on which distributions are to be made on the Preferred Securities
is not a Business Day, then payment of the distributions 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 is in the next succeeding calendar year, such payment shall be made
on the immediately preceding Business Day, in each case with the same force and
effect as if made on such record date. A "Business Day" shall mean any day other
than Saturday, Sunday or any other day on which banking institutions in New York
City (in the State of New York) are permitted or required by any applicable law
to close.
MANDATORY REDEMPTION OF TRUST SECURITIES
The Junior Subordinated Debt Securities will mature on , ,
and may be redeemed, in whole or in part, at any time on or after ,
, or at any time in certain circumstances upon the occurrence of a Tax
Event (as described under "Special Event Redemption or Distribution" below). See
"Description of the Junior Subordinated Debt Securities -- Optional Redemption."
Upon the repayment of the Junior Subordinated Debt Securities, whether at
maturity or upon redemption (either at the option of Textron or pursuant to a
Tax Event), the proceeds from such repayment or payment shall simultaneously be
applied to redeem Trust Securities having an aggregate liquidation amount equal
to the aggregate principal
S-16
<PAGE> 17
amount of the Junior Subordinated Debt Securities so repaid or redeemed at the
Redemption Price; PROVIDED, that holders of Trust Securities shall be given not
less than 30 nor more than 60 days notice of such redemption. In the event that
fewer than all of the outstanding Preferred Securities are to be redeemed, the
Preferred Securities will be redeemed PRO RATA as described under "Book-Entry
Only Issuance -- The Depository Trust Company" below.
SPECIAL EVENT REDEMPTION OR DISTRIBUTION
"Tax Event" means that the Regular Trustees shall have received an opinion
of a nationally recognized independent tax counsel 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) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein or (b) any amendment to or
change in an interpretation or application of such laws or regulations by any
legislative body, court, governmental agency or regulatory authority (including
the enactment of any legislation and the publication of any judicial decision or
regulatory determination on or after such date), in either case after the date
of this Prospectus Supplement, there is more than an insubstantial risk that (i)
Textron Capital would be subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debt
Securities, (ii) interest payable to Textron Capital on the Junior Subordinated
Debt Securities would not be deductible by Textron for United States federal
income tax purposes or (iii) Textron Capital would be subject to more than a DE
MINIMIS amount of other taxes, duties or other governmental charges.
"Investment Company Event" means that the Regular Trustees shall have
received an opinion of a nationally recognized independent counsel to the effect
that, as a result of 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"), there is more than an insubstantial risk that Textron Capital
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 Prospectus Supplement.
If, at any time, a Tax Event or an Investment Company Event (each, as
defined above, a "Special Event") shall occur and be continuing, Textron Capital
shall, except in the limited circumstances described below, be dissolved with
the result that the Junior Subordinated Debt Securities with an aggregate
principal amount equal to the aggregate stated liquidation amount of, with an
interest rate identical to the distribution rate of, and accrued and unpaid
interest equal to accrued and unpaid distributions on, the Trust Securities,
would be distributed to the holders of the Trust Securities in liquidation of
such holders' interests in Textron Capital on a PRO RATA basis within 90 days
following the occurrence of such Special Event; PROVIDED, HOWEVER, that in the
case of the occurrence of a Tax Event, such dissolution and distribution shall
be conditioned on the Regular Trustees' receipt of an opinion of nationally
recognized independent tax counsel 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 Trust
Securities will not recognize any gain or loss for United States federal income
tax purposes as a result of such dissolution and distribution of Junior
Subordinated Debt Securities and, PROVIDED, FURTHER, that, if at the time there
is available to Textron Capital the opportunity to eliminate, within such 90 day
period, the Special Event by taking some ministerial action, such as filing a
form or making an election, or pursuing some other similar reasonable measure,
which has no adverse effect on Textron Capital, Textron or the holders of the
Trust Securities, Textron Capital will pursue such measure in lieu of
dissolution. Furthermore, if in the case of the occurrence of a Tax Event, (i)
Textron has received an opinion (a "Redemption Tax Opinion") of nationally
recognized independent tax counsel experienced in such matters that, as a result
of a Tax Event, there is more than an insubstantial risk that Textron would be
precluded from deducting the interest on the Junior Subordinated Debt Securities
for United States federal income tax purposes, even after the Junior
Subordinated Debt Securities were distributed to the holders of Trust Securities
in liquidation of such holders' interests in Textron Capital as described above,
or (ii) the Regular Trustees shall have been informed by such tax counsel that
it cannot deliver a No Recognition Opinion to Textron Capital, Textron shall
have the right, upon not less than 30 nor
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<PAGE> 18
more than 60 days notice, to redeem the Junior Subordinated Debt Securities, in
whole or in part, for cash within 90 days following the occurrence of such Tax
Event, and, following such redemption, Trust Securities with an aggregate
liquidation amount equal to the aggregate principal amount of the Junior
Subordinated Debt Securities so redeemed shall be redeemed by Textron Capital at
the Redemption Price on a PRO RATA basis; PROVIDED, HOWEVER, that if at the time
there is available to Textron or Textron Capital the opportunity to eliminate,
within such 90 day period, the Tax Event by taking some ministerial action, such
as filing a form or making an election or pursuing some other similar reasonable
measure that has no adverse effect on Textron Capital, Textron or the holders of
the Trust Securities, Textron or Textron Capital will pursue such measure in
lieu of redemption.
If the Junior Subordinated Debt Securities are distributed to the holders
of the Preferred Securities, Textron will use its best efforts to cause the
Junior Subordinated Debt Securities to be listed on the New York Stock Exchange
or on such other exchange as the Preferred Securities are then listed.
After the date for any distribution of Junior Subordinated Debt Securities
upon dissolution of Textron Capital, (i) the Preferred Securities will no longer
be deemed to be outstanding, (ii) the securities depositary or its nominee, as
the record holder of the Preferred Securities, will receive a registered global
certificate or certificates representing the Junior Subordinated Debt Securities
to be delivered upon such distribution, and (iii) any certificates representing
Preferred Securities not held by the Depositary or its nominee will be deemed to
represent Junior Subordinated Debt Securities having an aggregate principal
amount equal to the aggregate stated liquidation amount of, with an interest
rate identical to the distribution rate of, and accrued and unpaid interest
equal to accrued and unpaid distributions on such Preferred Securities until
such certificates are presented to Textron or its agent for transfer or
reissuance.
There can be no assurance as to the market prices for either the Preferred
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Preferred Securities if a dissolution and liquidation of
Textron Capital were to occur. Accordingly, the Preferred Securities that an
investor may purchase, whether pursuant to the offer made hereby or in the
secondary market, or the Junior Subordinated Debt Securities that an investor
may receive if a dissolution and liquidation of Textron Capital were to occur,
may trade at a discount to the price that the investor paid to purchase the
Preferred Securities offered hereby.
REDEMPTION PROCEDURES
Textron Capital may not redeem fewer than all of the outstanding Preferred
Securities unless all accrued and unpaid distributions have been paid on all
Preferred Securities for all quarterly distribution periods terminating on or
prior to the date of redemption.
If Textron Capital gives a notice of redemption in respect of Preferred
Securities (which notice will be irrevocable), then, by 12:00 noon, New York
City time, on the redemption date, provided that Textron has paid to the
Institutional Trustee a sufficient amount of cash in connection with the related
redemption or maturity of the Junior Subordinated Debt Securities, Textron
Capital will irrevocably deposit with the Depositary funds sufficient to pay the
applicable Redemption Price and will give the Depositary irrevocable
instructions and authority to pay the Redemption Price to the holders of the
Preferred Securities. See "Book-Entry Only Issuance -- The Depository Trust
Company." If notice of redemption shall have been given and funds deposited as
required, then, immediately prior to the close of business on the date of such
deposit, distributions will cease to accrue and all rights of holders of such
Preferred Securities so called for redemption will cease, except the right of
the holders of such Preferred Securities to receive the Redemption Price but
without interest on such Redemption Price. In the event that any date fixed for
redemption of Preferred Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (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 Redemption Price in respect of Preferred Securities is
improperly withheld or refused and not paid either by Textron Capital, or by
Textron pursuant to the Guarantee, distributions on such Preferred Securities
will continue to accrue at the then
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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 Redemption Price.
In the event that fewer than all of the outstanding Preferred Securities
are to be redeemed, the Preferred Securities will be redeemed pro rata as
described below under "Book-Entry Only Issuance -- The Depository Trust
Company."
Subject to the foregoing and applicable law (including, without limitation,
United States federal securities laws), Textron 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.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of Textron Capital (each a "Liquidation"), the then
holders of the Preferred Securities will be entitled to receive out of the
assets of Textron Capital, after satisfaction of liabilities to creditors,
distributions in an amount equal to the aggregate of the stated liquidation
amount of $25 per Preferred Security plus accrued and unpaid distributions
thereon to the date of payment (the "Liquidation Distribution"), unless, in
connection with such Liquidation, Junior Subordinated Debt Securities in an
aggregate stated principal amount equal to the aggregate stated liquidation
amount of, with an interest rate identical to the distribution rate of, and
accrued and unpaid interest equal to accrued and unpaid distributions on, the
Preferred Securities have been distributed on a PRO RATA basis to the holders of
the Preferred Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because Textron Capital has insufficient assets available to pay in
full the aggregate Liquidation Distribution, then the amounts payable directly
by Textron Capital on the Preferred Securities shall be paid on a PRO RATA
basis. The holders of the Common Securities will be entitled to receive
distributions upon any such dissolution PRO RATA with the holders of the
Preferred Securities, except that if a Declaration Event of Default has occurred
and is continuing, the Preferred Securities shall have a preference over the
Common Securities with regard to such distributions.
Pursuant to the Declaration, Textron Capital shall terminate (i) on
, , the expiration of the term of the Trust, (ii) upon the
bankruptcy of Textron or the holder of the Common Securities, (iii) upon the
filing of a certificate of dissolution or its equivalent with respect to the
holder of the Common Securities or Textron, the filing of a certificate of
cancellation with respect to Textron Capital, or the revocation of the charter
of the holder of the Common Securities or Textron and the expiration of 90 days
after the date of revocation without a reinstatement thereof, (iv) upon the
distribution of Junior Subordinated Debt Securities upon the occurrence of a
Special Event, (v) upon the entry of a decree of a judicial dissolution of the
holder of the Common Securities, Textron or Textron Capital, or (vi) upon the
redemption of all the Trust Securities.
DECLARATION EVENTS OF DEFAULT
An event of default under the Indenture (an "Indenture Event of Default")
constitutes an event of default under the Declaration with respect to the Trust
Securities (a "Declaration Event of Default"); PROVIDED, that pursuant to the
Declaration, the holder of the Common Securities will be deemed to have waived
any Declaration Event of Default with respect to the Common Securities until all
Declaration Events of Default with respect to the Preferred Securities have been
cured, waived or otherwise eliminated. Until such Declaration Events of Default
with respect to the Preferred Securities have been so cured, waived, or
otherwise eliminated, the Institutional Trustee will be deemed to be acting
solely on behalf of the holders of the Preferred Securities and only the holders
of the Preferred Securities will have the right to direct the Institutional
Trustee with respect to certain matters under the Declaration, and therefore the
Indenture.
If the Property Trustee fails to enforce its rights under the Junior
Subordinated Debt Securities, any holder of Preferred Securities may institute a
legal proceeding against Textron to enforce the Property Trustee's rights under
the Subordinated Debt Securities. Notwithstanding the foregoing, if a
Declaration Event of Default has occurred and is continuing and such event is
attributable to the failure of Textron to pay
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interest or principal on the Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
the redemption date), then a holder of Preferred Securities may directly
institute a proceeding for enforcement of payment to such holder directly of the
principal of or interest on the Junior Subordinated Debt Securities 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
Junior Subordinated Debt Securities. The holders of Preferred Securities will
not be able to exercise directly any other remedy available to the holders of
the Junior Subordinated Debt Securities.
Upon the occurrence of a Declaration Event of Default, the Institutional
Trustee as the sole holder of the Junior Subordinated Debt Securities will have
the right under the Indenture to declare the principal of and interest on the
Junior Subordinated Debt Securities to be immediately due and payable. Textron
and Textron Capital are each required to file annually with the Institutional
Trustee an officers' certificate as to its compliance with all conditions and
covenants under the Declaration.
VOTING RIGHTS
Except as described herein, under the Trust Act, the Trust Indenture Act
and under "Description of Trust Guarantees -- Modification of Trust Guarantees;
Assignment" in the accompanying Prospectus, and as otherwise required by law and
the Declaration, the holders of the Preferred Securities will have no voting
rights.
Subject to the requirement of the Institutional Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of 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 Institutional Trustee,
or direct the exercise of any trust or power conferred upon the Institutional
Trustee under the Declaration including the right to direct the Institutional
Trustee, as holder of the Junior Subordinated Debt Securities, to (i) exercise
the remedies available under the Indenture with respect to the Junior
Subordinated Debt Securities, (ii) waive any past Indenture Event of Default
that is waivable under Section 5.13 of the Base Indenture (as defined herein),
or (iii) exercise any right to rescind or annul a declaration that the principal
of all the Junior Subordinated Debt Securities shall be due and payable;
PROVIDED, HOWEVER, that, where a consent or action under the Indenture would
require the consent or act of holders of more than a majority in principal
amount of the Junior Subordinated Debt Securities (a "Super-Majority") affected
thereby, only the holders of at least such Super-Majority in aggregate
liquidation amount of the Preferred Securities may direct the Institutional
Trustee to give such consent or take such action. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debt Securities, any
record holder of Preferred Securities may, after such holder's written request
to the Institutional Trustee to enforce such rights, institute a legal
proceeding directly against Textron to enforce the Institutional Trustee's
rights under the Junior Subordinated Debt Securities without first instituting
any legal proceeding against the Institutional Trustee or any other person or
entity. The Institutional Trustee shall notify all holders of the Preferred
Securities of any notice of default received from the Indenture Trustee with
respect to the Junior Subordinated Debt Securities. Such notice shall state that
such Indenture Event of Default also constitutes a Declaration Event of Default.
Except with respect to directing the time, method and place of conducting a
proceeding for a remedy, the Institutional Trustee shall not take any of the
actions described in clauses (i), (ii) or (iii) above unless the Institutional
Trustee has obtained an opinion of tax counsel to the effect that, as a result
of such action, Textron Capital will not fail to be classified as a grantor
trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of the
Junior Subordinated Debt Securities, is required under the Indenture with
respect to any amendment, modification or termination of the Indenture, the
Institutional Trustee shall request the direction of the holders of the Trust
Securities with respect to such amendment, modification or termination and shall
vote with respect to such amendment, modification or termination as directed by
a majority in liquidation amount of the Trust Securities voting together as a
single class; PROVIDED, HOWEVER, that where a consent under the Indenture would
require the consent of a Super Majority, the Institutional Trustee may only give
such consent at the direction of the holders of at least the proportion in
liquidation amount of the Trust Securities which the relevant Super
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Majority represents of the aggregate principal amount of the Junior Subordinated
Debt Securities outstanding. The Institutional Trustee shall be under no
obligation to take any such action in accordance with the directions of the
holders of the Trust Securities unless the Institutional Trustee has obtained an
opinion of tax counsel to the affect that for the purposes of United States
federal income tax Textron Capital will not be classified as other than a
grantor trust.
A waiver of an Indenture Event of Default will constitute a waiver of the
corresponding Declaration Event of Default.
Any required approval or direction of holders of Preferred Securities may
be given at a separate meeting of holders of Preferred Securities convened for
such purpose, at a meeting of all of the holders of Trust Securities or pursuant
to written consent. The Regular 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 Preferred Securities will be required for Textron Capital to
redeem and cancel Preferred Securities or distribute Junior Subordinated Debt
Securities in accordance with the Declaration.
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 at such time by Textron or any entity directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, Textron, shall not be entitled to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Preferred Securities
were not outstanding.
The procedures by which holders of Preferred Securities may exercise their
voting rights are described below. See "-- Book-Entry Only Issuance -- The
Depository Trust Company" below.
Holders of the Preferred Securities will have no rights to appoint or
remove the Textron Trustees, who may be appointed, removed or replaced solely by
Textron as the indirect or direct holder of all of the Common Securities.
MODIFICATION OF THE DECLARATION
The Declaration may be modified and amended if approved by the Regular
Trustees (and in certain circumstances the Institutional Trustee), provided
that, if any proposed amendment provides for, or the Regular Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration or otherwise or (ii) the dissolution, winding-up or
termination of Textron Capital other than pursuant to the terms of the
Declaration, then the holders of the Trust Securities voting together as a
single 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 the Trust Securities affected thereby;
provided, that, if any amendment or proposal referred to in clause (i) above
would adversely affect only the Preferred Securities or the Common Securities,
then only the affected class will be entitled to vote on such amendment or
proposal and such amendment or proposal shall not be effective except with the
approval of a majority in liquidation amount of such class of Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Declaration if such amendment or modification would (i) cause Textron
Capital to be classified for purposes of United States federal income taxation
as other than a grantor trust, (ii) reduce or otherwise adversely affect the
powers of the Institutional Trustee or (iii) cause Textron Capital to be deemed
an "investment company" which is required to be registered under the 1940 Act.
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MERGERS, CONSOLIDATIONS OR AMALGAMATIONS
Textron Capital may not consolidate, amalgamate, merge with or into, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety, to any corporation or other body, except as
described below. Textron Capital may, with the consent of the Regular Trustees
and without the consent of the holders of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any State; provided, that (i) such successor entity either (x)
expressly assumes all of the obligations of Textron Capital under the Trust
Securities or (y) substitutes for the Preferred Securities other securities
having substantially the same terms as the Trust Securities (the "Successor
Securities"), so long as the Successor Securities rank the same as the Trust
Securities rank with respect to distributions and payments upon liquidation,
redemption and otherwise, (ii) Textron expressly acknowledges a trustee of such
successor entity possessing the same powers and duties as the Institutional
Trustee, in its capacity as the holder of the Junior Subordinated Debt
Securities, (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 another 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 rights,
preferences and privileges of the holders of the Trust Securities (including any
Successor Securities) in any material respect (other than with respect to any
dilution of the holders' interest in the new entity), (vi) such successor entity
has a purpose identical to that of Textron Capital, (vii) prior to such merger,
consolidation, amalgamation or replacement, Textron has received an opinion of a
nationally recognized independent counsel to Textron Capital experienced in such
matters to the effect that, (A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and privileges of
the holders of the Trust Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of the holders'
interest in the new entity), and (B) following such merger, consolidation,
amalgamation or replacement, neither Textron Capital nor such successor entity
will be required to register as an investment company under the 1940 Act and
(viii) Textron guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee and the
Common Securities Guarantee. Notwithstanding the foregoing, Textron Capital
shall not, except with the consent of holders of 100% in liquidation amount of
the Trust 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 Textron Capital or the Successor
Entity to be classified as other than a grantor trust for United States federal
income tax purposes.
BOOK-ENTRY ONLY ISSUANCE-THE DEPOSITORY TRUST COMPANY
The Depository Trust Company ("DTC") will act as securities depositary for
the Preferred Securities. The Preferred Securities will be issued only as
fully-registered securities registered in the name of Cede & Co. (DTC's
nominee). One or more fully-registered global Preferred Securities certificates,
representing the total aggregate number of Preferred Securities, will be issued
and will be deposited with DTC.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to transfer beneficial interests in the global Preferred
Securities as represented by a global certificate.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, 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 Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that its
participants ("Participants") deposit with DTC. DTC also facilitates the
settlement among Participants of securities transactions, such as transfers and
pledges, in deposited securities through electronic computerized book-entry
changes in Participants' accounts, thereby eliminating the need for physical
movement of securities certificates. Direct Participants include
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securities brokers and dealers, banks, trust companies, clearing corporations
and certain other organizations ("Direct Participants"). DTC is owned by a
number of its Direct Participants and by the New York Stock Exchange, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others, such as
securities brokers and dealers, banks and trust companies that clear
transactions through or maintain a direct or indirect custodial relationship
with a Direct Participant either directly or indirectly ("Indirect
Participants"). The rules applicable to DTC and its Participants are on file
with the Securities and Exchange Commission.
Purchases of Preferred Securities within the DTC system must be made by or
through Direct Participants, which will receive a credit for the Preferred
Securities on DTC's records. The ownership interest of each actual purchaser of
each Preferred Security ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from DTC of their purchases, but Beneficial Owners are
expected to receive written confirmations providing details of the transactions,
as well as periodic statements of their holdings, from the Direct or Indirect
Participants through which the Beneficial Owners purchased Preferred Securities.
Transfers of ownership interests in the Preferred Securities are to be
accomplished by entries made on the books of Participants acting on behalf of
Beneficial Owners. Beneficial Owners will not receive certificates representing
their ownership interests in the Preferred Securities, except in the event that
use of the book-entry system for the Preferred Securities is discontinued.
To facilitate subsequent transfers, all the Preferred Securities deposited
by Participants with DTC are registered in the name of DTC's nominee, Cede & Co.
The deposit of Preferred Securities with DTC and their registration in the name
of Cede & Co. effect no change in beneficial ownership. DTC has no knowledge of
the actual Beneficial Owners of the Preferred Securities. DTC's records reflect
only the identity of the Direct Participants to whose accounts such Preferred
Securities are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements
that may be in effect from time to time.
Redemption notices shall be sent to Cede & Co. If less than all of the
Preferred Securities are being redeemed, DTC will reduce the amount of the
interest of each Direct Participant in such Preferred Securities in accordance
with its procedures.
Although voting with respect to the Preferred Securities is limited, in
those cases where a vote is required, neither DTC nor Cede & Co. will itself
consent or vote with respect to Preferred Securities. Under its usual
procedures, DTC would mail an Omnibus Proxy to Textron Capital as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co. consenting
or voting rights to those Direct Participants to whose accounts the Preferred
Securities are credited on the record date (identified in a listing attached to
the Omnibus Proxy). Textron and Textron Capital believe that the arrangements
among DTC, Direct and Indirect Participants, and Beneficial Owners will enable
the Beneficial Owners to exercise rights equivalent in substance to the rights
that can be directly exercised by a holder of a beneficial interest in Textron
Capital.
Distribution payments on the Preferred Securities will be made to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices, as is the case with securities
held for the account of customers in bearer form or registered in "street name,"
and such payments will be the responsibility of such Participant and not of DTC,
Textron Capital or Textron, subject to any statutory or regulatory requirements
to the contrary that may be in effect from time to time. Payment of
distributions to DTC is the responsibility of Textron Capital, disbursement of
such payments to Direct Participants is the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners is the responsibility of
Direct and Indirect Participants.
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Except as provided herein, a Beneficial Owner in a global Preferred
Security certificate will not be entitled to receive physical delivery of
Preferred Securities. Accordingly, each Beneficial Owner must rely on the
procedures of DTC to exercise any rights under the Preferred Securities.
DTC may discontinue providing its services as securities depositary with
respect to the Preferred Securities at any time by giving reasonable notice to
Textron Capital. Under such circumstances, in the event that a successor
securities depositary is not obtained, Preferred Securities certificates are
required to be printed and delivered. Additionally, the Regular Trustees (with
the consent of Textron) may decide to discontinue use of the system of
book-entry transfers through DTC (or any successor depositary) with respect to
the Preferred Securities. In that event, certificates for the Preferred
Securities will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Textron and Textron Capital believe to be
reliable, but neither Textron nor Textron Capital takes responsibility for the
accuracy thereof.
INFORMATION CONCERNING THE INSTITUTIONAL TRUSTEE
The Institutional Trustee, prior to the occurrence of a default with
respect to the Trust Securities, undertakes to perform only such duties as are
specifically set forth in the Declaration and, after default, shall exercise the
same degree of care as a prudent individual would exercise in the conduct of his
or her own affairs. Subject to such provisions, the Institutional Trustee is
under no obligation to exercise any of the powers vested in it by the
Declaration at the request of any holder of Preferred Securities, unless offered
reasonable indemnity by such holder against the costs, expenses and liabilities
which might be incurred thereby. The holders of Preferred Securities will not be
required to offer such indemnity in the event such holders, by exercising their
voting rights, direct the Institutional Trustee to take any action following a
Declaration Event of Default.
PAYING AGENT
In the event that the Preferred Securities do not remain in book-entry only
form, the following provisions would apply:
The Institutional Trustee will act as paying agent and may designate an
additional or substitute paying agent at any time.
Registration of transfers of Preferred Securities will be effected without
charge by or on behalf of Textron Capital, but upon payment (with the giving of
such indemnity as Textron Capital or Textron may require) in respect of any tax
or other government charges that may be imposed in relation to it.
Textron Capital will not be required to register or cause to be registered
the transfer of Preferred Securities after such Preferred Securities have been
called for redemption.
GOVERNING LAW
The Declaration and the Preferred Securities will be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
MISCELLANEOUS
The Regular Trustees are authorized and directed to operate Textron Capital
in such a way so that Textron Capital will not be required to register as an
"investment company" under the 1940 Act or characterized as other than a grantor
trust for United States federal income tax purposes. Textron is authorized and
directed to conduct its affairs so that the Junior Subordinated Debt Securities
will be treated as indebtedness of Textron for United States federal income tax
purposes. In this connection, Textron and the Regular Trustees are authorized to
take any action, not inconsistent with applicable law, the certificate of trust
of Textron Capital or the certificate of incorporation of Textron, that each of
Textron and the Regular Trustees determine in their discretion to be necessary
or desirable to achieve such end, as long as such action does not adversely
affect the interests of the holders of the Preferred Securities or vary the
terms thereof.
Holders of the Preferred Securities have no preemptive rights.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
Set forth below is a description of the specific terms of the Junior
Subordinated Debt Securities in which Textron Capital will invest the proceeds
from the issuance and sale of the Trust Securities. This description supplements
the description of the general terms and provisions of the Junior Subordinated
Debt Securities set forth in the accompanying Prospectus under the caption
"Description of Debt Securities." The following description does not purport to
be complete and is subject to, and is qualified in its entirety by reference to,
the description in the accompanying Prospectus and the Junior Subordinated
Indenture, dated as of , 1996, (the "Base Indenture") between
Textron and The Chase Manhattan Bank, N.A., as Trustee (the "Indenture
Trustee"), as supplemented by a First Supplemental Indenture, dated as of
, 1996 (the Base Indenture, as so supplemented, is hereinafter
referred to as the "Indenture"), the forms of which are filed as Exhibits to the
Registration Statement of which this Prospectus Supplement and the accompanying
Prospectus form a part. Certain capitalized terms used herein are defined in the
Indenture.
Under certain circumstances involving the dissolution of Textron Capital
following the occurrence of a Special Event, Junior Subordinated Debt Securities
may be distributed to the holders of the Trust Securities in liquidation of
Textron Capital. See "Description of the Preferred Securities -- Special Event
Redemption or Distribution."
If the Junior Subordinated Debt Securities are distributed to the holders
of the Preferred Securities, Textron will use its best efforts to have the
Junior Subordinated Debt Securities listed on the New York Stock Exchange or on
such other national securities exchange or similar organization on which the
Preferred Securities are then listed or quoted.
GENERAL
The Junior Subordinated Debt Securities will be issued as unsecured debt
under the Indenture. The Junior Subordinated Debt Securities will be limited in
aggregate principal amount to approximately $ , such amount being the
sum of the aggregate stated liquidation of the Preferred Securities and the
capital contributed by Textron in exchange for the Common Securities (the
"Textron Payment").
The Junior Subordinated Debt Securities are not subject to a sinking fund
provision. The entire principal amount of the Junior Subordinated Debt
Securities will mature and become due and payable, together with any accrued and
unpaid interest thereon including Compound Interest (as defined herein) and
Additional Interest (as defined herein), if any, on , .
If Junior Subordinated Debt Securities are distributed to holders of
Preferred Securities in liquidation of such holders' interests in Textron
Capital, such Junior Subordinated Debt Securities will initially be issued in
the form of one or more Global Securities (as defined under "Book-Entry and
Settlement" below). As described herein, under certain limited circumstances,
Junior Subordinated Debt Securities may be issued in certificated form in
exchange for a Global Security. See "Book-Entry and Settlement" below. In the
event that Junior Subordinated Debt Securities are issued in certificated form,
such Junior Subordinated Debt Securities will be in denominations of $25 and
integral multiples thereof and may be transferred or exchanged at the offices
described below. Payments on Junior Subordinated Debt Securities issued as a
Global Security will be made to DTC, a successor depositary or, in the event
that no depositary is used, to a Paying Agent for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount at the corporate trust
office of the Indenture Trustee in , New York; PROVIDED, that
payment of interest may be made at the option of Textron by check mailed to the
address of the persons entitled thereto.
There are no covenants or provisions in the Indenture which would afford
the holders of the Junior Subordinated Debt Securities protection in the event
of a highly leveraged transaction, reorganization, restructuring, merger or
similar transaction involving Textron that may adversely affect such holders.
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SUBORDINATION
The Indenture provides that the Junior Subordinated Debt Securities are
subordinated and junior in right of payment to all Senior Indebtedness of
Textron. No payment of principal (including redemption payments), premium, if
any, or interest on the Junior Subordinated Debt Securities may be made if (i)
any Senior Indebtedness of Textron is not paid when due, (ii) any applicable
grace period with respect to such default has ended and such default has not
been cured or waived or ceased to exist, or (iii) the maturity of any Senior
Indebtedness of Textron has been accelerated because of a default. Upon any
distribution of assets of Textron to creditors upon any dissolution, winding-up,
liquidation or reorganization, whether voluntary or involuntary, or in
bankruptcy, insolvency, receivership or other proceedings, all principal,
premium, if any, and interest due or to become due on all Senior Indebtedness of
Textron must be paid in full before the holders of Junior Subordinated Debt
Securities are entitled to receive or retain any payment. Upon satisfaction of
all claims of all Senior Indebtedness then outstanding, the rights of the
holders of the Junior Subordinated Debt Securities will be subrogated to the
rights of the holders of Senior Indebtedness of Textron to receive payments or
distributions applicable to Senior Indebtedness until all amounts owing on the
Junior Subordinated Debt Securities are paid in full.
The term "Senior Indebtedness" means, with respect to Textron, (i) the
principal, premium, if any, and interest in respect of (A) indebtedness of such
obligor, for money borrowed and (B) indebtedness evidenced by securities,
debentures, bonds or other similar instruments issued by such obligor, (ii) all
capital lease obligations of such obligor, (iii) all obligations of such obligor
issued or assumed as the deferred purchase price of property, all conditional
sale obligations of such obligor and all obligations of such obligor under any
title retention agreement (but excluding trade accounts payable arising in the
ordinary course of business), (iv) all obligations of such obligor for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction, (v) all obligations of the type referred
to in clauses (i) through (iv) above of other persons for the payment of which
such obligor is responsible or liable as obligor, guarantor or otherwise and
(vi) all obligations of the type referred to in clauses (i) through (v) above of
other persons secured by any lien on any property or asset of such obligor
(whether or not such obligation is assumed by such obligor), except for (1) any
such indebtedness that is by its terms subordinated to or pari passu with the
Junior Subordinated Debt Securities and (2) any indebtedness between or among
such obligor or its affiliates, including all other debt securities and
guarantees in respect of those debt securities, issued to (a) any other Textron
Trust or a trustee of such trust and (b) any other trust, or a trustee of such
trust, partnership or other entity affiliated with Textron that is a financing
vehicle of Textron (a "financing entity") in connection with the issuance by
such financial entity of Preferred Securities or other securities that rank pari
passu with, or junior to, the Preferred Securities. Such Senior Indebtedness
shall continue to be Senior Indebtedness and be entitled to the benefits of the
subordination provisions irrespective of any amendment, modification or waiver
of any term of such Senior Indebtedness.
The Indenture does not limit the aggregate amount of Senior Indebtedness
that may be issued by Textron. As of , 1995, Senior Indebtedness of
Textron aggregated approximately $ .
OPTIONAL REDEMPTION
Textron shall have the right to redeem the Junior Subordinated Debt
Securities, in whole or in part, from time to time, on or after ,
, or at any time in certain circumstances upon the occurrence of a Tax
Event as described under "Description of the Preferred Securities -- Special
Event Redemption or Distribution," upon not less than 30 nor more than 60 days
notice, at a redemption price equal to 100% of the principal amount to be
redeemed plus any accrued and unpaid interest, including Additional Interest, if
any, to the redemption date. If a partial redemption of the Preferred Securities
resulting from a partial redemption of the Junior Subordinated Debt Securities
would result in the delisting of the Preferred Securities, Textron may only
redeem the Junior Subordinated Debt Securities in whole.
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INTEREST
Each Junior Subordinated Debt Security shall bear interest at the rate of
% per annum from the original date of issuance, payable quarterly in arrears
on , , and of each year (each an
"Interest Payment Date"), commencing , 1996, to the person in whose
name such Junior Subordinated Debt Security is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. In the event the Junior Subordinated Debt Securities
shall not continue to remain in book-entry only form, Textron shall have the
right to select record dates, which shall be more than one Business Day prior to
the Interest Payment Date.
The amount of interest payable for any period will be computed on the basis
of a 360-day year of twelve 30-day months. 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 per 30-day
month. In the event that any date on which interest is payable on the Junior
Subordinated Debt Securities 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),
except that, if such Business Day is in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
Textron shall have the right at any time, and from time to time, during the
term of the Junior Subordinated Debt Securities, to defer payments of interest
by extending the interest payment period for a period not exceeding 20
consecutive quarters, at the end of which Extension Period, Textron shall pay
all interest then accrued and unpaid (including any Additional Interest, as
herein defined) together with interest thereon compounded quarterly at the rate
specified for the Junior Subordinated Debt Securities to the extent permitted by
applicable law ("Compound Interest"); PROVIDED, that during any such Extension
Period, (a) Textron will not declare or pay any dividend on, make any
distributions with respect to, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of its capital stock or make any
guarantee payment with respect thereto, and (b) Textron shall not make any
payment of interest, principal (or premium, if any, on) or repay, repurchase or
redeem any debt securities issued by Textron which rank pari passu with or
junior to such Junior Subordinated Debt Securities. The Indenture, however, will
except from the foregoing (i) any stock dividends paid by Textron where the
dividend stock is the same stock as that on which the dividend is being paid and
(ii) any purchases by Textron of its common stock from Paul Revere or its
subsidiaries pursuant to the Paul Revere Stock Purchase Agreements. Prior to the
termination of any Extension Period, Textron may further defer payments of
interest by extending such Extension Period; provided, however, that such
Extension Period, including all such previous and further extensions, may not
exceed 20 consecutive quarterly interest periods. Upon the termination of any
Extension Period and the payment of all amounts then due, Textron may commence a
new Extension Period, subject to the terms set forth in this section. No
interest during an Extension Period, except at the end thereof, shall be due and
payable. Textron has no present intention of exercising its right to defer
payments of interest by extending the interest payment period on the Junior
Subordinated Debt Securities. If the Institutional Trustee shall be the sole
holder of the Junior Subordinated Debt Securities, Textron shall give the
Regular Trustees and the Institutional Trustee notice of its selection of such
Extension Period one Business Day prior to the earlier of (i) the date
distributions on the Preferred Securities are payable or (ii) the date the
Regular Trustees are required to give notice to the New York Stock Exchange (or
other applicable self-regulatory organization) or to holders of the Preferred
Securities of the record date or the date such distribution is payable. The
Regular Trustees shall give notice of Textron's selection of such Extension
Period to the holders of the Preferred Securities. If the Institutional Trustee
shall not be the sole holder of the Junior Subordinated Debt Securities, Textron
shall give the holders of the Junior Subordinated Debt Securities notice of its
selection of such Extension Period ten Business Days prior to the earlier of (i)
the Interest Payment Date or (ii) the date upon which Textron is required to
give notice to the New York Stock Exchange (or other applicable self-regulatory
organization) or to holders of the Junior Subordinated Debt Securities of the
record or payment date of such related interest payment.
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ADDITIONAL INTEREST
If at any time Textron Capital shall be 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
such case, Textron will pay as additional interest ("Additional Interest") such
additional amounts as shall be required so that the net amounts received and
retained by Textron Capital after paying any such taxes, duties, assessments or
other governmental charges will be not less than the amounts Textron Capital
would have received had no such taxes, duties, assessments or other governmental
charges been imposed.
INDENTURE EVENTS OF DEFAULT
If any Indenture Event of Default shall occur and be continuing, the
Institutional Trustee, as the holder of the Junior Subordinated Debt Securities,
will have the right to declare the principal of and the interest on the Junior
Subordinated Debt Securities (including any Compound Interest and Additional
Interest, if any) 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 Debt Securities. See "Description of Debt
Securities -- Events of Default" and " -- Particular Terms of the Junior
Subordinated Debt Securities" in the accompanying Prospectus for a description
of the Events of Default. An Indenture Event of Default also constitutes a
Declaration Event of Default. The holders of Preferred Securities in certain
circumstances have the right to direct the Institutional Trustee to exercise its
rights as the holder of the Junior Subordinated Debt Securities. See
"Description of the Preferred Securities -- Declaration Events of Default" and
" -- Voting Rights."
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of Textron to pay
interest or principal on the Junior Subordinated Debt Securities on the date
such interest or principal is otherwise payable, Textron acknowledges that, in
such event, a holder of Preferred Securities may directly institute a proceeding
for enforcement of such payment to such holder directly of the principal of or
interest on the Junior Subordinated Debt Securities 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 Junior Subordinated
Debt Securities. The holders of Preferred Securities will not be able to
exercise directly any other remedy available to the holders of the Junior
Subordinated Debt Securities.
BOOK-ENTRY AND SETTLEMENT
If distributed to holders of Preferred Securities in connection with the
involuntary or voluntary dissolution, winding-up or liquidation of Textron
Capital as a result of the occurrence of a Special Event, the Junior
Subordinated Debt Securities will be issued in the form of one or more global
certificates (each a "Global Security") registered in the name of the depositary
or its nominee. Except under the limited circumstances described below, Junior
Subordinated Debt Securities represented by the Global Security will not be
exchangeable for, and will not otherwise be issuable as, Junior Subordinated
Debt Securities in definitive form. The Global Securities described above may
not be transferred except by the depositary to a nominee of the depositary or by
a nominee of the depositary to the depositary or another nominee of the
depositary or to a successor depositary or its nominee.
The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
laws may impair the ability to transfer beneficial interests in such a Global
Security.
Except as provided below, owners of beneficial interests in such a Global
Security will not be entitled to receive physical delivery of Junior
Subordinated Debt Securities in definitive form and will not be considered the
Holders (as defined in the Indenture) thereof for any purpose under the
Indenture, and no Global Security representing Junior Subordinated Debt
Securities shall be exchangeable, except for another Global Security of like
denomination and tenor to be registered in the name of the depositary or its
nominee or to a successor depositary or its nominee. Accordingly, each
Beneficial Owner must rely on the procedures of the depositary
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or if such person is not a Participant, on the procedures of the Participant
through which such person owns its interest to exercise any rights of a holder
under the Indenture.
THE DEPOSITARY
If Junior Subordinated Debt Securities are distributed to holders of
Preferred Securities in liquidation of such holders' interests in Textron
Capital, DTC will act as securities depositary for the Junior Subordinated Debt
Securities. For a description of DTC and the specific terms of the depositary
arrangements, see "Description of the Preferred Securities -- Book-Entry Only
Issuance -- The Depository Trust Company." As of the date of this Prospectus
Supplement, the description therein of DTC's book-entry system and DTC's
practices as they relate to purchases, transfers, notices and payments with
respect to the Preferred Securities apply in all material respects to any debt
obligations represented by one or more Global Securities held by DTC. Textron
may appoint a successor to DTC or any successor depositary in the event DTC or
such successor depositary is unable or unwilling to continue as a depository for
the Global Securities.
None of Textron, Textron Capital, the Indenture Trustee, any paying agent
and any other agent of Textron or the Indenture Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Security
for such Junior Subordinated Debt Securities or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
DISCONTINUANCE OF THE DEPOSITARY'S SERVICES
A Global Security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than the depositary or its
nominee only if (i) the depositary notifies Textron that it is unwilling or
unable to continue as a depositary for such Global Security and no successor
depositary shall have been appointed, (ii) the depositary, at any time, ceases
to be a clearing agency registered under the Exchange Act at which time the
depositary is required to be so registered to act as such depositary and no
successor depositary shall have been appointed, (iii) Textron, in its sole
discretion, determines that such Global Security shall be so exchangeable or
(iv) there shall have occurred an Event of Default with respect to such Junior
Subordinated Debt Securities. Any Global Security that is exchangeable pursuant
to the preceding sentence shall be exchangeable for Junior Subordinated Debt
Securities registered in such names as the depositary shall direct. It is
expected that such instructions will be based upon directions received by the
depositary from its Participants with respect to ownership of beneficial
interests in such Global Security.
MISCELLANEOUS
The Indenture will provide that Textron will pay all fees and expenses
related to (i) the offering of the Trust Securities and the Junior Subordinated
Debt Securities, (ii) the organization, maintenance and dissolution of Textron
Capital, (iii) the retention of the Textron Trustees and (iv) the enforcement by
the Institutional Trustee of the rights of the holders of the Preferred
Securities. The payment of such fees and expenses will be fully and
unconditionally guaranteed by Textron.
EFFECT OF OBLIGATIONS UNDER THE
JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
As set forth in the Declaration, the sole purpose of Textron Capital is to
issue the Trust Securities evidencing undivided beneficial interests in the
assets of Textron Capital, and to invest the proceeds from such issuance and
sale in the Junior Subordinated Debt Securities.
As long as payments of interest and other payments are made when due on the
Junior Subordinated Debt Securities, such payments will be sufficient to cover
distributions and payments due on the Trust Securities because of the following
factors: (i) the aggregate principal amount of Junior Subordinated Debt
Securities will be equal to the sum of the aggregate stated liquidation amount
of the Trust Securities; (ii) the interest rate and the interest and other
payment dates on the Junior Subordinated Debt Securities will match the
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distribution rate and distribution and other payment dates for the Preferred
Securities; (iii) Textron shall pay all, and Textron Capital shall not be
obligated to pay, directly or indirectly, all costs, expenses, debt and
obligations of Textron Capital other than with respect to the Trust Securities;
and (iv) the Declaration further provides that the Textron Trustees shall not
cause or permit Textron Capital to, among other things, engage in any activity
that is not consistent with the purposes of Textron Capital.
Payments of distributions (to the extent funds therefor are available) and
other payments due on the Preferred Securities (to the extent funds therefor are
available) are guaranteed by Textron as and to the extent set forth under
"Description of Trust Guarantees" in the accompanying Prospectus. If Textron
does not make interest payments on the Junior Subordinated Debt Securities
purchased by Textron Capital, it is expected that Textron Capital will not have
sufficient funds to pay distributions on the Preferred Securities. The Guarantee
is a full and unconditional guarantee from the time of its issuance but does not
apply to any payment of distributions unless and until Textron Capital has
sufficient funds for the payment of such distributions.
The Guarantee covers the payment of distributions and other payments on the
Preferred Securities only if and to the extent that Textron has made a payment
of interest or principal on the Junior Subordinated Debt Securities held by
Textron Capital as its sole asset. The Guarantee, when taken together with
Textron's obligations under the Junior Subordinated Debt Securities and the
Indenture and its obligations under the Declaration, including its obligations
to pay costs, expenses, debts and liabilities of Textron Capital (other than
with respect to the Trust Securities), provide a full and unconditional
guarantee of amounts on the Preferred Securities.
If Textron fails to make interest or other payments on the Junior
Subordinated Debt Securities when due (taking account of any Extension Period),
the Declaration provides a mechanism whereby the holders of the Preferred
Securities, using the procedures described in "Description of the Preferred
Securities -- Book Entry Only Issuance -- The Depository Trust Company" and
" -- Voting Rights," may direct the Institutional Trustee to enforce its rights
under the Junior Subordinated Debt Securities. If the Institutional Trustee
fails to enforce its rights under the Junior Subordinated Debt Securities, any
holder of Preferred Securities may institute a legal proceeding against Textron
to enforce the Institutional Trustee's rights under the Junior Subordinated Debt
Securities without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if a Declaration Event of Default has occurred and is continuing and
such event is attributable to the failure of Textron to pay interest or
principal on the Junior Subordinated Debt Securities 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 such payment to such holder of the principal of or
interest on the Junior Subordinated Debt Securities 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 Junior Subordinated
Debt Securities. Textron, under the Guarantee, acknowledges that the Guarantee
Trustee shall enforce the Guarantee on behalf of the holders of the Preferred
Securities. If Textron fails to make payments under the Guarantee, the Guarantee
provides a mechanism whereby the holders of the Preferred Securities may direct
the Guarantee Trustee to enforce its rights thereunder. If the Guarantee Trustee
fails to enforce the Guarantee, any holder of Preferred Securities may institute
a legal proceeding directly against Textron to enforce the Guarantee Trustee's
rights under the Guarantee without first instituting a legal proceeding against
Textron Capital, the Guarantee Trustee, or any other person or entity.
Textron and Textron Capital believe that the above mechanisms and
obligations, taken together, are equivalent to a full and unconditional
guarantee by Textron of payments due on the Preferred Securities. See
"Description of Trust Guarantees -- General" in the accompanying Prospectus.
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UNITED STATES FEDERAL INCOME TAXATION
GENERAL
In the opinion of Skadden, Arps, Slate, Meagher & Flom, special tax counsel
to Textron and Textron Capital, the following is a summary of the material
United States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities. Unless otherwise stated, this summary deals
only with Preferred Securities held as capital assets by holders who purchase
the Preferred Securities upon original issuance ("Initial Holders"). It does not
deal with special classes of holders such as banks, thrifts, real estate
investment trusts, regulated investment companies, insurance companies, dealers
in securities or currencies, tax-exempt investors, persons that have a
functional currency other than the U.S. Dollar or persons that will hold the
Preferred Securities as a position in a "straddle," as part of a "synthetic
security" or "hedge," as part of a "conversion transaction" or other integrated
investment, or as other than a capital asset. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the Preferred Securities. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations thereunder and
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis.
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBT SECURITIES
In connection with the issuance of the Junior Subordinated Debt Securities,
Skadden, Arps, Slate, Meagher & Flom, special tax counsel to Textron and Textron
Capital, will render its opinion generally to the effect that, 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, the Junior Subordinated Debt Securities held by Textron Capital
will be classified for United States federal income tax purposes as indebtedness
of Textron.
CLASSIFICATION OF TEXTRON CAPITAL
In connection with the issuance of the Preferred Securities, Skadden, Arps,
Slate, Meagher & Flom, special tax counsel to Textron and Textron Capital, will
render its opinion generally to the effect that, 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, Textron Capital will be classified for United States
federal income tax purposes as a grantor trust and not as an association taxable
as a corporation. Accordingly, for United States federal income tax purposes,
each holder of Preferred Securities generally will be considered the owner of an
undivided interest in the Junior Subordinated Debt Securities, and each holder
will be required to include in its gross income any OID accrued with respect to
its allocable share of those Junior Subordinated Debt Securities.
ORIGINAL ISSUE DISCOUNT
Because Textron has the option, under the terms of the Junior Subordinated
Debt Securities, to defer payments of interest by extending interest payment
periods for up to 20 quarters, all of the stated interest payments on the Junior
Subordinated Debt Securities will treated as "original issue discount." However,
if the "issue price" of the Junior Subordinated Debt Securities for federal
income tax purposes is higher or lower than their $25 principal amount, the
total amount of OID reportable by any holder may differ from the amount of
stated interest. Holders of debt instruments issued with OID must include that
discount in income on an economic accrual basis before the receipt of cash
attributable to the interest, regardless of their method of tax accounting.
Generally, all of a holder's taxable interest income with respect to the Junior
Subordinated Debt Securities will be accounted for as OID, and actual
distributions of stated interest will not be reported as taxable income. The
amount of OID that accrues in any month will approximately equal the amount of
the interest that accrues on the Junior Subordinated Debt Securities in that
month at the stated interest rate unless the "issue price" is higher or lower
than $25. In the event that the interest payment period is extended, holders
will accrue OID on a current basis in an aggregate amount approximately equal to
the amount of the
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interest payment due at the end of the extended interest payment period
(including Compound Interest) on an economic accrual basis over the length of
the extended interest period and any holders who dispose of Preferred Securities
prior to the record date for the payment of interest following such extended
interest payment period will not receive from Textron Capital any cash related
thereto.
Because income on the Preferred Securities will constitute OID, corporate
holders of Preferred Securities will not be entitled to a dividends-received
deduction with respect to any income recognized with respect to the Preferred
Securities.
MARKET DISCOUNT AND BOND PREMIUM
Holders of Preferred Securities other than Initial Holders may be
considered to have acquired their undivided interests in the Junior Subordinated
Debt Securities with market discount or acquisition premium as such phrases are
defined for United States federal income tax purposes. Such holders are advised
to consult their tax advisors as to the income tax consequences of the
acquisition, ownership and disposition of the Preferred Securities.
RECEIPT OF JUNIOR SUBORDINATED DEBT SECURITIES OR CASH UPON LIQUIDATION OF
TEXTRON CAPITAL
Under certain circumstances, as described under the caption "Description of
the Preferred Securities -- Special Event Redemption or Distribution," Junior
Subordinated Debt Securities may be distributed to holders in exchange for the
Preferred Securities and in liquidation of Textron Capital. Under current law,
such a distribution, for United States federal income tax purposes, would be
treated as a non-taxable event to each holder, and each holder would receive an
aggregate tax basis in the Junior Subordinated Debt Securities equal to such
holder's aggregate tax basis in its Preferred Securities. A holder's holding
period in the Junior Subordinated Debt Securities so received in liquidation of
Textron Capital would include the period during which the Preferred Securities
were held by such holder.
Under certain circumstances described herein (see "Description of the
Preferred Securities"), the Junior Subordinated Debt Securities may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition of the redeemed Preferred Securities, and a holder could recognize
gain or loss as if it sold such redeemed Preferred Securities for cash. See
"United States Federal Income Taxation -- Sales of Preferred Securities."
SALES OF PREFERRED SECURITIES
A holder that sells Preferred Securities will be considered to have
disposed of all or part of its pro rata share of the Junior Subordinated Debt
Securities, and will recognize gain or loss equal to the difference between its
adjusted tax basis in the Preferred Securities and the amount realized on the
sale of such Preferred Securities. A holder's adjusted tax basis in the
Preferred Securities generally will be its initial purchase price increased by
OID previously includible in such holder's gross income to the date of
disposition and decreased by payments received on the Preferred Securities. Such
gain or loss generally will be a capital gain or loss (except to the extent of
any accrued market discount with respect to such holder's pro rata share of the
Junior Subordinated Debt Securities not previously included in income -- see
"Market Discount and Bond Premium" above) and generally will be a long-term
capital gain or loss if the Preferred Securities have been held for more than
one year.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Junior Subordinated Debt Securities. A holder who disposes of his Preferred
Securities between record dates for payments of distributions thereon will be
required to include accrued but unpaid interest on the Junior Subordinated Debt
Securities to the date of disposition in income as ordinary income, and to add
such amount to his adjusted tax basis in his pro rata share of the underlying
Junior Subordinated Debt Securities deemed disposed of. To the extent the
selling price is less than the holder's adjusted tax basis (which will include,
in the form of OID, all accrued but unpaid interest) a holder
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will recognize a capital loss. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes.
PROPOSED TAX LEGISLATION
On December 7, 1995, as part of President Clinton's Seven-Year Balanced
Budget Proposal, the Treasury Department proposed legislation (the "Proposed
Legislation") that would treat certain debt instruments issued on or after
December 7, 1995, including debt instruments such as the Junior Subordinated
Debt Securities, as equity for United States federal income tax purposes.
However, on December 19, 1995, the Treasury Department stated its intention to
include as part of the Proposed Legislation transition relief for debt
instruments issued pursuant to a registration statement filed with the SEC on or
before December 7, 1995, to the extent of the aggregate amount of such debt
instruments described in the registration statement. Based on the Treasury
Department's statement, it is expected that the Proposed Legislation, if enacted
without substantial modifications, would not apply to the Junior Subordinated
Debt Securities. There can be no assurances, however, that the Proposed
Legislation, if enacted, will include transition relief applicable to the Junior
Subordinated Debt Securities or that other legislation enacted after the date
hereof will not otherwise adversely affect the tax treatment of the Junior
Subordinated Debt Securities, result in the distribution of the Junior
Subordinated Debt Securities to holders of the Trust Securities or, in certain
limited circumstances, the redemption of such securities by Textron. [See
"Description of Preferred Securities -- Special Event Redemption or
Distribution."]
UNITED STATES ALIEN HOLDERS
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is, as to the United
States, a foreign corporation, a non-resident alien individual, a foreign
partnership, or a non-resident fiduciary of a foreign estate or trust.
Under present United States federal income tax law: (i) payments by Textron
Capital or any of its paying agents to any holder of a Preferred Security who or
which is a United States Alien Holder will not be subject to United States
federal withholding tax; provided that, (a) the beneficial owner of the
Preferred Security does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of Textron entitled to vote,
(b) the beneficial owner of the Preferred Security is not a controlled foreign
corporation that is related to Textron through stock ownership, and (c) either
(A) the beneficial owner of the Preferred Security certifies to Textron Capital
or its agent, under penalties of perjury, that it is not a United States holder
and provides its name and address or (B) a securities clearing organization,
bank or other financial institution that holds customers' securities in the
ordinary course of its trade or business (a "Financial Institution"), and holds
the Preferred Security in such capacity, certifies to Textron Capital or its
agent, under penalties of perjury, that such statement has been received from
the beneficial owner by it or by a Financial Institution between it and the
beneficial owner and furnishes Textron Capital or its agent with a copy thereof;
and (ii) a United States Alien Holder of a Preferred Security will not be
subject to United States federal withholding tax on any gain realized upon the
sale or other disposition of a Preferred Security.
INFORMATION REPORTING TO HOLDERS
Subject to the qualifications discussed below, income on the Preferred
Securities will be reported to holders on Forms 1099, which forms should be
mailed to holders of Preferred Securities by January 31 following each calendar
year.
Textron Capital will be obligated to report annually to Cede & Co., as
holder of record of the Preferred Securities, the OID related to the Junior
Subordinated Debt Securities that accrued during the year. Textron Capital
currently intends to report such information on Form 1099 prior to January 31
following each calendar year even though Textron Capital is not legally required
to report to record holders until April 15 following each calendar year. The
Underwriters have indicated to Textron Capital that, to the extent that they
hold Preferred Securities as nominees for beneficial holders, they currently
expect to report to such beneficial holders on Forms 1099 by January 31
following each calendar year. Under current law, holders of Preferred Securities
who hold as nominees for beneficial holders will not have any obligation to
report information
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regarding the beneficial holders to Textron Capital. Textron Capital, moreover,
will not have any obligation to report to beneficial holders who are not also
record holders. Thus, beneficial holders of Preferred Securities who hold their
Preferred Securities through the Underwriters will receive Forms 1099 reflecting
the income on their Preferred Securities from such nominee holders rather than
Textron Capital.
BACKUP WITHHOLDING
Payments made on, and proceeds from the sale of, the Preferred Securities
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 United States federal income tax, provided the
required information is provided to the Service.
THE UNITED STATES 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 TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL
OR OTHER TAX LAWS.
S-34
<PAGE> 35
UNDERWRITING
<TABLE>
Under the terms and subject to the conditions of the Underwriting Agreement
dated , 1996, each Underwriter named below has severally agreed to
purchase from the Trust, and the Trust has agreed to sell to such Underwriter,
the number of Preferred Securities set forth opposite the name of such
Underwriter below.
<CAPTION>
NUMBER OF
UNDERWRITER PREFERRED SECURITIES
----------- --------------------
<S> <C>
Smith Barney Inc. ..................................................
---------
Total.....................................................
=========
</TABLE>
The Underwriters are obligated to take and pay for the total number of
Preferred Securities offered hereby if any such Preferred Securities are
purchased. In the event of default by any Underwriter, the Underwriting
Agreement provides that, in certain circumstances, purchase commitments of the
non-defaulting Underwriters may be increased or the Underwriting Agreement may
be terminated.
The Underwriters have advised the Trust that they propose initially to
offer the Preferred Securities to the public at the Initial Public Offering
Price set forth on the cover page of this Prospectus Supplement, and to certain
dealers at a price that represents a concession not in excess of per
Preferred Security. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of per Preferred Security to certain other
dealers. After the Preferred Securities are released for sale to the public, the
public offering price and such concessions may be changed by the Underwriters.
The Underwriters have in the past provided, and may in the future provide,
investment banking services to the Company.
The Underwriting Agreement provides that the Trust and Textron will
indemnify the several Underwriters against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, and to make certain
contributions in respect thereof.
The Trust and Textron have agreed, during the period beginning on the date
of the Underwriting Agreement and continuing to and including the date that is
days after the closing date for the purchase of the Preferred Securities, not
to offer, sell, contract to sell or otherwise dispose of any preferred
securities, any preferred stock or any other securities (including any backup
undertakings) of Textron or Preferred Securities of the Trust, in each case that
are substantially similar to the Preferred Securities, or any securities
convertible into or exchangeable for the Preferred Securities or such
substantially similar securities of either the Trust or Textron, without the
prior written consent of Smith Barney Inc.
LEGAL MATTERS
The validity of the Junior Subordinated Debt Securities, the Guarantee and
certain matters relating thereto will be passed upon on behalf of Textron by
Michael D. Cahn, Assistant General Counsel -- Corporate of Textron. The validity
of the Preferred Securities and certain matters relating thereto will be passed
upon on behalf of Textron Capital by Skadden, Arps, Slate, Meagher & Flom, New
York, New York. Certain legal matters will be passed upon for the Underwriters
by Davis Polk & Wardwell, New York, New York. Certain United States federal
income taxation matters will be passed upon for Textron and Textron Capital by
Skadden, Arps, Slate, Meagher & Flom, New York, New York.
S-35
<PAGE> 36
===============================================================================
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE ACCOMPANYING
PROSPECTUS, IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE, ANY SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY TEXTRON
INC., TEXTRON CAPITAL I OR ANY UNDERWRITER, DEALER OR AGENT. THIS PROSPECTUS
SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT CONSTITUTE AN OFFER TO SELL OR
A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY BY ANYONE
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF TEXTRON INC. OR TEXTRON CAPITAL
I SINCE THE DATE HEREOF.
------------------------
<TABLE>
TABLE OF CONTENTS
<CAPTION>
PAGE
----
<S> <C>
PROSPECTUS SUPPLEMENT
The Company........................... S-4
Textron Capital I..................... S-5
Risk Factors.......................... S-6
Textron Inc. Summary Financial Data... S-11
Capitalization of Textron Parent
Company Borrowing Group............. S-13
Ratio of Income to Fixed Charges...... S-14
Accounting Treatment.................. S-14
Use of Proceeds....................... S-14
Description of the Preferred
Securities.......................... S-15
Description of the Junior Subordinated
Debt Securities..................... S-25
Effect of Obligations Under the Junior
Subordinated Debt Securities and the
Guarantee........................... S-29
United States Federal Income
Taxation............................ S-31
Underwriting.......................... S-35
Legal Matters......................... S-35
PROSPECTUS
Available Information.................
Incorporation of Certain Documents by
Reference...........................
Textron Inc. .........................
Textron Trusts........................
Textron Finance, L.P. ................
Use of Proceeds.......................
Description of Debt Securities........
Description of Trust Preferred
Securities..........................
Description of Trust Guarantees.......
Description of Partnership Preferred
Securities..........................
Description of Partnership
Guarantee...........................
Plan of Distribution..................
Legal Opinions........................
Experts...............................
===============================================================================
</TABLE>
===============================================================================
PREFERRED SECURITIES
TEXTRON CAPITAL I
% TRUST PREFERRED SECURITIES
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
TEXTRON INC.
[LOGO TEXTRON]
------------
PROSPECTUS SUPPLEMENT
DATED , 1996
------------
SMITH BARNEY INC.
===============================================================================
