As filed with the Securities and Exchange Commission on March 22, 1996.
Registration No. 33-_________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
--------
Equitable of Iowa Companies Iowa 42-1083593
Equitable of Iowa Companies Delaware To Be Applied For
Capital Trust
(Exact name of the Registrants (State or other jurisdiction (I.R.S. Employer
as specified in their of incorporation or Identification
respective charters) organization) No.)
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(515) 245-6911
(Address, including zip code, and telephone number, including area code,
of each Registrant's principal executive offices)
--------
John A. Merriman, Esq.
General Counsel and Secretary
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(515) 245-6787
(Name, address, including zip code, and telephone number,
including area code, of agent for service for each Registrant)
Copies to:
G. R. Neumann Lynn Soukup
Nyemaster, Goode, McLaughlin, Shaw, Pittman, Potts
Voigts, West, Hansell & O'Brien, P.C. & Trowbridge
1900 Hub Tower 2300 N Street, NW
Des Moines, Iowa 50309 Washington, D.C. 20037
(515) 283-3121 (202) 663-8000
Approximate date of commencement of proposed sale to the public: From
time to time after the Registration Statement becomes effective, 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, other than securities offered only in connection with dividend
or interest reinvestment plans, 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]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================
Proposed
Proposed Maximum
Title of Each Maximum Aggregate
Class of Offering Offering Amount of
Securities to Amount to be Price Per Price Registration
be Registered Registered (1) Unit (3)(4) (3)(4) Fee (2)(3)
______________________________________________________________________________
<S> <C> <C> <C> <C>
Debt Securities of
Equitable of Iowa
Companies
Preferred Stock(5) of
Equitable of Iowa
Companies, without
par value
Common Stock(5)(6) of
Equitable of Iowa
Companies, without
par value
Preferred Securities
of Equitable of Iowa
Companies Capital
Trust
Guarantee(7) of
Preferred Securities
of Equitable of Iowa
Companies Capital
Trust by Equitable
of Iowa Companies
Warrants of Equitable
of Iowa Companies
______________________________________________________________________________
Total $300,000,000 100% $300,000,000 $94,828.25
==============================================================================
<FN>
(1) Such indeterminate number or amount of Debt Securities, Preferred Stock
and Common Stock of Equitable of Iowa Companies, Preferred Securities of
Equitable of Iowa Companies Capital Trust and Warrants of Equitable of
Iowa Companies as may from time to time be issued at indeterminate prices.
Debt Securities of Equitable of Iowa Companies may be issued and sold to
Equitable of Iowa Companies Capital Trust, in which event such Debt
Securities may later be distributed to the holders of Preferred Securities
of Equitable of Iowa Companies Capital Trust upon its dissolution and the
distribution of the assets thereof. The amount registered is in United
States dollars or the equivalent thereof in any other currency, currency
unit or units, or composite currency or currencies.
(2) Does not include the filing fee of $8,620.75 associated with certain
securities which has been previously paid, being carried forward
pursuant to Rule 429 under the Securities Act of 1933, as described in
the last paragraph of this cover page.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457. The aggregate offering price of the Debt
Securities, Preferred Stock, Common Stock, Preferred Securities and
Warrants, and the exercise price of any Securities issuable upon
exercise of Warrants registered hereby will not exceed $300,000,000.
(4) Exclusive of accrued interest and distributions, if any.
(5) Also includes such indeterminate number of shares of Preferred Stock
and Common Stock as may be issued upon conversion of or exchange for any
Debt Securities or Preferred Stock that provide for conversion or exchange
into other securities. No separate consideration will be received for the
Preferred Stock or Common Stock issuable upon conversion of or in exchange
for Debt Securities or Preferred Stock.
(6) Includes Common Share Purchase Rights ("Rights"). The Rights are
associated with and trade with the Common Stock. The value, if any,
attributable to the Rights is reflected in the market price of the
Common Stock.
(7) Includes back-up undertakings, consisting of obligations of Equitable
of Iowa Companies to provide certain indemnities in respect of, and pay
and be responsible for certain expenses and debts of Equitable of Iowa
Companies Capital Trust. No separate consideration will be received for
the Guarantee or any back-up undertakings.
</TABLE>
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration
Statement shall become effective on such date as the Commission, acting
pursuant to Section 8(a), may determine.
Pursuant to Rule 429 under the Securities Act of 1933, the Prospectus
contained herein constitutes a combined Prospectus that also relates to
$25,000,000 unsold principal amount of the debt securities previously
registered pursuant to Equitable of Iowa Companies Registration Statement
on Form S-3 (File No. 33-57343). This Registration Statement constitutes
Post-Effective Amendment No. 1 to Registration Statement on Form S-3 (File
No. 33-57343) pursuant to which the total amount of unsold debt securities
previously registered on Registration Statement on Form S-3 (File No. 33-
57343) may be offered and sold as Debt Securities, Preferred Stock, Common
Stock, Preferred Securities and Warrants, without limitation as to class of
securities, together with the securities registered hereunder, through the
use of the combined Prospectus included herein. In the event any such
previously registered debt securities are offered prior to the effective
date of this Registration Statement, they will not be included in any
Prospectus hereunder.
Subject to Completion, Dated March 22, 1996
[Legend on Left Hand Margin]
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.
PROSPECTUS
$300,000,000
EQUITABLE OF IOWA COMPANIES
Debt Securities, Preferred Stock, Common Stock and Warrants
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST
Preferred Securities Guaranteed to the Extent Set Forth Herein
by Equitable of Iowa Companies
Equitable of Iowa Companies (the "Company") may from time to time offer,
together or separately, (i) its unsecured debt securities (the "Debt
Securities"), (ii) shares of its serial preferred stock, without par value
(the "Preferred Stock"), (iii) shares of its common stock, without par
value (the "Common Stock") and (iv) warrants to purchase Debt Securities,
Preferred Stock or Common Stock or any combination thereof, as shall be
designated by the Company at the time of the offering (the "Warrants") in
amounts, at prices and on terms to be determined at the time of the
offering.
Equitable of Iowa Companies Capital Trust, a statutory business trust
formed under the laws of the State of Delaware ("Equitable Trust"), may
offer preferred securities, representing undivided beneficial interests in
the assets of Equitable Trust ("Preferred Securities"). The payment of
periodic cash distributions ("Distributions") with respect to Preferred
Securities out of moneys held by Equitable Trust, and payments on
liquidation, redemption or otherwise with respect to such Preferred
Securities, will be guaranteed (a "Trust Guarantee") by the Company to the
extent described herein. See "Description of Trust Guarantee." The
Company's obligations under the Trust Guarantee will rank junior and
subordinate in right of payment to all other liabilities of the Company and
pari passu with its obligations under the senior most preferred or prefer
ence stock of the Company. See "Description of Trust Guarantee - Status of
Trust Guarantees." Debt Securities may be issued and sold by the Company
to Equitable Trust or a trustee of Equitable Trust in connection with the
investment of the proceeds from the offering of Preferred Securities and
Common Securities (as defined herein). The Debt Securities purchased by
Equitable Trust may be subsequently distributed pro rata to holders of
Preferred Securities and Common Securities in connection with the
dissolution of Equitable Trust, upon the occurrence of certain events as
may be described in an accompanying Prospectus Supplement. The Debt
Securities, Preferred Stock, Common Stock, Warrants and Preferred
Securities are collectively called the "Securities".
The Securities may be offered as separate series or issuances at an
aggregate initial public offering price not to exceed $300,000,000 or, if
applicable, the equivalent thereof in one or more foreign currencies,
currency units, composite currencies or in amounts determined by reference
to an index as shall be designated by the Company or Equitable Trust, in
amounts, at prices and on terms to be determined in light of market
conditions at the time of sale and set forth in the applicable Prospectus
Supplement.
Certain specific terms of the particular Securities in respect of which
this Prospectus is being delivered will be set forth in an accompanying
supplement to this Prospectus (the "Prospectus Supplement") which will
describe, without limitation and where applicable, (i) in the case of Debt
Securities, the specific designation, aggregate principal amount, ranking
as senior or subordinated debt securities, denominations, maturity, any
interest rate (which may be fixed or variable) and time and method of
calculating payment of any interest, any premium, dates on which any
premium or any interest are payable, any terms for redemption, any terms
for sinking fund payments, any terms for conversion or exchange into other
securities, any right of the Company to defer payment of interest on the
Debt Securities, and the maximum length of such deferral period,
subordination terms, currency or currencies of denomination and payment, if
other than U.S. dollars, the purchase price, any listing on a securities
exchange and any other terms in connection with the offering and sale of
the Debt Securities in respect of which this Prospectus is delivered; (ii)
in the case of Preferred Stock, the specific designation, stated value and
liquidation preference per share and number of shares offered, any dividend
rate (including the method of calculating payment of dividends), place or
places where dividends on such Preferred Stock will be payable, dates on
which such dividends will be payable and dates from which such dividends
shall accrue, seniority, redemption, voting and other rights, any terms for
any conversion or exchange into other securities, the purchase price, any
listing on a securities exchange, and any other terms; (iii) in the case of
Common Stock, the number of shares of Common Stock, dividend information
and the terms of offering thereof; (iv) in the case of Warrants, the
specific designation, the number, the purchase price, the exercise price,
any listing of the Warrants or the underlying securities on a securities
exchange and any other terms in connection with the offering, sale and
exercise of the Warrants; and (v) in the case of Preferred Securities, the
specific designation, number of securities, liquidation preference per
security, the purchase 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, terms for any conversion or exchange into other
securities, any redemption, exchange 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
Debt Securities of the Company. The Debt Securities may be issued in
registered or bearer form, or both. If so specified in the applicable
Prospectus Supplement, Securities may be issued in whole or in part in the
form of one or more temporary or permanent global securities.
The Company's Common Stock is listed on the New York Stock Exchange under
the trading symbol "EIC." Any Common Stock sold pursuant to a Prospectus
Supplement will be listed on such exchange, subject to official notice of
issuance.
The Securities may be sold by the Company or Equitable Trust directly, or
to or through underwriters or through dealers or agents. See "Plan of
Distribution." The names of any underwriters, dealers or agents involved
in the sale of the Securities in respect of which this Prospectus is being
delivered and any applicable fee, commission or discount arrangements with
them will be set forth in the applicable Prospectus Supplement. See "Plan
of Distribution" for possible indemnification arrangements for dealers,
underwriters and agents.
This Prospectus may not be used to consummate sales of
Securities unless accompanied by a 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.
The date of this Prospectus is _________, 1996.
No person has been authorized to give any information or to make any
representations other than those contained in this Prospectus, any
accompanying Prospectus Supplement or the documents incorporated or deemed
incorporated by reference herein, and any information or representations
not contained herein or therein must not be relied upon as having been
authorized by the Company or Equitable Trust or by any agent, dealer or
underwriter. This Prospectus and any accompanying Prospectus Supplement do
not constitute an offer to sell or a solicitation of an offer to buy the
Securities in any circumstances in which such offer or solicitation is
unlawful. The delivery of this Prospectus or any Prospectus Supplement at
any time does not imply that the information herein or therein is correct
as of any time subsequent to the date of such information.
AVAILABLE INFORMATION
The Company 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 Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by the Company may be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's Regional Offices located at Suite 1400, Citicorp
Center, 500 West Madison Street, Chicago, Illinois 60601, and 13th Floor,
Seven World Trade Center, New York, New York 10048. Copies of such
reports, proxy statements and other information can be obtained by mail
from the Public Reference Section of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Copies of such
reports, proxy statements and other information may also be inspected and
copied at the offices of the New York Stock Exchange, Inc., 20 Broad
Street, New York, New York 10005.
The Company and Equitable Trust have filed with the Commission a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, with respect to the Securities. This Prospectus does not contain
all of the information set forth in the Registration Statement and the
exhibits thereto, certain parts of which are omitted in accordance with the
rules and regulations of the Commission. Statements contained in this
Prospectus or in any Prospectus Supplement as to the contents of any
document are not necessarily complete and, in each instance, are qualified
in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement or otherwise filed with the
Commission for a complete version of the provisions thereof.
No separate financial statements of Equitable Trust have been included or
incorporated by reference herein. The Company does not consider that such
financial statements would be material to holders of the Preferred
Securities because (i) all of the voting securities of Equitable Trust will
be owned, directly or indirectly, by the Company, a reporting company under
the Exchange Act, (ii) Equitable Trust has no independent operations but
exists for the sole purpose of issuing securities representing undivided
beneficial interests in its assets and investing the proceeds thereof in
Debt Securities issued by the Company, and (iii) the obligations of
Equitable Trust under the Preferred Securities are fully and
unconditionally guaranteed by the Company to the extent that Equitable
Trust shall have funds available to meet such obligations. See
"Description of Preferred Securities" and "Description of Trust
Guarantees."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 0-8590) are incorporated by reference into
this Prospectus and made a part hereof:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1995.
2. The descriptions of the Company's Common Stock, without par value,
and its Shareholder Rights Agreement, as amended, contained in separate Form
8-A Registration Statements filed with the Commission on August 27, 1993
pursuant to Section 12 of the Exchange Act and any amendment or report filed
for the purpose of updating those descriptions.
3. All other documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering of the
Securities shall be deemed to be incorporated herein by reference and to be
a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein or in the accompanying Prospectus
Supplement or contained herein or in the accompanying Prospectus Supplement
shall be deemed to be supplemented, modified or superseded for purposes of
this Prospectus or such Prospectus Supplement to the extent that a
statement contained herein or therein or in any other subsequently filed
document that also is or is deemed to be incorporated by reference herein
or therein supplements, modifies or supersedes such statement. Any such
statement so supplemented, modified or superseded shall not be deemed,
except as so supplemented, modified or superseded, to constitute a part of
this Prospectus or any Prospectus Supplement.
The Company 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 any such person, a copy of any or all of the foregoing documents
incorporated herein by reference. Such requests should be directed to
Equitable of Iowa Companies, 604 Locust Street, P.O. Box 1635, Des Moines,
Iowa 50306-1635, Attention: Secretary, telephone: (515) 245-6799.
THE COMPANY
Equitable of Iowa Companies, a Des Moines, Iowa based insurance holding
company, is a provider of individual annuity and life insurance products,
targeting middle-income individuals and small businesses throughout the
United States. Through its primary insurance subsidiaries, Equitable Life
Insurance Company of Iowa ("Equitable Life") and USG Annuity & Life Company
("USG"), the Company offers its products in 49 states and the District of
Columbia. Equitable Life was founded in 1867 and is the oldest life
insurance company west of the Mississippi River. The Company began
actively marketing annuity products in 1988, principally through USG. The
Company has had a rapid rate of growth in assets over the past few years,
primarily as a result of increased demand for its annuity products.
The Company believes that, because of its diversified portfolio of
annuity and life insurance products, it is well-positioned to take
advantage of certain demographic and economic trends that are expected to
increase demand for these types of products. These trends include: an
aging "baby boomer" segment of the population that is increasingly
concerned about retirement and estate planning; an increase in the number
of families that are concerned about maintaining their standard of living
at retirement; and lower public confidence that government and employer-
provided benefits at retirement will be sufficient.
The Company offers, through its insurance subsidiaries, a portfolio of
life insurance and annuity products designed to meet the needs of its
customers for supplemental retirement income, estate planning and
protection from unexpected death. The Company requires that each of its
products be priced to earn an adequate margin between the interest credited
to the policyholder and the return earned by the Company on its
investments.
Annuities. Annuities are long-term savings vehicles that are
particularly attractive to customers over the age of 50 who are planning
for retirement and seeking secure, tax-deferred savings products. The
individual annuity business is a growing segment of the savings and
retirement market, and among the fastest growing segments of the life
insurance industry. Annuity products currently enjoy an advantage over
certain other retirement savings products, because the payment of federal
income taxes on interest credited on annuity policies is deferred during
the investment accumulation period.
The Company offers a variety of annuity products. Single premium
deferred annuities ("SPDAs"), in general, are savings vehicles in which the
policyholder, or annuitant, makes a single premium payment to an insurance
company. The insurance company credits the account of the annuitant with
earnings at an interest rate (the "crediting rate"), which is declared by
the insurance company from time to time and may exceed, but may not be
lower than, any contractually guaranteed minimum crediting rate. The
Company also offers flexible premium deferred annuities ("FPDAs"). FPDAs
are deferred annuities in which the policyholder may elect to make more
than one premium payment.
The Company's annuity products incorporate a number of features designed
to reduce the early withdrawal or surrender of the policies and to partially
compensate the Company for its costs if policies are withdrawn early. Under
the terms of the Company's policies, the policyholder is permitted to withdraw
all or part of the premium paid plus the amount credited to his or her account,
less a surrender charge for withdrawals. Certain of the Company's deferred
annuity contracts provide for penalty-free partial withdrawals, typically up
to 10% of the accumulation value annually. Surrender charge periods on
annuity policies currently typically range from five years to the term of the
policy, with the majority of such policies currently being issued with a
surrender charge period of seven years or more. The initial surrender charge
on annuity policies generally ranges from 5% to 20% of the premium and
decreases over the surrender charge period. In 1992, the Company introduced
a number of annuity products in which a "market value adjustment" is applied
to adjust the applicable surrender charge during the surrender charge period.
More than half of the Company's new annuity sales currently incorporate a
market value adjustment. The withdrawal rates of policyholder funds may be
affected to some degree, however, by changes in interest rates.
In the fourth quarter of 1994, the Company introduced a variable annuity
product. A variable annuity involves maintaining the policyholder premiums
in a separate account. Policyholders have discretion to allocate their
premiums among several available fund options. The cash surrender value of
a variable annuity policy depends on the performance of these underlying
funds, which the policyholder may reallocate from time to time. Similarly,
during the variable annuity's payout period, the payments distributed to
the annuitant fluctuate with the performance of the underlying funds
selected by the annuitant. Variable annuities provide the Company with fee-
based revenue in the form of management and administration fees charged to
the policyholder's account.
Life Insurance Products. The Company offers a variety of traditional,
universal and term life insurance products. Traditional life insurance
policies incorporate a fixed premium schedule and combine guaranteed
insurance protection with a savings feature. Traditional life polices cost
more than comparable term life insurance coverage when the policyholder is
younger, but less as the policyholder grows older. The policyholder may
borrow against the accumulated cash value, with policy loans typically
available at a rate of interest lower than that available from other
lending sources. The policyholder may also choose to surrender the policy
at any time and receive the accumulated cash value, less any applicable
withdrawal charge, rather than continuing the insurance protection. The
Company currently offers fixed premium current interest and other
traditional life insurance products, and its insurance in force also
includes participating policies.
Universal life insurance products provide whole life insurance and
adjustable rates of return related to current interest rates.
Policyholders may vary the frequency and size of their premium payments,
although policy benefits may also fluctuate according to such payments.
Term life insurance policies provide insurance protection for unexpected
death during the period in which the policy is in force, generally one,
five, ten or twenty years. These products are designed to meet the
customers' shorter-term needs because the policies do not have an
investment feature and no cash value is built up. Term life premiums are
accordingly lower than certain of the Company's other products. The
Company's current term life products include annually renewable term and
five-year, ten-year and fifteen-year renewable and convertible term
policies.
In order to discourage early policy withdrawals and to partially
compensate the Company for its costs if policies are terminated, all of the
Company's universal life and interest-sensitive policies issued since 1986
have incorporated withdrawal charges or similar provisions.
Distribution. The Company maintains a diverse distribution network that
seeks to provide high quality service to its customers, including the
Company's policyholders, agents, brokers and other producers, while
controlling costs. The Company markets its products through a variable
cost distribution network of over 53,000 licensed independent brokerage and
career agents as well as through financial institutions, such as banks and
thrifts. The Company competes with other life insurance companies and
distributors of retirement savings products.
As a holding company, the Company's principal source of liquidity to meet
its obligations (including any dividends, interest, principal and redemption
payments with respect to the Securities) is distributions from its
subsidiaries. The rights of the Company to participate in any distribution
of earnings or assets of any of its subsidiaries (and thus the ability of the
Company to use earnings and assets of its subsidiaries to pay its obligations
under the Securities) are subject to state insurance regulatory and other
statutory restrictions, including limitations on the amount of dividends that
may be paid by the Company's insurance subsidiaries in any year without the
prior approval of the state regulatory authorities, as more fully described
in the notes to the Company's financial statements. Any such distributions
are also subject to the prior claims of creditors of that subsidiary,
including claims for policy benefits, debt obligations and other liabilities
incurred in the ordinary course of business, except to the extent that the
claims, if any, of the Company as a creditor of such subsidiary may be
recognized.
The mailing address of the principal executive office of the Company is
604 Locust Street, P.O. Box 1635, Des Moines, Iowa 50306-1635 and the
telephone number is 515-245-6911.
EQUITABLE TRUST
Equitable Trust is a statutory business trust formed under Delaware law
pursuant to (i) a declaration of trust (the "Declaration") executed by the
Company as sponsor for such trust (the "Sponsor"), and the Equitable
Trustees (as defined herein) of such trust and (ii) the filing of a
certificate of trust with the Secretary of State of the State of Delaware
on March 19, 1996. Equitable Trust exists for the exclusive purposes of
(i) issuing and selling the Preferred Securities and common securities
representing undivided beneficial interests in the assets of Equitable
Trust (the "Common Securities" and, together with the Preferred Securities,
the "Trust Securities"), (ii) using the gross proceeds from the sale of the
Trust Securities to acquire the Debt Securities and (iii) engaging in only
those other activities necessary, appropriate, convenient or incidental
thereto. All of the Common Securities will be directly or indirectly owned
by the Company. The Common Securities will rank pari passu, and payments
will be made thereon pro rata, with the Preferred Securities, except that,
if an event of default under the Declaration has occurred and is
continuing, the rights of the holders of the Common Securities to payment
in respect of distributions and payments upon liquidation, redemption and
otherwise will be subordinated to the rights of the holders of the
Preferred Securities. The Company will directly or indirectly acquire
Common Securities, in an aggregate liquidation amount equal to at least 3%
of the total capital of Equitable Trust.
Equitable Trust has a term of approximately 25 years but may terminate
earlier, as provided in the Declaration. Equitable Trust's business and
affairs will be conducted by the trustees (the "Equitable Trustees")
appointed by the Company as the direct or indirect holder of all of the
Common Securities. The holder of the Common Securities will be entitled to
appoint, remove or replace any of, or increase or reduce the number of, the
Equitable Trustees of Equitable Trust. The duties and obligations of the
Equitable Trustees shall be governed by the Declaration. Equitable Trust
will have three Equitable Trustees (the "Regular Trustees") who are
employees or officers of or who are affiliated with the Company. One
Equitable Trustee of Equitable Trust will be a financial institution that
is not affiliated with the Company and has a minimum amount of combined
capital and surplus 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 the applicable
Prospectus Supplement (the "Property Trustee"). In addition, unless the
Property Trustee maintains a principal place of business in the State of
Delaware and otherwise meets the requirements of applicable law, one
Equitable Trustee of Equitable Trust will be an entity having a principal
place of business in, or a natural person resident of, the State of
Delaware (the "Delaware Trustee"). The Company will pay all fees and
expenses related to Equitable Trust and the offering of the Trust
Securities.
The Property Trustee for Equitable Trust is the First National Bank
of Chicago and its corporate trust office is at One First National Plaza,
Suite 0126, Chicago, Illinois 60670-0126 Attention: Corporate Trust
Services Division. The Delaware Trustee for Equitable Trust is First
Chicago Delaware, Inc. and its address in the State of Delaware is c/o FCC
National Bank, 300 King Street, Wilmington, Delaware 19801. The Delaware
Trustee is an affiliate of the Property Trustee. The Property Trustee also
serves as Trustee under the Indenture of the Company dated as of January
17, 1995, pursuant to which the Company has issued $100,000,000 of its 8 1/2%
Notes due 2005 and will issue any Debt Securities to Equitable Trust in
connection with the issuance of Preferred Securities. The address for
Equitable Trust is c/o Equitable of Iowa Companies, the Sponsor of
Equitable Trust, at the Company's corporate headquarters located at 604
Locust Street, Des Moines, Iowa 50309-3705, telephone 515-245-6911.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement, the
net proceeds received by the Company from the sale of any Debt Securities,
Common Stock, Preferred Stock or Warrants offered hereby are expected to be
used for general corporate purposes. The proceeds from the sale of
Preferred Securities by Equitable Trust will be invested in the Debt
Securities of the Company. Except as may otherwise be described in the
Prospectus Supplement relating to such Preferred Securities, the Company
expects to use the net proceeds from the sale of such Debt Securities to
Equitable Trust for general corporate purposes. Until the net proceeds are
used for these purposes, the Company may deposit them in interest-bearing
accounts or invest them in short-term marketable securities. The specific
allocations, if any, of the proceeds of any of the Securities will be
described in the Prospectus Supplement relating thereto.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the historical ratios of earnings to fixed
charges for the Company and its subsidiaries on a consolidated basis for
each of the years ended December 31, 1991 through 1995. The ratio of
consolidated earnings to fixed charges is calculated by dividing
consolidated earnings (income from continuing operations before income
taxes plus fixed charges) by fixed charges (interest expense on debt and a
portion of rental expense).
<TABLE>
<CAPTION>
Year Ended
December 31
________________________________________
<S> <C> <C> <C> <C> <C>
1995 1994 1993 1992 1991
Ratio of earnings to fixed charges 10.0 17.8 12.3 8.0 4.9
</TABLE>
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities 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 or do not apply to such Debt
Securities, will be described in the Prospectus Supplement relating to such
Debt Securities.
The Debt Securities may be issued in one or more series under an indenture
between the Company and a trustee, a copy of which has been or will be
included as an exhibit to or incorporated by reference in the Registration
Statement of which this Prospectus is a part. Unless otherwise indicated in
an accompanying Prospectus Supplement, the Debt Securities will be issued
under an Indenture dated as of January 17, 1995 (as amended or supplemented
from time to time, the "Indenture") between the Company and The First National
Bank of Chicago, as Trustee (together with any successor thereto, the
"Trustee"). The following summaries of certain provisions of the Indenture
and the Debt Securities do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all provisions of the
Indenture, a copy of which is incorporated by reference as an exhibit to the
Registration Statement of which this Prospectus is a part. Certain terms
defined in the Indenture are capitalized in this Prospectus. The parenthe-
tical section references below are to the Indenture.
General
The Debt Securities will be unsecured obligations of the Company. The
Indenture does not limit the aggregate principal amount of Debt Securities
which may be issued thereunder. The Indenture provides that Debt
Securities may be issued thereunder from time to time in one or more
series, with different maturity dates, interest rates and other terms, and
may be denominated and payable in United States dollars or in foreign
currencies or units based on or relating to foreign currencies, in each
case as authorized from time to time by the Company. Unless otherwise
indicated in the applicable Prospectus Supplement, the Indenture also
permits the Company to increase the principal amount of any series of Debt
Securities previously issued and to issue additional securities of such
series in such increased principal amount. (Section 2.3)
Reference is made to the applicable Prospectus Supplement which will
accompany this Prospectus and which will set forth the following terms
relating to the Debt Securities, to the extent applicable thereto: (1) the
specific designation of the Debt Securities and authorized denominations
thereof; (2) any limit on the aggregate principal amount of the Debt
Securities; (3) the percentage of the principal amount representing the
price for which the Debt Securities will be issued; (4) the date or dates,
or method of determining the same, on which the principal of and premium,
if any, on the Debt Securities will mature; (5) the rate or rates per annum
(which may be fixed or variable) at which the Debt Securities will bear
interest, if any, or the method by which such rate or rates will be determined,
the date or dates from which any such interest will accrue or the method by
which such date or dates will be determined, and the date or dates on which
any such interest will be payable and (in the case of Debt Securities in
registered form) the Record Dates for any interest payable on the Debt
Securities or the method by which such dates will be determined; (6) any
index used to determine the amount of principal, premium or interest payable
on the Debt Securities; (7) any subordination of the Debt Securities to other
indebtedness of the Company (including to any other series of Debt Securities)
and the right of the Company, if any, to defer payment of interest on
Debt Securities and the maximum length of any such deferral period; (8) any
mandatory or optional redemption, repayment or sinking fund or analogous
provisions, including the period or periods within or the date upon which, the
price or prices at which, the currency or units based on or relating to foreign
currencies in which and the terms and conditions upon which the Debt Securities
may be redeemed or purchased, in whole or in part, at the option of the
Company, at the option of the Holder thereof or otherwise; (9) whether the Debt
Securities will be issuable in registered form or bearer form or both, and, if
issuable in bearer form, the restrictions as to the offer, sale, delivery,
transfer and exchange of the Debt Securities in bearer form or the payment of
interest thereon and the terms of exchanges between registered and bearer form;
(10) whether the Debt Securities will be issuable in whole or in part in the
form of one or more temporary or permanent Registered Global Securities and, if
so, the identity of the Depositary for such Registered Global Securities and
the terms and conditions, if any, upon which such Registered Global Security or
Securities may be exchanged in whole or in part for other definitive
securities; (11) each office or agency where the principal of and premium and
interest, if any, on the Debt Securities will be payable, and each office or
agency where the Debt Securities may be presented for registration of transfer
or exchange and where notices may be served upon the Company; (12) if other
than in United States dollars, the foreign currency or the units based on or
relating to foreign currencies in which the Debt Securities are denominated
and/or in which the payment of the principal of and premium and interest, if
any, on the Debt Securities will or may be payable; (13) any right of the
Company to require a Holder to accept, or of a Holder to elect to receive,
payment of the Debt Securities in a currency other than that in which they are
denominated or stated to be payable; (14) if other than the stated principal
amount thereof, the portion of the principal amount of the Debt Securities
payable upon declaration of acceleration of the maturity of the Debt Securities
and/or the method by which such amount shall be determined; (15) any variation
to the provisions of the Indenture with respect to the satisfaction and
discharge of the Company's indebtedness and obligations, or termination of
certain of its covenants and Events of Default under the Indenture, with
respect to the Debt Securities by deposit of money or Government Obligations;
(16) any additions to or deletions from the Events of Default or covenants of
the Company contained in the Indenture with respect to the Debt Securities;
(17) any trustee (other than The First National Bank of Chicago), depositary,
currency determination agent, authenticating or paying agent, transfer agent,
registrar or other agent with respect to the Debt Securities; (18) the person
to whom any interest on any such Debt Security shall be payable if other than
the person in whose name such Debt Security is registered on the applicable
Record Date; (19) any United States federal income tax considerations
applicable to holders of the Debt Securities; (20) any terms for conversion or
exchange of the Debt Securities into other securities; and (21) any other
terms of the Debt Securities which shall not adversely affect the interests of
any Holders of any Debt Securities then outstanding. (Section 2.3)
Debt Securities may be issued bearing no interest or interest at a rate
below the prevailing market rate at the time of issuance and may be offered
and sold at a substantial discount below their stated principal amount.
Certain United States federal income tax consequences and other special
considerations applicable to any such discounted Debt Securities or to
other Debt Securities offered and sold at par which are treated as having
been issued at a discount for United States federal income tax purposes
will be described in the Prospectus Supplement relating thereto. Certain
United States federal income tax considerations and other information
applicable to any Debt Securities denominated in or having principal, any
premium or any interest payable in foreign currencies or in units based on
or relating to foreign currencies will be described in the Prospectus
Supplement relating thereto.
Unless the Prospectus Supplement relating thereto specifies otherwise,
Debt Securities denominated in U.S. dollars will be issued only in
denominations of $1,000 or any integral multiple thereof. (Section 2.7)
The Prospectus Supplement relating to a series of Debt Securities
denominated in a foreign currency or currency unit will specify the
denominations thereof.
Unless the Prospectus Supplement relating thereto specifies otherwise,
the Debt Securities will be issued only in fully registered form without
coupons. Debt Securities of a series may be issuable in whole or in part
in the form of one or more Registered Global Securities, as described below
under "Registered Global Securities." In such case, one or more Registered
Global Securities will be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of Outstanding
Securities of the series to be represented by such Registered Global
Security or Securities. (Section 2.4)
The Debt Securities will be unsecured and, unless otherwise described in
the Prospectus Supplement relating thereto, will rank on a parity with all
other unsecured and unsubordinated indebtedness of the Company. (Section
2.3) Except as described below under "Description of Debt Securities --
Covenants -- Limitation on Liens on Stock of Restricted Subsidiaries",
there is no restriction in the Indenture against the Company or subsidiaries
of the Company incurring secured or unsecured indebtedness or issuing secured
or unsecured securities. The Company has from time to time entered into, and
will in the future enter into, credit agreements to fund its operations.
Such credit agreements may be secured by the assets of the Company, secured
by the assets of the Company's subsidiaries or guaranteed by the Company's
subsidiaries. To the extent that such credit agreements are so secured or
guaranteed, the lenders under such credit agreements will have priority over
the Holders of the Debt Securities with respect to the assets of the Company
or its subsidiaries.
Except as described below under "Description of Debt Securities --
Covenants", the Indenture does not contain covenants or other provisions
designed to afford Holders of Debt Securities protection in the event of a
change in capital structure, reorganization, dividend or distribution in
respect of Capital Stock, change in credit rating, incurrence of
indebtedness or similar obligations that would have priority over or be on
a parity with the Debt Securities or other similar occurrence. Holders of
the Debt Securities will not have the right to accelerate the Debt
Securities in the event of material adverse changes in the financial
condition or results of operations of the Company or of its subsidiaries or
other events which may adversely affect the creditworthiness of the
Company. Therefore, the financial condition and results of operations of
the Company, and not the covenants and other provisions of the Indenture,
should be the primary factor in an evaluation of whether the Company will
be able to satisfy its obligations under the Debt Securities.
Exchange and Transfer
At the option of the Holder upon request confirmed in writing, and
subject to the terms of the Indenture, Debt Securities of any series (other
than Registered Global Securities) will be exchangeable into an equal
aggregate principal amount of Debt Securities of the same series (with the
same interest rate, maturity date and other terms) of different authorized
denominations except that Debt Securities of any series issued in
registered form may not be exchanged for Debt Securities of the same series
issued in bearer form unless the applicable Prospectus Supplement shall
provide to the contrary. (Section 2.8)
Unless otherwise provided in the applicable Prospectus Supplement, the Debt
Securities may be presented for exchange, and registered Debt Securities
(other than a Registered Global Security) may be presented for registration
of transfer, at the offices or agency of the Security Registrar in New York,
New York. No service charge will be made for any transfer or exchange, but
the Company may require payment of any taxes or other governmental charges
due in connection therewith, subject to any applicable limitations or
conditions contained in the Indenture. Such transfer or exchange will be
effected by the Security Registrar upon its being satisfied with the
documents of title and the identity of the person making the request. The
Company has appointed the Trustee as Security Registrar. Debt Securities in
bearer form and the related coupons, if any, will be transferable by delivery.
(Sections 2.8 and 3.2)
Payment
Unless otherwise provided in the applicable Prospectus Supplement,
payment of principal of and premium, if any, on the Debt Securities will be
made at the office of the Trustee in New York, New York. Unless otherwise
provided in the applicable Prospectus Supplement, payment of any
installment of interest, if any, on a Debt Security will be made at the
office or agency of the Trustee in New York, New York, except that, at the
option of the Company, payment of any interest on Debt Securities in
registered form may be made (i) by check mailed to the address of the
Person entitled thereto as such address shall appear in the Security
Register or (ii) by wire transfer to an account maintained by the Person
entitled thereto as specified in the Security Register. (Sections 3.1 and
3.2) Unless otherwise provided in the applicable Prospectus Supplement,
payment of any interest due on Debt Securities in registered form will be
made to the Persons in whose name such Debt Securities are registered at
the close of business on the Record Date for such interest payments;
provided, however, that any interest that is payable at maturity will be
payable to the person to whom principal payable at maturity shall be
payable. (Section 2.7)
Principal and premium and interest, if any, shall be considered paid on
the due date if on such date the Trustee or the paying agent holds money
sufficient to pay all such amounts then due and the Trustee or the paying
agent, as the case may be, is not prohibited under the terms of the
Indenture from paying such money to the Holders of the Debt Securities on
that date. (Section 3.1)
Registered Global Securities
The registered Debt Securities of a particular series may be issued in
whole or in part in the form of one or more Registered Global Securities,
which will be deposited with or on behalf of a depositary located in the
United States (the "Depositary") that will be identified in the Prospectus
Supplement relating to such series, and registered in the name of the
Depositary or its nominee. (Section 2.4) Unless and until exchanged, in
whole or in part, for other Debt Securities of such series in definitive
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, 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, and except in
the circumstances described in the applicable Prospectus Supplement.
(Section 2.8)
The specific terms of the depositary arrangement with respect to any portion
of a particular series of Debt Securities to be represented by a Registered
Global Security will be described in the Prospectus Supplement relating to
such series. The Company anticipates that the following provisions will
apply to all depositary arrangements.
Upon the issuance of a Registered Global Security, the Depositary therefor
or its nominee will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities represented
by such Registered Global Security to the accounts of such persons having
accounts with such Depositary ("participants") as shall be designated by the
dealers, underwriters or agents participating in the distribution of such
Debt Securities or by the Company if such Debt Securities are offered and
sold directly by the Company. Ownership of beneficial interests in a
Registered Global Security will be limited to participants or persons that
may hold interests through participants; however, the Company will have no
obligations to participants or any persons that hold interests through
participants. Ownership of beneficial interests in a Registered Global
Security will be shown on, and the transfer of such beneficial interests will
be effected only through, records maintained by the Depositary therefor or
its nominee (with respect to interests of participants) or by participants or
persons that hold through participants (with respect to interests of persons
other than participants). The laws of some states require certain purchasers
of securities to take physical delivery thereof in definitive form. The
depositary arrangements described above and such laws may impair the ability
to own or transfer beneficial interests in a Registered Global Security.
So long as the Depositary for a Registered Global Security, or its
nominee, is the registered owner thereof, 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 the Indenture. Unless otherwise specified in the applicable
Prospectus Supplement and except as provided below, owners of beneficial
interests in a Registered Global Security will not be entitled to have Debt
Securities of the series represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in definitive form and
will not be considered the owners or Holders thereof for any purposes under
the Indenture. (Section 7.3) Accordingly, each person owning a beneficial
interest in such Registered Global Security must rely on the procedures of
the Depositary 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 Indenture. The Depositary may grant
proxies and otherwise authorize participants to give or take any request,
demand, authorization, direction, notice, consent, waiver or other action
which a Holder is entitled to give or take under the Indenture. The
Company understands that, under existing industry practices, if the Company
requests any action of Holders or if any owner of a beneficial interest in
such Registered Global Security desires to give any notice or take any
action which a Holder is entitled to give or take under the Indenture, the
Depositary would authorize the participants to give such notice or take
such action, and such participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through
them.
Principal of and premium and interest payments, if any, 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 nominee, as the
case may be, as the registered owner of such Registered Global Security. The
Company expects that the Depositary for a Registered Global Security or its
nominee, upon receipt of any payment of principal or premium or interest, if
any, in respect thereof, will immediately credit participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amounts of such Registered Global Security as shown on the
records of such Depositary. The Company 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 securities held
for the accounts of customers registered in "street name", and will be the
responsibility of such participants. Neither the Company, the Trustee nor
any paying agent or Security Registrar for Debt Securities of the series
represented by such Registered Global Security will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial interests in such Registered Global Security or for
maintaining, supervising or reviewing any records relating to such beneficial
interests. (Section 7.3)
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depositary for a Registered Global Security representing Debt Securities or a
particular series of Debt Securities is at any time unwilling or unable to
continue as Depositary or ceases to be a clearing agency registered under the
Exchange Act and any other applicable statute or regulation and a successor
Depositary is not appointed by the Company within ninety (90) days, the
Company will issue Debt Securities of such series in definitive form in
exchange for all of the Registered Global Securities representing Debt
Securities of such series. In addition, the Company may at any time and in
its sole discretion determine to no longer have the Debt Securities of a
particular 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 Securities representing
Debt Securities of such series. (Section 2.8)
Within seven days after the occurrence of an Event of Default concerning
nonpayment of interest, principal or any sinking fund or analogous payment
with respect to any series of Debt Securities that is, in whole or in part,
represented by a Registered Global Security, the Company will execute, and
the Trustee will authenticate and deliver, Debt Securities of such series
in definitive registered form, in any authorized denominations and in an
aggregate principal amount equal to the principal amount of the Registered
Global Security in exchange for such Registered Global Security. (Section
2.8)
Debt Securities in definitive registered form issued in exchange for a
Registered Global Security shall be registered in such names and in such
authorized denominations as the Depositary for such Registered Global
Security, pursuant to instructions from the participants or persons that
hold interests through such participants, shall instruct the Trustee. The
Trustee will deliver Debt Securities in definitive registered form to or as
directed by the persons in whose names such Debt Securities are so
registered. (Section 2.8)
Covenants
General. Unless otherwise specified in the applicable Prospectus
Supplement, the Indenture requires the Company to covenant to the following
with respect to each series of Debt Securities: (i) to duly and punctually
pay the principal of and premium and interest, if any, on such series of
Debt Securities (together with any additional amounts payable pursuant to
the terms thereof) and comply with all other terms, agreements and
conditions contained therein or made in the Indenture for the benefit of
the Debt Securities of such series; (ii) to maintain an office or agency
where Debt Securities of such series may be presented, surrendered for
payment, transferred or exchanged and where notices to the Company may be
served; (iii) if the Company shall act as its own paying agent for any
series of Debt Securities, to segregate and hold in trust for the benefit
of the persons entitled thereto a sum sufficient to pay the principal of
and premium or interest, if any, so becoming due; (iv) to appoint a
successor trustee whenever necessary to avoid or fill a vacancy in the
office of trustee, and (v) to preserve its corporate existence (Article 3).
The Indenture also requires the Company to deliver to the Trustee, within
120 days after the end of each fiscal year, a written statement as to
whether, to the best knowledge of the officer signing the statement, the
Company is in compliance with the terms of the Indenture and, if not, the
nature and status of such non-compliance. (Section 4.3)
Limitation on Liens on Stock of Restricted Subsidiaries. Unless otherwise
specified in the applicable Prospectus Supplement, the Company will not, nor
will it permit any Restricted Subsidiary to, issue, assume or guarantee any
indebtedness for borrowed money (hereinafter referred to as "Debt") secured
by a security interest, pledge, lien or other encumbrance upon any shares of
Capital Stock of any Restricted Subsidiary without effectively providing that
the Debt Securities (together with, if the Company shall so determine, any
other indebtedness of or guarantee by the Company or any Restricted
Subsidiary ranking senior to or equally with the Debt Securities and then
existing or thereafter created) shall be secured equally and ratably with
such Debt. (Section 3.6).
For purposes of the Indenture, "Restricted Subsidiary" means each of
Equitable Life and USG, in each case, so long as it remains a subsidiary of
the Company, as well as any subsidiary of the Company that is a successor
to all or a principal part of the business of any such subsidiary and
"Capital Stock" means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated) corporate stock. (Section 1.1). The Restricted
Subsidiaries accounted for substantially all of the consolidated revenues
of the Company during the year ended December 31, 1995 and the consolidated
assets of the Company at December 31, 1995.
Limitation on Issuance or Disposition of Stock of Restricted Subsidiaries.
Unless otherwise specified in the applicable Prospectus Supplement, the
Company will not, nor will it permit any Restricted Subsidiary to, issue,
sell, assign, transfer or otherwise dispose of, directly or indirectly, any
Capital Stock (other than nonvoting preferred stock) of any Restricted
Subsidiary, except for (i) the purpose of qualifying directors; (ii) sales
or other dispositions to the Company or one or more Restricted Subsidiaries;
(iii) the disposition of all or any part of the Capital Stock of any
Restricted Subsidiary for consideration which is at least equal to the fair
value of such Capital Stock as determined by the Company's Board of Directors
(acting in good faith); or (iv) an issuance, sale, assignment, transfer or
other disposition required to comply with an order of a court or regulatory
authority of competent jurisdiction, other than an order issued at the
request of the Company or any Restricted Subsidiary. (Section 3.7)
Consolidation, Merger and Transfer of Assets. Unless otherwise specified
in the applicable Prospectus Supplement, the Company has agreed that it
will not consolidate or merge with or into, or transfer, sell, convey or
lease its properties or assets as, or substantially as, an entirety unless
(i) either the Company is the continuing entity or the successor (if other
than the Company) is a domestic corporation or other domestic entity which
expressly assumes the Company's obligations for each series of Debt
Securities and under the Indenture, (ii) immediately after giving effect to
such transaction, no Event of Default, and no event that, after notice or
lapse of time, or both, would become an Event of Default, shall have
occurred and be continuing, and (iii) the Company delivers to the Trustee
an officer's certificate and opinion of counsel stating that such
consolidation, merger, transfer, sale, conveyance or lease complies with
the Indenture. (Article 9)
Events of Default
The occurrence of any of the following events with respect to the Debt
Securities of any series will, unless otherwise specified in the applicable
Prospectus Supplement, constitute an "Event of Default" with respect to the
Debt Securities of such series: (a) default for thirty (30) days in the
payment of any installment of interest on any of the Debt Securities of such
series; (b) default in the payment of any of the principal of or the premium,
if any, on any of the Debt Securities of such series when due, whether at
maturity, upon redemption, by declaration of acceleration or otherwise; (c)
default in the deposit when due of any sinking fund payment or analogous
obligation in respect of any of the Debt Securities of such series; (d)
default for sixty (60) days by the Company in the observance or performance
of any other covenant or agreement contained in the Debt Securities of such
series or the Indenture (other than a covenant or agreement default which is
specifically designated as having a different time period) for the benefit of
the Debt Securities of such series after written notice thereof as provided
in the Indenture; (e) (i) an event of default occurs under any instrument
(including the Indenture) under which there is at the time outstanding, or
by which there may be secured or evidenced, any indebtedness of the Company
or any of its Restricted Subsidiaries for money borrowed by the Company or
any of its Restricted Subsidiaries (other than non-recourse indebtedness)
which results in acceleration or nonpayment at maturity (after giving effect
to any applicable grace period) of such indebtedness in an aggregate amount
exceeding $15,000,000; or any such indebtedness exceeding $15,000,000 shall
otherwise be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled prepayment or exercise of an optional prepayment
right), prior to the stated maturity thereof; or any failure by the Company
or any Restricted Subsidiary to make any payment under a guarantee in respect
of any indebtedness (except up to $26,311,000 aggregate principal amount of
8.70% Guaranteed Notes issued by Walnut Mall Limited Partnership, due August
19, 1996 and any accrued interest or premium with respect thereto, which
indebtedness is more fully described in the notes to the Company's financial
statements), in each case in an amount of at least $15,000,000, on the date
such payment is due (or within any grace period specified in the agreement or
other instrument governing such indebtedness); in which case the Company
shall immediately give notice to the Trustee of such acceleration or
non-payment, and (ii) there shall have been a failure to cure such default or
to pay or discharge such defaulted indebtedness within ten (10) days after
written notice thereof as provided in the Indenture; (f) any final
non-appealable judgment or order for the payment of money in excess of
$15,000,000 is rendered against the Company or any Restricted Subsidiary,
such judgment or order is not satisfied by payment or bonded and either
enforcement proceedings have been commenced by the judgment creditor or there
has been a period of 30 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall
not have been in effect; provided, however, that a judgment or order fully
covered by insurance (or a judgment or order for the payment of money covered
by insurance to the extent of all payments in excess of $15,000,000), which
coverage has not been disputed by the insurer, shall not be considered a
default or an Event of Default; or (g) certain events of bankruptcy,
insolvency or reorganization relating to the Company. (Section 5.1)
Different or additional Events of Default may be prescribed for the benefit
of the Holders of a particular series of Debt Securities and will be
described in the Prospectus Supplement relating thereto. (Sections 2.3 and
5.1) No Event of Default with respect to a particular series of Debt
Securities issued under the Indenture will necessarily constitute an Event of
Default with respect to any other series of Debt Securities issued thereunder.
If an Event of Default shall have occurred and be continuing with respect
to any series of the Debt Securities unless the principal of all of the Debt
Securities of such series shall have already become due and payable, either
the Trustee or the Holders of not less than 25% in aggregate principal amount
of the Debt Securities of such series then Outstanding may declare the
principal of all Debt Securities of such series then Outstanding and the
interest, if any, accrued thereon to be due and payable immediately. If an
Event of Default due to certain events of bankruptcy, insolvency or
reorganization of the Company shall have occurred and be continuing, the
principal and interest on all the Debt Securities then Outstanding shall
thereby become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders of Debt Securities. Upon
certain conditions, any such declaration of acceleration with respect to Debt
Securities of any series may be rescinded and annulled if all Events of
Default, other than the nonpayment of accelerated principal and premium, if
any, with respect to the Debt Securities of such series shall have been cured,
waived or otherwise remedied as provided in the Indenture by the Holders of a
majority in aggregate principal amount of the Debt Securities of such series
then Outstanding. Reference is made to the Prospectus Supplement relating to
any series of Original Issue Discount Securities for the particular provisions
relating to the acceleration of a portion of the principal thereof upon the
occurrence and continuance of an Event of Default with respect thereto.
(Section 5.1)
Holders of Debt Securities may not enforce the Indenture or the Debt
Securities except as provided in the Indenture. The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debt
Securities. (Sections 5.6 and 6.2) Subject to such provisions for
indemnity and certain other limitations contained in the Indenture, the
Holders of a majority in aggregate principal amount of the Debt Securities
of any series then Outstanding will have the right to direct the Trustee in
the conduct of any proceeding for any remedy or the exercise of any trust or
power with respect to such series, except that the Trustee may decline to
follow such directions if it in good faith determines that the actions or
proceedings so directed would unduly prejudice the rights of Holders of
Securities of other affected series not joining in the giving of such
directions. (Section 5.9) Holders and beneficial owners of the Debt
Securities have no recourse under the Indenture, any Debt Security or the
indebtedness evidenced thereby against any incorporator, officer, director,
employee, stockholder or partner, as such, of the Company. (Section 11.1)
The Indenture provides that the Trustee may withhold notice to the
Holders of the Debt Securities of any series of any continuing default
affecting such series (except a default in payment) if it considers such
withholding to be in the interests of the Holders of the Debt Securities of
such series. (Section 5.11)
Modification and Waiver
The Indenture permits the Company and the Trustee to enter into
supplemental indentures without the consent of the Holders of the Debt
Securities to: (a) pledge collateral as security for the Debt Securities
of one or more series, (b) add guarantees with respect to the Debt
Securities of one or more series, (c) evidence the assumption by a
successor entity of the obligations of the Company under the Indenture and
with regard to the Debt Securities then Outstanding, (d) add covenants for
the protection of the Holders of the Debt Securities of one or more series,
including any different grace periods or remedies for breach thereof
otherwise than as provided in the Indenture, (e) cure any ambiguity or
correct or supplement any provision that may be defective or inconsistent
with any other provisions contained in the Indenture or make or add such
other provisions as the Company may deem necessary or desirable, provided
that no such action adversely affects the interests of the Debt Securities
of any series, (f) establish the form and terms of the Debt Securities of
any series, (g) evidence the acceptance of appointment by a successor
Trustee with respect to the Debt Securities of one or more series and
certain related matters, (h) subject to compliance with certain
requirements of the Indenture, provide for uncertificated Debt Securities
in addition to or in place of certificated Debt Securities, (i) comply with
any requirements of the Securities and Exchange Commission in connection
with qualifying the Indenture under the Trust Indenture Act of 1939, as
amended, or to comply with any amendments thereto, (j) comply with any
requirements related to the listing of the Debt Securities of any series
for trading on a securities exchange or through an interdealer quotation
system, and (k) add to or change or eliminate any provision of the
Indenture if such change or elimination is applicable only to Debt
Securities of any series that are first issued after the effective date
thereof. (Section 8.1)
The Indenture also permits the Company and the Trustee, with the consent
of the Holders of not less than a majority in aggregate principal amount of
the Debt Securities of any series then Outstanding and affected thereby, to
execute supplemental indentures adding any provisions to, or changing in
any manner or eliminating any of the provisions of, the Indenture or any
supplemental indenture or modifying in any manner the rights of the Holders
of the Debt Securities of any such affected series; provided, however, that
without the consent of the Holder of each Debt Security of any such series
then Outstanding and affected thereby, no such supplemental indenture may:
(a) extend the time of payment of the principal (or any installment thereof)
of, or premium on any Debt Securities, or reduce the amount thereof, or
reduce the rate, alter the method of computation of the rate or extend the
time of payment of interest thereon, reduce any amount payable on the
redemption thereof, reduce the amount of, or postpone the date fixed for, any
sinking fund payment or analogous obligation, or change the currency or
currency unit in which the principal thereof or the premium or interest
thereon is payable, or reduce the amount payable on any Original Issue
Discount Security upon acceleration or provable in bankruptcy, or change the
place of payment specified for such Debt Securities, or alter certain
provisions of the Indenture relating to Debt Securities not denominated in
United States dollars, or impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Securities when due
or, if such Debt Security shall so provide, any right of repayment at the
option of the Holder thereof; or (b) reduce the percentage in principal
amount of the Debt Securities of such series, the consent of whose Holders
is required for any modification or amendment of the Indenture or for any
waiver provided for in the Indenture; or (c) modify any of the foregoing
provisions, except to increase any such percentage or to provide that certain
other provisions of the Indenture cannot be modified or waived without the
consent of the Holders of each Outstanding Debt Security so affected.
(Section 8.2)
The Holders of a majority in aggregate principal amount of the Debt
Securities of any series then Outstanding may on behalf of the Holders of
all Debt Securities of that series waive, insofar as that series is
concerned, compliance by the Company with any covenant or provision of the
Indenture applicable to that series, except for any covenant or provision
which cannot be modified or amended without the consent of the Holder of
each Debt Security of such affected series. (Section 11.13) Prior to the
declaration of acceleration of the maturity of Debt Securities of any
series then Outstanding, the Holders of a majority in aggregate principal
amount of the Debt Securities of such series then Outstanding with respect
to which a default or an Event of Default shall have occurred and is
continuing may, on behalf of the Holders of all Debt Securities of such
series, waive any past default or Event of Default and its consequences,
except a default or an Event of Default in respect of a covenant or
provision of the Indenture or of any Debt Securities of such series which
cannot be modified or amended without the consent of each of the Holders of
the Debt Securities of such series. (Section 5.10)
Defeasance and Discharge
Unless otherwise specified in the applicable Prospectus Supplement, the
Company may elect either (a) to defease and be discharged from any and all
obligations in respect of all outstanding Debt Securities of any particular
series (defeasance and discharge), or (b) to be released from its obligations
with respect to certain covenants of the Indenture and certain Events of
Default applicable to such series, all of which shall be specified in the
applicable Prospectus Supplement (covenant defeasance), in each case if the
Company irrevocably deposits in trust with the Trustee for the benefit of the
Holders of the Debt Securities of such series funds and/or securities that
are direct full faith and credit obligations of, or obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of and
the payment of which is unconditionally guaranteed by the full faith and
credit of, the government which issued the currency in which the Debt
Securities of such series are payable or certain depository receipts therefor
("Government Obligations") which, through the payment of the principal
thereof and the interest thereon in accordance with their terms, will provide
funds in an amount sufficient to pay all the principal of and premium and
interest, if any, on the Debt Securities of such series (including any
mandatory sinking fund or analogous payments) as they shall become due from
time to time in accordance with the terms thereof. To effect a defeasance
and discharge with respect to Debt Securities of a series that will not be
fully paid (upon maturity or redemption) within one year or to effect a
covenant defeasance, the Company is required, among other things, to deliver
to the Trustee an opinion of counsel to the effect that the Holders of the Debt
Securities of such series would not recognize income, gain or loss for United
States federal income tax purposes as a result of such defeasance and
discharge or such covenant defeasance, as the case may be, and that such
Holders will be subject to United States federal income tax on the same
amounts, in the same manner and at the same times as would have been the case
if such defeasance had not occurred, and in the case of such a defeasance and
discharge such opinion shall additionally state that either (A) there has
been a change in the applicable United States federal income tax law to the
foregoing effect or (B) the Company has received a private letter ruling
from the Internal Revenue Service or there has been published a revenue
ruling to the foregoing effect. Neither a defeasance and discharge with
respect to Debt Securities of a series that will not be fully paid (upon
maturity or redemption) within one year nor a covenant defeasance will be
made with respect to any Debt Securities of a series then listed on any
national securities exchange if such defeasance and discharge or covenant
defeasance would cause Debt Securities of such series to be delisted. Upon
defeasance and discharge, the Indenture will cease to be of further effect
with respect to the Debt Securities of such series and the Holders of such
Debt Securities shall look only to the deposited funds or Government
Obligations for payment. Upon covenant defeasance, however, the Company
will not be relieved of its obligation to pay when due principal of and
premium and interest, if any, on the Debt Securities of such series if not
otherwise paid from such deposited funds or Government Obligations.
Notwithstanding the foregoing, certain obligations and rights under the
Indenture with respect to the obligations of the Trustee, compensation,
reimbursement and indemnification of the Trustee, rights of the Holders of
Debt Securities of a series to receive payments from the funds and Government
Obligations deposited with the Trustee for such series, registration of
transfer and exchange of the Debt Securities of such series, replacement of
mutilated, defaced, destroyed, lost or stolen Debt Securities and certain
other administrative provisions will survive defeasance and discharge.
(Section 10.1)
In the event the Company exercises its option to effect a covenant
defeasance with respect to any series of Debt Securities and the Debt
Securities of such series are declared due and payable because of the
occurrence of any Event of Default still applicable to such series, the
amount of money and Government Obligations on deposit with the Trustee may
not be sufficient to pay amounts due on the Debt Securities of such series
at the time of the acceleration resulting from such Event of Default.
However, the Company shall remain liable for such payments. (Section 10.1)
If the Trustee or paying agent is unable to apply any funds or Government
Obligations deposited with respect to a series of Debt Securities in
accordance with the foregoing provisions by reason of any legal proceeding
or by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under the Indenture and the Debt Securities of such
series shall be revived and reinstated as though no deposit had occurred
pursuant to such provisions until such time as the Trustee or paying agent
is permitted to apply all such funds or Government Obligations in accordance
therewith; provided, however, that, if the Company has made any payment of
premium or interest on or principal of any Debt Securities of such series
because of the reinstatement of its obligations, the Company shall be
entitled, at its election, (a) to receive from the Trustee or paying agent,
as applicable, that portion of such money or Government Obligations equal to
the amount of such payment or (b) to be subrogated to the rights of the
Holders of the Debt Securities of such series to receive such payment from
the funds or Government Obligations held by the Trustee or paying agent.
(Section 10.6)
Governing Law
The Indenture and the Debt Securities issued thereunder will be governed
by the laws of the State of New York. (Section 11.8)
Concerning the Trustee
The First National Bank of Chicago, the Trustee under the Indenture, is
one of a number of banks with which the Company and its subsidiaries has
and in the future may have banking relationships in the ordinary course of
business, including, in certain cases, credit facilities. The First
National Bank of Chicago is also the Property Trustee of Equitable Trust, the
Preferred Securities Guarantee Trustee (as defined herein) and an affiliate of
the Delaware Trustee of Equitable Trust.
The Trustee, prior to the occurrence of an Event of Default under the
Indenture, undertakes to perform only such duties as are specifically set forth
in the Indenture and, after an Event of 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 provision, the Trustee is under no obligation to
exercise any of the powers vested in it by the Indenture at the request of any
Holder of Debt Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
DESCRIPTION OF CAPITAL STOCK
The following summary of certain provisions of the Company's Restated
Articles of Incorporation, as amended (the "Articles"), Amended and
Restated Bylaws (the "Bylaws"), and Shareholder Rights Agreement, effective
as of April 30, 1992, as amended, does not purport to be complete and is
subject to and qualified in its entirety by reference to such documents,
copies of which are incorporated by reference as exhibits to the
Registration Statement of which this Prospectus is a part.
Under the Articles, the authorized capital stock of the Company consists
of 70,000,000 shares of common stock, without par value ("Common Stock"),
and 2,500,000 shares of serial preferred stock, without par value ("Preferred
Stock"). As of February 29, 1996, (a) 31,853,432 shares of Common Stock and
(b) no shares of Preferred Stock were outstanding.
DESCRIPTION OF COMMON STOCK
General
All shares of Common Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will be fully paid and non-assessable.
Holders of shares of Common Stock do not have any preemptive rights to
subscribe for or purchase any additional securities of the Company. The
Common Stock is listed on the New York Stock Exchange. The registrar and
transfer agent for the Common Stock is currently Boatmen's Trust Company,
510 Locust Street, P.O. Box 14737, St. Louis, Missouri 63178-4737.
Dividends
Subject to the rights of the holders of any shares of the Company's Preferred
Stock, holders of Common Stock are entitled to receive such dividends as may be
declared from time to time by the Board of Directors of the Company (the
"Board" or the "Board of Directors") out of funds legally available therefor.
Liquidation Rights
Holders of Common Stock are entitled to receive, upon any liquidation of
the Company, all remaining assets available for distribution to shareholders
after satisfaction of the Company's liabilities and the preferential rights
of any Preferred Stock that may then be issued and outstanding.
Voting Rights
The Articles and the Bylaws provide that each outstanding share of Common
Stock is entitled to one vote on each matter to be voted on at a stockholder
meeting, except that the holders of Common Stock have cumulative voting
rights with respect to the election of directors. Cumulative voting permits
holders of shares of the Company's Common Stock to cast, for any one or more
nominees for election to the Board of Directors, the number of votes equal to
the product of the number of shares such shareholder owns and the number of
nominees proposed for election to the Board. A shareholder may cast all of
such votes for a single director or may distribute such votes among any
number of nominees proposed for election.
The affirmative vote of two-thirds of the votes entitled to be cast at a
meeting of the Company's stockholders is required to remove directors for
cause and to effect certain amendments to the Articles.
Shareholder Rights Plan
The Board adopted the Shareholder Rights Agreement (the "Rights Plan"),
effective as of April 30, 1992. In connection with the effectiveness of
the Rights Plan, the Board declared a dividend distribution of one right (a
"Right") for each outstanding share of Common Stock. Each Right, when
exercisable, entitles the registered holder to purchase from the Company
one or more shares of the Company's Common Stock (or in some instances an
equivalent security equal in value to a share of Common Stock) at an
exercise price of $100.00 per Right, subject to adjustment.
Initially the Rights are not exercisable. They will trade with, and
cannot be separated from, the outstanding shares of Common Stock. The
Rights become exercisable (i) ten (10) days following a public announcement
that a person or group of affiliated or associated persons, with the
exception of certain Company related entities (an "Acquiring Person"), has
acquired, or obtained the right to acquire, beneficial ownership of 25% or
more of the Common Stock or (ii) ten (10) days following the commencement
of (or a public announcement of an intention to make) a tender offer or
exchange offer which would result in any person or group of related persons
acquiring beneficial ownership of 25% or more of the Common Stock (the
earlier of such dates being called the "Distribution Date").
The Rights will expire on the earlier of April 30, 2002 or redemption of
the Rights by the Company. The Rights are redeemable at a price of
one-quarter of one cent ($.0025) per Right at any time before a person
becomes an Acquiring Person, or at any time before the Distribution Date.
DESCRIPTION OF PREFERRED STOCK
The following summary contains a description of certain general terms of
the Preferred Stock to which any Prospectus Supplement may relate. Certain
terms of any series of Preferred Stock offered by any Prospectus Supplement
will be described in the Prospectus Supplement relating thereto. If so
specified in the Prospectus Supplement, the terms of any series may differ
from the terms set forth below. The description of certain provisions of
the Preferred Stock does not purport to be complete and is subject to and
qualified in its entirety by reference to the provisions of the Articles
and the amendment thereto relating to each particular series of Preferred
Stock (the "Series Amendment") which will be filed or incorporated by
reference, as the case may be, as an exhibit to the Registration Statement
of which this Prospectus is a part at or prior to the time of the issuance
of such Preferred Stock.
General
Under the Articles, the Board of Directors is authorized, without further
stockholder action, to provide for the issuance of up to 2,500,000 shares
of Preferred Stock. As of the date hereof, no shares of Preferred Stock
were outstanding. The Board of Directors may from time to time authorize
the issuance of shares of Preferred Stock in series, and each such series
shall have such dividend and liquidation preferences, redemption prices,
conversion rights, and other terms and provisions as may be contained in
the resolutions of the Board of Directors providing for their issuance.
All shares of Preferred Stock offered hereby, or issuable upon conversion,
exchange or exercise of Securities, will be, when issued, fully paid and
non-assessable and holders thereof will have no preemptive rights in
connection therewith.
Rank
Any series of Preferred Stock will, with respect to rights on
liquidation, winding up and dissolution, rank (i) senior to all classes of
Common Stock and to all equity securities issued by the Company, the terms
of which specifically provide that such equity securities will rank junior
to such series of Preferred Stock; (ii) on a parity with all equity
securities issued by the Company, the terms of which specifically provide
that such equity securities will rank on a parity with such series of
Preferred Stock; and (iii) junior to all equity securities issued by the
Company, the terms of which specifically provide that such equity
securities will rank senior to such series of Preferred Stock. In addition,
any series of Preferred Stock will, with respect to dividend rights, rank
(i) senior to all equity securities issued by the Company, the terms of
which specifically provide that such equity securities will rank junior to
such series of Preferred Stock and, to the extent provided in the
applicable Series Amendment, to Common Stock, (ii) on a parity with all
equity securities issued by the Company, the terms of which specifically
provide that such equity securities will rank on a parity with such series
of Preferred Stock and, to the extent provided in the applicable Series
Amendment, to Common Stock, and (iii) junior to all equity securities
issued by the Company, the terms of which specifically provide that such
equity securities will rank senior to such series of Preferred Stock. As
used in any Series Amendment for these purposes, the term "equity
securities" will not include debt securities convertible into or
exchangeable for equity securities.
Dividends
Holders of each series of Preferred Stock will be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available therefor, cash dividends at such rates and on such dates as are
set forth in the Prospectus Supplement relating to such series of Preferred
Stock. Such rate may be fixed or variable or both. Dividends will be
payable to holders of record of Preferred Stock as they appear on the books
of the Company on such record dates as shall be fixed by the Board of
Directors. Dividends on any series of Preferred Stock may be cumulative or
noncumulative.
No full dividends may be declared or paid or funds set apart for the
payment of dividends on any series of Preferred Stock unless dividends
shall have been paid or funds set apart for such payment on the equity
securities ranking on a parity with respect to dividends with such series
of Preferred Stock. If full dividends are not so paid, such series of
Preferred Stock shall share dividends pro rata with such other equity
securities.
Conversion and Exchange
The Prospectus Supplement for any series of Preferred Stock will state
the terms, if any, on which shares of that series are convertible into
shares of another series of Preferred Stock or Common Stock or exchangeable
for another series of Preferred Stock, Common Stock or Debt Securities of
the Company. The Common Stock of the Company is described under
"Description of Common Stock".
Redemption
A series of Preferred Stock may be redeemable at any time, in whole or in
part, at the option of the Company or the holder thereof and may be subject
to mandatory redemption pursuant to a sinking fund or otherwise upon terms
and at the redemption prices set forth in the Prospectus Supplement
relating to such series.
In the event of partial redemptions of Preferred Stock, whether by
mandatory or optional redemption, the shares to be redeemed will be
determined by lot or pro rata, as may be determined by the Board of
Directors, or by any other method determined to be equitable by the Board
of Directors.
On and after a redemption date, unless the Company defaults in the
payment of the redemption price, dividends will cease to accrue on shares
of Preferred Stock called for redemption and all rights of holders of such
shares will terminate except for the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution or winding up
of the Company, holders of each series of Preferred Stock will be entitled
to receive out of assets of the Company available for distribution to
shareholders, before any distribution is made on any securities ranking
junior with respect to liquidation, including Common Stock, distributions
upon liquidation in the amount set forth in the Prospectus Supplement
relating to such series of Preferred Stock, plus an amount equal to any
accrued and unpaid dividends. If, upon any voluntary or involuntary
liquidation, dissolution or winding up of the Company, the amounts payable
with respect to the Preferred Stock of any series and any other securities
of the Company ranking on a parity with respect to liquidation rights are
not paid in full, the holders of the Preferred Stock of such series and
such other securities will share ratably in any such distribution of assets
of the Company in proportion to the full liquidation preferences to which
each is entitled. After payment of the full amount of the liquidation
preference to which they are entitled, the holders of Preferred Stock will
not be entitled to any further participation in any distribution of assets
of the Company.
Voting Rights
Except as set forth in the Prospectus Supplement relating to a particular
series of Preferred Stock or except as expressly required by applicable
law, the holders of shares of Preferred Stock will have no voting rights.
Transfer Agent and Registrar
The transfer agent and registrar for each series of Preferred Stock will
be described in the applicable Prospectus Supplement.
LIMITATIONS ON CHANGE IN CONTROL
The purpose of the Rights Plan and certain provisions of the Articles and
the Bylaws are to discourage certain types of transactions that may involve
an actual or threatened change of control of the Company. The Company
believes that the Rights Plan and these provisions are designed to reduce
the vulnerability of the Company to an unsolicited proposal for a takeover
of the Company that does not have the effect of maximizing long-term
stockholder value or is otherwise unfair to stockholders of the Company.
However, the Rights Plan and these provisions, individually and collectively,
make more difficult, and may discourage certain types of potential acquirers
from proposing, a merger, tender offer or proxy contest, even if such
transaction or occurrence may be favorable to the interest of the
stockholders, and may delay or frustrate the assumption of control by a
holder of a large block of Common Stock and the removal of incumbent
management, even if such removal might be beneficial to stockholders. By
discouraging takeover attempts, these provisions might have the incidental
effect of inhibiting certain changes in management and the temporary
fluctuations in the market price of the shares that often result from actual
or considered takeover attempts.
Classified Board of Directors. The Articles provide for the
classification of the Board of Directors into three classes of directors
serving staggered three-year terms, with the classes to be as nearly equal
in number as possible. One class of directors stands for election at each
annual meeting of stockholders. Therefore, at least two stockholder
meetings will generally be required to effect a change in control of the
Board.
Cumulative Voting. As discussed above, cumulative voting permits a
shareholder to distribute votes to one or any number of nominees proposed
for election. As a result, a minority shareholder may be able to prevent
an attempt to gain full control over the Board.
Preferred Stock. Preferred Stock can be issued in one or more series by
the Board of Directors without further stockholder approval. The Board of
Directors has the power to determine the designations, preferences and
rights of each such series. Because the Board of Directors has substantial
discretion in setting the terms of the Preferred Stock, such stock may act
as a defensive measure.
Advance Notice for Stockholder Business Proposals. The Bylaws provide
for an orderly procedure for the notification of the Board of Directors of
business which is to be presented by a stockholder at stockholder meetings.
The procedure is designed to enable the Board to plan such meetings and
also, to the extent it deems necessary or desirable, to inform the stock
holders, prior to the meeting, of any new business that will be presented
at the meeting.
This procedure precludes the conducting of business at a particular
meeting if the proper notice procedures have not been followed. Nothing
precludes discussion by any stockholder of any business properly brought
before the annual meeting of stockholders of the Company.
Advance Notice for Stockholder Nomination Proposals. The Bylaws provide
that only persons who are nominated in accordance with the procedures
specified therein are eligible for election as directors. Such nominations
may be made by the Board of Directors, by any committee appointed by the
Board or by any stockholder of the Company entitled to vote for the
election of directors at the meeting, provided that any stockholder seeking
to nominate a person for election as a director of the Company has complied
with the notice procedures. Written notice of a stockholder nomination
must be made to the Secretary of the Company not later than, with respect
to an annual meeting, 120 days in advance of the date on which the
Company's proxy statement for the preceding year's annual meeting of
stockholders was released. With respect to an election to be held at a
special meeting of stockholders, notice by the stockholder must be
delivered or received not later than the close of business on the tenth day
following the date on which notice of such meeting is first given to
stockholders. This notice must set forth the name and address of the
stockholder who intends to make the nomination and the name and address of
the person being nominated, together with certain other accompanying
information.
Independence Policy. Since 1980, the Board has had an internal
"Continuation Policy" which recognizes the Board's adherence to management
policies designed to enhance the long-term value of the Company. In 1991,
the Board of Directors adopted an Independence Policy which reaffirms its
adherence to such management policies and acknowledges the importance of
the Company's continued independence to the achievement of such policies.
The Independence Policy also indicates that the Board may consider the
interests of the Company's other constituents, such as its employees and
policyholders, as well as the interests of the Company's stockholders, in
evaluating any offer for control of the Company. Under Iowa law, the
consideration by the Board of the interests of such non-stockholder
constituencies is consistent with its fiduciary duties.
Removal of Directors Solely for Cause. The Articles provide that the
directors of the Company may be removed from office by the stockholders
only for cause. Cause is defined as the conviction of a director of a
felony or an adjudication by a court of competent jurisdiction that a
director was liable for negligence or misconduct in the performance of a
director's duty to the Company. This provision makes it more difficult for
the Company's stockholders to remove a director and, thereby, may
discourage outsiders from seeking to acquire control of the Company because
they could be delayed in making changes in existing management.
Employee Benefit Plans. The Company presently has four executive
compensation plans that contain provisions which entitle participants to
certain benefits in the event of a change in control. Under the Company's
Amended and Restated Key Employee Incentive Plan (a cash bonus plan), in
the event of a change in control, any awards that are outstanding become
immediately vested, any performance standards related to the awards are
deemed achieved at target levels and applicable restrictions lapse.
Similarly, under the Company's 1982 Stock Incentive Plan, outstanding
options become exercisable, restrictions on stock awards lapse and any
performance standards are deemed achieved in the event of a change of
control. Under the Company's Restated and Amended 1992 Stock Incentive
Plan, in the event of a change in control, the Compensation Committee of
the Company's Board of Directors may, in its discretion, either at or after
the time an award is made (i) provide for the vesting of any award, (ii)
provide for the Company's purchase of any award upon the participant's
request, (iii) make adjustments to the award to reflect the change in
control, (iv) determine that any performance goals required to be met are
deemed to have been achieved and provide for the acceleration of such an
award, or (v) cause the award to be assumed by the surviving company.
Finally, under the Company's Executive Severance Pay Plan, each eligible
employee terminated subsequent to a change in control is entitled to
receive a maximum severance benefit equal to one year's base salary even
though the full vesting period may not have expired. These measures
individually and in the aggregate may have an anti-takeover effect.
State Insurance Laws. The insurance laws and regulations of the
jurisdictions in which the Company or its insurance subsidiaries do
business may impede or delay a business combination involving the Company.
INDEMNIFICATION
The Articles provide that directors shall not be liable to the Company or
its stockholders for monetary damages for breach of fiduciary duty as a
director, to the fullest extent permitted by the Iowa Business Corporation
Act (the "IBCA"). The IBCA provides in such case that a director shall not
be liable for monetary damages for breach of fiduciary duty as a director,
except for (i) a breach of the duty of loyalty to the Company or its
stockholders, (ii) acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of law, (iii) transactions from
which the director derives improper personal benefit, or (iv) liability for
an unlawful distribution under the IBCA.
The Articles and Bylaws provide that the Company shall indemnify its
directors, officers, employees and agents to the fullest extent permitted
by the IBCA. The IBCA provides that a company may indemnify its officers
and directors if (i) the person acted in good faith and (ii) the person
reasonably believed, in the case of conduct in the person's official
capacity with the company, that the conduct was in the company's best
interests, and in all other cases, that the person's conduct was at least
not opposed to the company's best interests and (iii) in the case of any
criminal proceeding, the person had no reasonable cause to believe the
person's conduct was unlawful. The Company is required to indemnify
officers and directors against reasonable expenses incurred in connection
with any proceeding in which they are wholly successful, on the merits or
otherwise, to which the person may be a party because of the person's
position with the Company. If the proceeding is by or in the right of the
Company, indemnification may be made only for reasonable expenses and may
not be made in respect of any proceeding in which the person shall have
been adjudged liable to the Company. Further, any such person may not be
indemnified in respect of any proceeding that charges improper personal
benefit to the person, in which the person shall have been adjudged to be
liable.
The Company maintains directors' and officers' liability insurance, which
indemnifies directors and officers of the Company against certain damages
and expenses relating to certain claims against them caused by negligent
acts, errors or omissions.
DESCRIPTION OF WARRANTS
The Company may issue Warrants, including Warrants to purchase Debt
Securities, Preferred Stock, Common Stock , or any combination thereof.
Warrants may be issued independently or together with any such Securities
and may be attached to or separate from such Securities. The Warrants are
to be issued under warrant agreements (each a "Warrant Agreement") to be
entered into between the Company and a bank or trust company, as warrant
agent (the "Warrant Agent"), all as shall be set forth in the applicable
Prospectus Supplement. No warrants may be issued to purchase Preferred
Securities or Common Securities issued by Equitable Trust.
The applicable Prospectus Supplement will describe the terms of any
Warrants in respect of which this Prospectus is being delivered, including
the following: (i) the title of such Warrants; (ii) the aggregate number
of such Warrants; (iii) the price or prices at which such Warrants will be
issued; (iv) the currency or currencies, including composite currencies, in
which the price of such Warrants may be payable; (v) the designation, amount
and terms of the Securities (other than Preferred Securities) purchasable upon
exercise of such Warrants; (vi) the price at which and the currency or
currencies, including composite currencies, in which the Securities (other
than Preferred Securities) purchasable upon exercise of such Warrants may
be purchased; (vii) the date on which the right to exercise such Warrants
shall commence and the date on which such right shall expire; (viii)
whether such Warrants will be issued in registered form or bearer form;
(ix) if applicable, the minimum or maximum amount of such Warrants which
may be exercised at any one time; (x) if applicable, the designation and
terms of the Securities (other than Preferred Securities) with which such
Warrants are issued and the number of such Warrants issued with each such
Security; (xi) if applicable, the date on and after which such Warrants and
the related Securities (other than Preferred Securities) will be separately
transferable; (xii) information with respect to book-entry procedures, if
any; (xiii) if applicable, a discussion of certain United States federal
income tax considerations; and (xiv) any other terms of such Warrants,
including terms, procedures and limitations relating to the exchange and
exercise of such Warrants.
DESCRIPTION OF PREFERRED SECURITIES OF EQUITABLE TRUST
The following summary of certain provisions of the Declaration of Trust
of Equitable Trust (the "Declaration") 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 included as an exhibit to the Registration
Statement of which this Prospectus is a part.
Equitable Trust may issue a series of Preferred Securities having terms
described in the Prospectus Supplement relating thereto. The Declaration
authorizes the Regular Trustees of Equitable Trust to issue on behalf of
Equitable Trust one series of Preferred Securities. The Declaration will
be qualified as an indenture under the Trust Indenture Act. The 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 established by the Regular
Trustees in accordance with the Declaration or 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 Preferred
Securities of Equitable Trust for specific terms of the Preferred Securities,
including, to the extent applicable, (i) the distinctive designation of such
Preferred Securities, (ii) the number of Preferred Securities issued by
Equitable Trust, (iii) the annual distribution rate (or method of determining
such rate) for Preferred Securities issued by Equitable Trust and the date or
dates upon which such distributions shall be payable (provided, however,
that distributions on such Preferred Securities shall, subject to any
deferral provisions, and any provisions for payment of defaulted
distributions, be payable on a quarterly basis to Holders of such
Preferred Securities as of a record date in each quarter during which such
Preferred Securities are outstanding), (iv) any right of Equitable Trust to
defer quarterly distributions on the Preferred Securities as a result of an
interest deferral right exercised by the Company on the Debt Securities
held by Equitable Trust; (v) whether distributions on Preferred Securities
shall be cumulative, and, in the case of Preferred Securities having such
cumulative distribution rights, the date or dates or method of determining
the date or dates from which distributions on Preferred Securities shall be
cumulative, (vi) the amount or amounts which shall be paid out of the
assets of Equitable Trust to the Holders of Preferred Securities upon
voluntary or involuntary dissolution, winding-up or termination of
Equitable Trust, (vii) the obligation or option, if any, of Equitable Trust
to purchase or redeem Preferred Securities and the price or prices at
which, the period or periods within which and the terms and conditions upon
which Preferred Securities shall be purchased or redeemed, in whole or in
part, pursuant to such obligation or option, (viii) the voting rights, if
any, of Preferred Securities in addition to those required by law,
including the number of votes per Preferred Security and any requirement
for the approval by the Holders of Preferred Securities as a condition to
specified action or amendments to the Declaration, (ix) the terms and
conditions, if any, upon which Debt Securities held by Equitable Trust may
be distributed to holders of Preferred Securities, and (x) any other
relevant rights, preferences, privileges, limitations or restrictions of
Preferred Securities consistent with the Declaration or with applicable
law. All Preferred Securities offered hereby will be guaranteed by the
Company to the extent set forth below under "Description of Trust
Guarantee." Certain United States federal income tax considerations
applicable to any offering of Preferred Securities will be described in the
Prospectus Supplement relating thereto.
The Declaration authorizes the Regular Trustees to issue on behalf of
Equitable Trust one series of Common Securities having such terms including
distributions, redemption, voting, liquidation rights or such restrictions
as shall be established by the Regular Trustees in accordance with the
Declaration or as shall otherwise be set forth therein. The terms of the
Common Securities issued by Equitable Trust will be substantially identical
to the terms of the Preferred Securities issued by Equitable Trust, and the
Common Securities will rank pari passu, and payments will be made thereon
pro rata, with the Preferred Securities except that, if an event of default
under the Declaration has occurred and is continuing, the rights of the
holders of the Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise will be subordinated to
the rights of the holders of the Preferred Securities. An event of default
under the Declaration will be deemed to have occurred whenever an event of
default (as defined in the Indenture) shall have occurred with respect to
the Debt Securities held by Equitable Trust. Except in certain limited
circumstances, the Common Securities will also carry the right to vote and
to appoint, remove or replace any of the Equitable Trustees of Equitable
Trust. All of the Common Securities of Equitable Trust will be directly or
indirectly owned by the Company.
DESCRIPTION OF TRUST GUARANTEE
Set forth below is a summary of information concerning the Trust
Guarantee that will be executed and delivered by the Company for the
benefit of the holders, from time to time, of Preferred Securities. The
Trust Guarantee will be qualified as an indenture under the Trust Indenture
Act. The First National Bank of Chicago will act as indenture trustee
under the Trust Guarantee (the "Preferred Securities Guarantee Trustee").
The terms of the 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 of certain provisions of the Trust Guarantee
does not purport to be complete and is subject to and qualified in its
entirety by reference to the provisions of the form of Trust Guarantee, a
copy of which has been filed as an exhibit to the Registration Statement of
which this Prospectus is a part, and the Trust Indenture Act. The Trust
Guarantee will be held by the Preferred Securities Guarantee Trustee for
the benefit of the holders of the Preferred Securities of Equitable Trust.
General
Pursuant to the Trust Guarantee, the Company will irrevocably and
unconditionally agree, to the extent set forth therein, to pay in full to
the holders of the Preferred Securities, the Trust Guarantee Payments (as
defined below) (except to the extent paid by Equitable Trust), as and when
due, regardless of any defense, right of set-off or counterclaim which
Equitable Trust may have or assert. The following payments or distributions
with respect to the Preferred Securities (the "Trust Guarantee Payments"), to
the extent not paid by Equitable Trust, will be subject to the Trust Guarantee
(without duplication): (i) any accrued and unpaid distributions that are
required to be paid on such Preferred Securities, to the extent Equitable
Trust shall have funds available therefor, (ii) the redemption price,
including all accrued and unpaid distributions to the date of redemption (the
"Redemption Price"), to the extent Equitable Trust has funds available
therefor, with respect to any Preferred Securities called for redemption by
Equitable Trust and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of Equitable Trust (other than in connection with
the distribution of Debt Securities to the holders of Preferred Securities or
the redemption of all of the Preferred Securities upon maturity or redemption
of the Debt Securities) the lesser of (a) the aggregate of the liquidation
amount and all accrued and unpaid distributions on such Preferred Securities
to the date of payment, to the extent Equitable Trust has funds available
therefor or (b) the amount of assets of Equitable Trust remaining for
distribution to holders of such Preferred Securities in liquidation of
Equitable Trust. The Company's obligation to make a Trust Guarantee Payment
may be satisfied by direct payment of the required amounts by the Company to
the holders of Preferred Securities or by causing Equitable Trust to pay such
amounts to such holders.
The Trust Guarantee will be a full and unconditional guarantee with respect
to the Preferred Securities from the time of issuance of such Preferred
Securities but will not apply to any payment of distributions except to the
extent Equitable Trust shall have funds available therefor. If the Company
does not make interest or principal payments on the Debt Securities purchased
by Equitable Trust, Equitable Trust will not pay distributions on the
Preferred Securities issued by Equitable Trust and will not have funds
available therefor.
The Company has also agreed to irrevocably and unconditionally guarantee
the obligations of Equitable Trust with respect to the Common Securities
(the "Trust Common Guarantee") to the same extent as the Trust Guarantee,
except that, if an Event of Default under the Indenture has occurred and is
continuing, holders of Preferred Securities under the Trust Guarantee
shall have priority over holders of the Common Securities under the Trust
Common Guarantee with respect to distributions and payments on liquidation,
redemption or otherwise.
Certain Covenants of the Company
In the Trust Guarantee, the Company will covenant that, so long as any
Preferred Securities remain outstanding, if there shall have occurred any
event of default under the Trust Guarantee or under the Declaration, then
(a) the Company 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; (b) the
Company 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 Company which rank pari passu with or junior to
the Debt Securities issued to Equitable Trust and (c) the Company shall not
make any guarantee payments with respect to the foregoing (other than
pursuant to the Trust Guarantee)provided, however, that the Company may
declare and pay a stock dividend where the dividend stock is the same stock
as that on which the dividend is being paid.
Modification of the Trust Guarantees; Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of Preferred Securities (in which case no consent of such
holders will be required), the 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 Preferred Securities. The manner of obtaining
any such approval of holders of such Preferred Securities will be set forth
in an accompanying Prospectus Supplement. All guarantees and agreements
contained in the Trust Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to
the benefit of the holders of the Preferred Securities then outstanding.
Events of Default
An event of default under the Trust Guarantee will occur upon the failure
of the Company to perform any of its payment or other obligations
thereunder. 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 Preferred
Securities Guarantee Trustee in respect of the Trust Guarantee or to direct
the exercise of any trust or power conferred upon the Preferred Securities
Guarantee Trustee under the Trust Guarantee.
If the Preferred Securities Guarantee Trustee fails to enforce the Trust
Guarantee, any holder of Preferred Securities may institute a legal proceeding
directly against the Company to enforce its rights under the Trust
Guarantee without first instituting a legal proceeding against Equitable
Trust, the Preferred Securities Guarantee Trustee or any other person or
entity. The Company has waived any right or remedy to require that any action
be brought first against Equitable Trust or any other person or entity
before proceeding directly against the Company.
The Company will be required to provide annually to the Preferred
Securities Guarantee Trustee a statement as to the performance by the
Company of certain of its obligations under the Trust Guarantee and as to
any default in such performance.
Information Concerning the Preferred Securities Guarantee Trustee
The 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 the 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
Preferred Securities Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by the Trust Guarantee at the request of any holder
of Preferred Securities unless it is offered reasonable indemnity against the
costs, expenses and liabilities that might be incurred thereby.
Termination of the Trust Guarantee
The Trust Guarantee will terminate as to the Preferred Securities upon
full payment of the Redemption Price of all Preferred Securities, upon
distribution of the Debt Securities held by Equitable Trust to the holders
of all of the Preferred Securities or upon full payment of the amounts
payable in accordance with the Declaration upon liquidation of Equitable
Trust. The Trust 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 such Preferred
Securities or the Trust Guarantee.
Status of the Trust Guarantee
The Trust Guarantee will constitute an unsecured obligation of the
Company and will rank (i) subordinate and junior in right of payment to all
other liabilities of the Company, including the Debt Securities, except
those liabilities of the Company made pari passu or subordinate by their
terms, (ii) pari passu with the most senior preferred or preference stock
now or hereafter issued by the Company and with any guarantee now or
hereafter entered into by the Company in respect of any preferred or
preference stock of any affiliate of the Company and (iii) senior to the
Company's Common Stock. The terms of the Preferred Securities provide that
each holder of Preferred Securities by acceptance thereof agrees to the
subordination provisions and other terms of the Trust Guarantee.
The 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 Company to enforce its rights under the Trust Guaran
tee without instituting a legal proceeding against any other person or
entity).
Governing Law
The Trust Guarantee will be governed by and construed in accordance with
the law of the State of Iowa.
PLAN OF DISTRIBUTION
The Company and Equitable Trust may offer and sell Securities in any of
the following ways: (i) directly to purchasers, (ii) through agents, (iii)
through underwriters, (iv) through dealers or (v) through a combination of
any such methods. The Prospectus Supplement with respect to an offering of
Securities will set forth the terms of such offering, including, to the
extent applicable, the name or names of any underwriters (and any managing
underwriters), the names of any dealers or agents, the purchase price of
the Securities and the proceeds to the Company or Equitable Trust from such
sale, any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation, any initial
public offering price and any discounts or concessions allowed or reallowed
or paid to dealers and any securities exchanges or interdealer quotation
system on which such Securities are expected to be listed. Any initial
public offering price and any discounts or concessions allowed or reallowed
or paid to dealers may be changed from time to time.
Securities may be offered and sold, and offers to purchase such
securities may be solicited, by agents designated by the Company or
Equitable Trust from time to time. Any such agent involved in the offer or
sale of the Securities in respect of which this Prospectus is delivered
will be named, and the terms of such agency (including any commissions
payable by the Company or Equitable Trust to such agent) will be set forth,
in the applicable Prospectus Supplement. Unless otherwise indicated in
such Prospectus Supplement, any such agent will be acting on a best efforts
basis for the period of its appointment.
If an underwriter or underwriters are utilized in the sale of Securities,
the Company or Equitable Trust will execute an underwriting agreement with
such underwriter or underwriters at the time an agreement for such sale is
reached, and the names of the managing underwriter or managing underwriters,
as well as any other underwriters, and the terms of the transaction, including
commissions, discounts and other compensation of the underwriters and dealers,
if any, will be set forth in the Prospectus Supplement, which will be used by
the underwriters to make resales of the Securities in respect of which such
Prospectus Supplement is delivered to the public. If underwriters are used
in the sale, such underwriters will acquire Securities for their own account
and may resell such Securities from time to time in one or more transactions,
including negotiated transactions, at fixed public offering prices or at
varying prices determined by the underwriter at the time of sale. Securities
may be offered to the public either through underwriting syndicates
represented by managing underwriters, or directly by underwriters without a
syndicate. Only underwriters named in the Prospectus Supplement are deemed
to be underwriters in connection with the Securities offered thereby. If any
underwriters are utilized in the sale of the Securities, unless otherwise set
forth in the Prospectus Supplement relating thereto the underwriting agreement
will provide that the obligations of the underwriters are subject to certain
conditions precedent and that the underwriters with respect to a sale of
Securities will be obligated to purchase all such Securities, if any are
purchased.
If a dealer is utilized in the sale of the Securities, the Company or
Equitable Trust will sell such Securities to the dealer, as principal. The
dealer may then resell such Securities to the public at varying prices to
be determined by such dealer at the time of resale. The name of the dealer
and the terms of the transaction will be set forth in the Prospectus
Supplement relating thereto.
Agents, underwriters and dealers may be entitled under agreements that
may be entered into with the Company or Equitable Trust to indemnification
by the Company or Equitable Trust against certain liabilities, including
liabilities under the Securities Act of 1933, as amended, or to
contribution with respect to payments which the agents, underwriters or
dealers may be required to make in respect thereof. Agents, underwriters
and dealers may be customers of, engage in transactions with, or perform
services for the Company and affiliates of the Company. Any agents,
dealers or underwriters participating in the offering of Securities may be
deemed "underwriters" within the meaning of the Securities Act of 1933, as
amended, of the Securities so offered.
Offers to purchase Securities may be solicited directly by the Company or
Equitable Trust and sales thereof may be made by the Company or Equitable
Trust directly 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, including the terms of
any bidding or auction process, if utilized, will be described in the
Prospectus Supplement relating thereto.
Each series of Securities (other than Common Stock) will be a new issue
of securities and may have no established trading market. Agents and
underwriters may from time to time purchase and sell Securities in the
secondary market or may make a market in the Securities, but are not
obligated to do so, and there can be no assurance that there will be a
secondary market for the Securities or liquidity in the secondary market if
one develops.
If so indicated in the applicable Prospectus Supplement, the Company or
Equitable Trust will authorize agents, underwriters or dealers to solicit
offers by certain institutions to purchase Securities from the Company or
Equitable Trust at the public offering price set forth in the applicable
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on a specified date in the future. A
commission indicated in the applicable Prospectus Supplement will be paid to
underwriters, dealers or agents soliciting purchases of Securities pursuant
to Contracts accepted by the Company or Equitable Trust. The Contracts will
be subject to the conditions set forth in the applicable Prospectus
Supplement.
As one of the means of direct issuances of Securities, the Company or
Equitable Trust may utilize the services of an entity through which it may
conduct an electronic "dutch auction" or similar offering of the Securities
among potential purchasers who are eligible to participate in the auction or
offering of such Securities, if so described in the applicable Prospectus
Supplement.
The anticipated place and time of delivery for the Securities in respect
of which this Prospectus is delivered will be set forth in the applicable
Prospectus Supplement.
LEGAL MATTERS
The validity of the Securities offered hereby other than the Preferred
Securities will be passed upon for the Company and Equitable Trust by
Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien, P.C., 1900
Hub Tower, Des Moines, Iowa 50309. Certain United States federal income
taxation matters also will be passed upon for the Company and Equitable
Trust by Nyemaster, Goode, McLaughlin, Voigts, West, Hansell & O'Brien,
P.C. Attorneys in such law firm hold shares of Common Stock without par
value of the Company. Certain matters of Delaware law relating to the
validity of the Preferred Securities will be passed upon for Equitable
Trust by Richards, Layton & Finger, P.A., One Rodney Square, Wilmington,
Delaware 19899, special Delaware counsel to Equitable Trust. Certain
legal matters in connection with the Securities will be passed upon for the
underwriter(s), dealer(s) or agent(s) by LeBoeuf, Lamb, Greene & MacRae,
L.L.P., a limited liability partnership including professional
corporations, 125 West 55th Street, New York, New York 10019-5389. As to
certain matters of Iowa law, LeBoeuf, Lamb, Greene & MacRae, L.L.P. may rely
upon the opinions of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.
EXPERTS
The consolidated financial statements and schedules of the Company
appearing in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995 incorporated by reference in this Prospectus, 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 audited financial
statements and schedules to be included in subsequently filed documents
will be, incorporated herein in reliance upon the reports of Ernst & Young
LLP 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.
Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission registration fee $94,828.25
New York Stock Exchange Listing Fee 40,000
Legal fees and expenses 135,000
Accounting fees and expenses 50,000
Printing and engraving expenses 40,000
Trustee's fees and expenses 5,000
Rating Agencies' fees 180,000
Blue Sky Fees and Expenses 15,000
Miscellaneous 15,171.75
Total $575,000
=========
Except for the SEC registration fee, all of the foregoing are estimates.
Item 15. Indemnification of Officers and Directors
The Company's Restated Articles of Incorporation and Amended and Restated
Bylaws provide that the Company shall indemnify its directors, officers,
employees and agents to the fullest extent permitted by the Iowa Business
Corporation Act (the "IBCA"). The IBCA provides that a company may
indemnify its officers and directors if (i) the person acted in good faith,
and (ii) the person reasonably believed, in the case of conduct in the
person's official capacity with the Company, that the conduct was in the
Company's best interests, and in all other cases, that the person's conduct
was at least not opposed to the Company's best interests, and (iii) in the
case of any criminal proceeding, the person had no reasonable cause to
believe the person's conduct was unlawful. The Company is required to
indemnify officers and directors against reasonable expenses incurred in
connection with any proceeding in which they are wholly successful, on the
merits or otherwise, to which the person may be a party because of the
person's position with the Company. If the proceeding is by or in the
right of the Company, indemnification may be made only for reasonable
expenses and may not be made in respect of any proceeding in which the person
shall have been adjudged liable to the Company. Further, any such person may
not be indemnified in respect of any proceeding that charges improper
personal benefit to the person, in which the person shall have been adjudged
to be liable.
The Company maintains directors' and officers' liability insurance, which
indemnifies directors and officers of the Company against certain damages
and expenses relating to claims against them caused by negligent acts,
errors or omissions.
The Declaration of Equitable Trust provides that no Property Trustee or
any of its Affiliates, Delaware Trustee or any of its Affiliates, or any
officer, director, shareholder, member, partner, employee, representative,
custodian, nominee or agent of the Property 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
Affiliate thereof, or any employee or agent of Equitable Trust or its
Affiliates (each a "Company Indemnified Person") shall be liable,
responsible or accountable in damages or otherwise to Equitable Trust or
any officer, director, shareholder, partner, member, representative,
employee or agent of Equitable Trust or its Affiliates or to any holder of
Preferred Securities 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 Equitable
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 willful
misconduct with respect to such acts or omissions.
The Declaration of Equitable Trust also provides that to the full extent
permitted by law, the Company 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 Equitable 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 Equitable Trust, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his con-
duct was unlawful. The Declaration of Equitable Trust also provides that
to the full extent permitted by law, the Company 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 Equitable 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 Equitable 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 Equitable 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 Equitable
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 the Company 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 Company as authorized in the Declaration.
The directors and officers of the Company and the Regular Trustees are
covered by insurance policies indemnifying them against certain liabilities,
including certain liabilities arising under the Securities Act of 1933, as
amended (the "Securities Act"), which might be incurred by them in such
capacities and against which they cannot be indemnified by the Company or
Equitable Trust. Any agents, dealers or underwriters who execute any of the
agreements filed as Exhibit 1 to this Registration Statement will agree to
indemnify the Company's directors and their officers and the Equitable
Trustees who signed the Registration Statement against certain liabilities
that may arise under the Securities Act with respect to information furnished
to the Company or Equitable Trust by or on behalf of any such indemnifying
party.
The Declaration of Equitable Trust also provides that the Company shall
indemnify each Fiduciary Indemnified Person 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 under the Equitable Trust, 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 thereunder.
Item 16. Exhibits
Exhibit
Number Description of Exhibit
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Equity Securities*
1.3 Form of Underwriting Agreement for Preferred Securities*
4.1 Restated Articles of Incorporation of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 3(a) to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1993)
4.2 Amendment(s) to the Restated Articles of Incorporation of Equitable
of Iowa Companies with respect to a series of Preferred Stock*
4.3 Amended and Restated Bylaws of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 2 to the Company's Form
8-K dated November 11, 1991)
4.4 Rights Agreement (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K dated April 30, 1992)
4.5 First Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 4(b)(ii) to the Company's Quarterly Report on
Form 10-Q for the period ended September 30, 1992)
4.6 Second Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 2.2 to the Company's Form 8-A dated May 13,
1993)
4.7 Indenture dated as of January 17, 1995 by and between Equitable of
Iowa Companies and the First National Bank of Chicago, as Trustee,
pursuant to which the Debt Securities are to be issued (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 Registration No. 33-57343 filed January 18, 1995)
4.8 Certificate of Trust of Equitable of Iowa Companies Capital Trust
4.9 Declaration of Trust of Equitable of Iowa Companies Capital Trust
4.10 Form of Preferred Securities Guarantee Agreement by Equitable of
Iowa Companies
4.11 Form of Debt Security*
4.11 Form of Preferred Stock*
4.12 Form of Warrant Agreement*
4.13 Form of Preferred Security*
5.1 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.
5.2 Opinion of Richards, Layton & Finger, P.A.
8 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. as to certain federal income taxation matters*
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. (included in Exhibits 5.1 and 8 hereto)
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2 hereto)
23.3 Consent of Independent Auditors, Ernst & Young LLP
24 Power of Attorney (set forth on the signature page of this
Registration Statement)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Declaration of Equitable of Iowa Companies Capital
Trust
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee of the Trust Preferred Securities Guarantee for the benefit
of the holders of Preferred Securities of Equitable of Iowa
Companies Capital Trust
_________________
* To be filed by amendment or incorporated by reference from other
documents filed with the Commission.
Item 17. Undertakings
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in 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 paragraphs (a)(1)(i) and (a)(1)(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 the
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the Registration Statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) If the securities to be registered are to be offered at competitive
bidding, the undersigned Registrant hereby undertakes: (1) to use
its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number
of copies of a prospectus which at that time meets the requirements
of Section 10(a) of the Act, and relating to the securities offered
at competitive bidding, as contained in the Registration Statement,
together with any supplements thereto, and (2) to file an amendment
to the Registration Statement reflecting the results of bidding, the
terms of the reoffering and related matters to the extent required
by the applicable form, not later than the first use, authorized by
the issuer after the opening of bids, of a prospectus relating to
the securities offered at competitive bidding, unless no further
public offering of such securities by the issuer and no reoffering
of such securities by the purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of
any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.
(e) The undersigned Registrant hereby undertakes that
(1) for purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon
Rule 430A and contained in a form of prospectus filed by the
Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective; and
(2) for the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(f) The undersigned Registrant hereby undertakes to file, if necessary,
an application for the purpose of determining the eligibility of
the Trustee to act under subsection (a) of Section 310 of the Trust
Indenture Act of 1939, as amended, in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission
under Section 305(b)(2) of such Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Equitable of
Iowa Companies certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Des Moines, State of Iowa, on
March 22, 1996.
EQUITABLE OF IOWA COMPANIES
By /s/ Fred S. Hubbell
______________________
Fred S. Hubbell
Chairman, President and Chief
Executive Officer
(Principal Executive Officer)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Fred S. Hubbell, Paul E. Larson and
John A. Merriman, and each of them, as true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities to sign any or all
amendments, including post-effective amendments, to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
either of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Name Title Date
/s/ Fred S. Hubbell Chairman of the Board, President March 22, 1996
________________________ and Chief Executive Officer
Fred S. Hubbell (Principal Executive Officer)
/s/ Paul E. Larson Executive Vice President, Treasurer March 22, 1996
________________________ and Chief Financial Officer
Paul E. Larson (Principal Financial Officer)
/s/ David A. Terwilliger Vice President and Controller March 22, 1996
________________________ (Principal Accounting Officer)
David A. Terwilliger
/s/ Richard B. Covey Director March 22, 1996
________________________
Richard B. Covey
/s/ Doris M. Drury Director March 22, 1996
________________________
Doris M. Drury
/s/ James L. Heskett Director March 22, 1996
________________________
James L. Heskett
/s/ Richard S. Ingham, Jr. Director March 22, 1996
________________________
Richard S. Ingham, Jr.
/s/ Robert E. Lee Director March 22, 1996
________________________
Robert E. Lee
/s/ Jack D. Rehm Director March 22, 1996
________________________
Jack D. Rehm
/s/ Thomas N. Urban Director March 22, 1996
________________________
Thomas N. Urban
/s/ Hans F. E. Wachtmeister Director March 22, 1996
___________________________
Hans F. E. Wachtmeister
/s/ Richard S. White Director March 22, 1996
________________________
Richard S. White
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Equitable
of Iowa Companies Capital Trust certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-3 and
has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Des Moines,
State of Iowa, on March 22, 1996.
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Fred S. Hubbell, Paul E. Larson and
John A. Merriman, and each of them, as true and lawful attorneys-in-fact
and agents with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities to sign any or all
amendments, including post-effective amendments, to this Registration
Statement, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of
them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or
either of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof.
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST
By /s/ Fred S. Hubbell
_________________________
Fred S. Hubbell, as Trustee
By /s/ Paul E. Larson
________________________
Paul E. Larson, as Trustee
By /s/ John A. Merriman
________________________
John A. Merriman, as Trustee
EXHIBIT INDEX
to Registration Statement
on Form S-3
EQUITABLE OF IOWA COMPANIES
Exhibit
Number Description of Exhibit
1.1 Form of Underwriting Agreement for Debt Securities*
1.2 Form of Underwriting Agreement for Equity Securities*
1.3 Form of Underwriting Agreement for Preferred Securities*
4.1 Restated Articles of Incorporation of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 3(a) to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1993)
4.2 Amendment(s) to the Restated Articles of Incorporation of Equitable
of Iowa Companies with respect to a series of Preferred Stock*
4.3 Amended and Restated Bylaws of Equitable of Iowa Companies
(incorporated herein by reference to Exhibit 2 to the Company's Form
8-K dated November 11, 1991)
4.4 Rights Agreement (incorporated herein by reference to Exhibit 1 to
the Company's Form 8-K dated April 30, 1992)
4.5 First Amendment to Rights Agreement (incorporated herein by reference
to Exhibit 4(b)(ii) to the Company's Quarterly Report on Form 10-Q
for the period ended September 30, 1992)
4.6 Second Amendment to Rights Agreement (incorporated herein by
reference to Exhibit 2.2 to the Company's Form 8-A dated May 13,
1993)
4.7 Indenture dated as of January 17, 1995 by and between Equitable of
Iowa Companies and the First National Bank of Chicago, as Trustee,
pursuant to which the Debt Securities are to be issued (incorporated
by reference to Exhibit 4.1 to the Company's Registration Statement
on Form S-3 Registration No. 33-57343 filed January 18, 1995)
4.8 Certificate of Trust of Equitable of Iowa Companies Capital Trust
4.9 Declaration of Trust of Equitable of Iowa Companies Capital Trust
4.10 Form of Preferred Securities Guarantee Agreement by Equitable of
Iowa Companies
4.11 Form of Debt Security*
4.12 Form of Preferred Stock*
4.13 Form of Warrant Agreement*
4.14 Form of Preferred Security*
5.1 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C.
5.2 Opinion of Richards, Layton & Finger, P.A.
8 Opinion of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. as to certain federal income taxation matters*
12 Computation of Ratio of Earnings to Fixed Charges
23.1 Consent of Nyemaster, Goode, McLaughlin, Voigts, West, Hansell &
O'Brien, P.C. (included in Exhibits 5.1 and 8 hereto)
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2 hereto)
23.3 Consent of Independent Auditors, Ernst & Young LLP
24 Power of Attorney (set forth on the signature page of this
Registration Statement)
25.1 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Indenture
25.2 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee under the Declaration of Equitable of Iowa Companies Capital
Trust
25.3 Statement of Eligibility on Form T-1 under the Trust Indenture Act
of 1939, as amended, of The First National Bank of Chicago, as
Trustee of the Trust Preferred Securities Guarantee for the benefit
of the holders of Preferred Securities of Equitable of Iowa
Companies Capital Trust
_________________
* To be filed by amendment or incorporated by reference from other
documents filed with the Commission.
EXHIBIT 4.8
CERTIFICATE OF TRUST
The undersigned, the trustees of Equitable of Iowa Companies Capital
Trust, desiring to form a business trust pursuant to Delaware Business
Trust Act, 12 Del. C. Section 3810, hereby certify as follows:
1. The name of the business trust being formed hereby (the "Trust")
is "Equitable of Iowa Companies Capital Trust."
2. The name and business address of the trustee of the Trust which
has its principal place of business in the State of Delaware is
as follows:
First Chicago Delaware, Inc.
c/o FCC National Bank
300 King Street
Wilmington, Delaware 19801
3. This Certificate of Trust shall be effective as of the date of
filing with the office of the Secretary of State of the State of
Delaware.
IN WITNESS WHEREOF, the undersigned have executed this Certificate of
Trust as of the date written below.
Dated: March 19, 1996
/s/ Fred S. Hubbell THE FIRST NATIONAL BANK OF CHICAGO,
Fred S. Hubbell, Trustee as Trustee
By: /s/ R. D. Manella
/s/ Paul E. Larson Name: R. D. Manella
Paul E. Larson, Trustee Title: Vice President
/s/ John A. Merriman FIRST CHICAGO DELAWARE, INC.,
John A. Merriman, Trustee as Trustee
By: /s/ L. Dillard
Name: L. Dillard
Title: Vice President
EXHIBIT 4.9
======================================
DECLARATION OF TRUST
EQUITABLE OF IOWA COMPANIES
CAPITAL TRUST
Dated as of March 19, 1996
======================================
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by the Property Trustee
SECTION 2.4 Periodic Reports to the Property Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Events of Default; Waiver
SECTION 2.7 Event of Default; Notice
ARTICLE III
ORGANIZATION
SECTION 3.1 Name and Organization
SECTION 3.2 Office
SECTION 3.3 Purpose
SECTION 3.4 Authority
SECTION 3.5 Title to Property of the Trust
SECTION 3.6 Powers and Duties of the Regular Trustees
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees
SECTION 3.8 Powers and Duties of the Property Trustee
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee
SECTION 3.10 Certain Rights of Property Trustee
SECTION 3.11 Delaware Trustee
SECTION 3.12 Execution of Documents
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities
SECTION 3.14 Duration of Trust
SECTION 3.15 Mergers
SECTION 3.16 Property Trustee May File Proofs of Claim
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities
SECTION 4.2 Responsibilities of the Sponsor
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees
SECTION 5.2 Delaware Trustee
SECTION 5.3 Property Trustee; Eligibility
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally
SECTION 5.5 Initial Trustees
SECTION 5.6 Appointment, Removal and Resignation of Trustees
SECTION 5.7 Vacancies among Trustees
SECTION 5.8 Effect of Vacancies
SECTION 5.9 Meetings
SECTION 5.10 Delegation of Power
SECTION 5.11 Merger, Conversion, Consolidation or Succession to Business
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities
SECTION 9.2 Transfer of Certificates
SECTION 9.3 Deemed Security Holders
SECTION 9.4 Book Entry Interests
SECTION 9.5 Notices to Clearing Agency
SECTION 9.6 Appointment of Successor Clearing Agency
SECTION 9.7 Definitive Preferred Security Certificates
SECTION 9.8 Mutilated, Destroyed, Lost or Stolen Certificates
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability
SECTION 10.2 Exculpation
SECTION 10.3 Fiduciary Duty
SECTION 10.4 Indemnification
SECTION 10.5 Outside Businesses
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year
SECTION 11.2 Certain Accounting Matters
SECTION 11.3 Banking
SECTION 11.4 Withholding
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments
SECTION 12.2 Meetings of the Holders of Securities; Action by Written Consent
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of the Property Trustee
SECTION 13.2 Representations and Warranties of the Delaware Trustee
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices
SECTION 14.2 Governing Law
SECTION 14.3 Intention of the Parties
SECTION 14.4 Headings
SECTION 14.5 Successors and Assigns
SECTION 14.6 Partial Enforceability
SECTION 14.7 Counterparts
CROSS-REFERENCE TABLE *
Section of Trust
Indenture Act Section of
of 1939, as amended Declaration
310(a) 5.3(a)
310(b) 5.3(c)
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
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(e) 2.5
315(a) 3.9(b)
315(b) 2.7
315(c) 3.9(a)
315(d) 3.9(b)
316(a) 2.6
316(c) 3.6(e)
317(a) 3.16
317(b) 3.8(h)
_______________
* This Cross-Reference Table does not constitute
part of the Declaration and shall not affect the
interpretation of any of its terms or provisions.
DECLARATION OF TRUST
THIS DECLARATION OF TRUST ("Declaration") dated as of March 19,
1996 between Equitable of Iowa Companies, an Iowa corporation, as
Sponsor, and Fred S. Hubbell, Paul E. Larson, John A. Merriman, The
First National Bank of Chicago, a national banking association, and
First Chicago Delaware, Inc., a Delaware corporation, not in their
individual capacities but solely as Trustees, and the holders, from time
to time, of undivided beneficial interests in the Trust to be issued
from time to time pursuant to this Declaration.
WHEREAS, the Sponsor desires to establish a statutory business
trust (the "Trust") under the Business Trust Act (as hereinafter
defined); and
WHEREAS, the sole purpose of the Trust shall be to issue and sell
certain securities representing undivided beneficial interests in the
assets of the Trust, to invest the proceeds from such sales in the
Debentures issued by the Debenture Issuer (as those terms are
hereinafter defined) and to engage in activities necessary, appropriate,
convenient or incidental thereto.
NOW, THEREFORE, it being the intention of the parties hereto that
the Trust constitute a business trust under the Business Trust Act,
the Trustees hereby declare that all assets contributed to the Trust be
held in trust for the benefit of the holders, from time to time, of the
securities representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this
Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and 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 are to
Articles and Sections of 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.
"CERTIFICATE" means a Common Security Certificate or a Preferred
Security Certificate.
"CERTIFICATE OF TRUST" has the meaning specified in Section 3.1.
"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 the date on which the Preferred Securities are
sold pursuant to the terms of the Underwriting Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to
any corresponding provision of any federal tax statute enacted after the
date of this Declaration, as such specific section or corresponding
provision is in effect on the date of application of the provisions of
this Declaration containing such reference.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SECURITIES GUARANTEE" means the guarantee agreement 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.
"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 any Affiliate thereof; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"CORPORATE TRUST OFFICE" means the office of the Property Trustee
at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the
date of execution of this Declaration is located at One First National
Plaza - Suite 0126, Chicago, Illinois 60670-0126, Attention: Corporate
Trust Services Division; telecopy no. (312) 407-7108.
"COVERED PERSON" means (a) any officer, director, shareholder,
partner, member, representative, employee or agent of (i) the Trust or
(ii) the Trust's Affiliates; and (b) any Holder of Securities.
"DEBENTURE ISSUER" means Equitable of Iowa Companies in its capacity
as issuer of the Debentures under the Indenture.
"DEBENTURE TRUSTEE" means The First National Bank of Chicago, as
trustee under the Indenture until a successor is appointed thereunder,
and thereafter means such successor trustee.
"DEBENTURES" means the series of junior subordinated deferrable
interest debentures to be issued by the Debenture Issuer under the
Indenture to be held by the Property Trustee.
"DEFINITIVE PREFERRED SECURITY CERTIFICATES" has the meaning set
forth in Section 9.4.
"DELAWARE TRUSTEE" has the meaning set forth in Section 5.2.
"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).
"FISCAL YEAR" has the meaning set forth in Section 11.1.
"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, PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite liquidation amount of Preferred
Securities have voted on any matter provided for in this Declaration,
then for the purpose of such determination only (and not for any other
purpose hereunder), if the Preferred Securities remain in the form of one
or more Global Certificates, the term "Holders" shall mean the holder of
the Global Certificate acting at the direction of the Preferred Security
Beneficial Owners.
"INDEMNIFIED PERSON" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"INDENTURE" means the Indenture dated as of January 17, 1995, among
the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"INVESTMENT COMPANY" means an investment company as defined in the
Investment Company Act and the regulations promulgated thereunder.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940,
as amended from time to time, or any successor legislation.
"LEGAL ACTION" has the meaning set forth in Section 3.6(g).
"LIST OF HOLDERS" has the meaning specified in Section 2.2(a).
"MAJORITY IN LIQUIDATION AMOUNT" 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.
"OFFICERS' CERTIFICATE" means, with respect to any Person (other than
Regular Trustees who are natural persons), 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 Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(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 ;
PROVIDED, that the term "Officers' Certificate" when used with reference to
Regular Trustees who are natural persons shall mean a certificate signed by
two of the Regular Trustees which otherwise satisfies the foregoing
requirements.
"PAYING AGENT" has the meaning specified in Section 3.8(h).
"PAYMENT AMOUNT" has the meaning specified in Section 6.1.
"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 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.
"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.
"PROPERTY TRUSTEE" means the Trustee meeting the eligibility
requirements set forth in Section 5.3
"PROPERTY TRUSTEE ACCOUNT" has the meaning set forth in Section 3.8(c).
"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 Property 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 Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"RESPONSIBLE OFFICER" means, with respect to the Property Trustee,
any officer within the Corporate Trust Office of the Property Trustee,
including any vice-president, any assistant vice-president, the secretary,
any assistant secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Property Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"RULE 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"RULE 3a-7" means Rule 3a-7 under the Investment Company Act or any
successor rule thereunder.
"SECURITIES" means the Common Securities and the Preferred Securities.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, or any successor legislation.
"SECURITIES GUARANTEES" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"SPONSOR" means Equitable of Iowa Companies, an Iowa corporation,
or any successor entity in a merger, consolidation or amalgamation, in
its capacity as sponsor of the Trust.
"SUCCESSOR DELAWARE TRUSTEE" has the meaning specified in Section 5.6(b).
"SUCCESSOR ENTITY" has the meaning specified in Section 3.15(b)(i).
"SUCCESSOR PROPERTY TRUSTEE" has the meaning specified in Section 5.6(b).
"SUCCESSOR SECURITY" has the meaning specified in Section 3.15(b)(i)(B).
"SUPER MAJORITY" has the meaning set forth in Section 2.6(a) (ii).
"10% IN LIQUIDATION AMOUNT" 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).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"TRUSTEE" or "TRUSTEES" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who
may from time to time be duly appointed, qualified and serving as
Trustees in accordance with the provisions hereof, and references herein
to a Trustee or the Trustees shall refer to such Person or Persons
solely in their capacity as trustees hereunder.
"TRUSTEES' AUTHORIZATION CERTIFICATE" means a written certificate
signed by two of the Regular Trustees for the purpose of establishing
the terms and form of the Preferred Securities and the Common Securities
as determined by the Regular Trustees.
"UNDERWRITING AGREEMENT" means the Underwriting Agreement for the
offering and sale of Preferred Securities between the Trust, the
Debenture Issuer and the underwriters designated by the Regular
Trustees.
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 Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect the nature of the 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 Property Trustee with a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of
the Holders of the Securities ("List of Holders"), (i) within one
Business Day after January 1 and June 30 of each year and current as of
such date, and (ii) at any other time, within 30 days of receipt by the
Trust of a written request from the Property Trustee for a List of
Holders as of a date no more than 14 days before such List of Holders is
given to the Property Trustee; 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 recent List of Holders given to the Property Trustee by
the Sponsor and the Regular Trustees on behalf of the Trust. The
Property Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it
or which it receives in the capacity as Paying Agent (if acting in such
capacity) PROVIDED THAT the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under,
and shall be entitled to the benefits of, Sections 311(a), 311(b) and
312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year(commencing with the year
of the first anniversary of the issuance of the Preferred Securities),
the Property Trustee shall provide to the Holders of the Preferred
Securities such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Property Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and
information as required by Section 314 (if any) of the Trust Indenture
Act 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 Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default 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 and the Preferred Securities,
but no such waiver shall extend to any subsequent or other default or Event
of Default with respect to the Preferred Securities or impair any right
consequent thereon.
(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 in respect of 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 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 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 the consequences thereof until all Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated, and until such Events of Default with respect to the
Preferred Securities have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders
of the Preferred Securities and only the Holders of the Preferred Securities
will have the right to direct the Property Trustee in accordance with the
terms of the Securities. The foregoing provisions of this Section 2.6(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 Property
Trustee at the direction of the Holders of the Preferred Securities
constitutes a waiver of the corresponding Event of Default with respect to
the Preferred Securities 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 Property 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 Property 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 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 Property Trustee shall be protected in withholding such notice if and so
long as a Responsible Officer of the Property Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Securities.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.1(a) and 5.1(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer of the Property
Trustee charged with the administration of this Declaration shall
have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name and Organization.
The Trust hereby created is named "Equitable of Iowa Companies Capital
Trust" 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. The Trustees are hereby authorized and
directed to execute and file a certificate of trust (the "Certificate of
Trust") with the Delaware Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Act. This Declaration, as
amended or supplemented from time to time, and the Trustees' Authorization
Certificate, when issued, shall constitute the governing instrument of the
Trust.
SECTION 3.2 Office.
The address of the principal office of the Trust is c/o Equitable of
Iowa Companies, 604 Locust Street, Des Moines, Iowa 50309. 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 gross proceeds from such sale to acquire the
Debentures, and (b) except as otherwise limited herein, to engage in only
those other activities necessary, appropriate, convenient or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets or otherwise undertake
(or permit to be undertaken) any activity that would cause the Trust not
to be classified for United States federal income tax purposes as a grantor
trust.
The Trust will be classified as a grantor trust for United States
federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal
income tax purposes, and such owners will include directly in their
gross income the income, gain, deduction or loss of the Trust as if the
Trust did not exist. By the acceptance of this Trust, none of the
Trustees, the Sponsor, the Holders of the Preferred Securities or Common
Securities or the Preferred Securities Beneficial Owners will take any
position for United States federal income tax purposes which is contrary
to the classification of the Trust as a grantor trust.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to the
specific duties of the Property 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 Property 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 Property Trustee Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in
the Trust. The Holders shall not have legal title to any part of the
assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
SECTION 3.6 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 establish the terms and form of the Preferred Securities and
the Common Securities in the manner specified in Section 7.1 and
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 one-time, simultaneous issuance of both Preferred Securities and
Common Securities on the 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 a registration statement
on Form S-3 prepared by the Sponsor, including any amendments
thereto, pertaining to the Preferred Securities (and any other
securities of the Sponsor which the Sponsor may desire to
include in such registration statement);
(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
System 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 Property Trustee for the
benefit of the Holders of the Preferred Securities and the Holders
of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written notice
of the occurrence of certain events (as may be specified in the
terms of the Securities) arising from a change in law or a change
in legal interpretation or other circumstances specified in the
terms of the Securities PROVIDED THAT the Regular Trustees shall
consult with the Sponsor and the Property Trustee before taking or
refraining from taking any action in relation to any such 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;
(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
Property Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors,
advisors and consultants and pay reasonable compensation for such
services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be
executed by any Regular Trustee;
(k) to incur expenses that are necessary or desirable 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 (i)
to defer payments of interest on the Debentures by extending the
interest payment period under the Debentures as authorized by the
Indenture, or (ii) to extend the maturity date of the Debentures
if so authorized by the Indenture, provided that any such extension
of the maturity date will not adversely affect the federal income
tax status of the Trust;
(n) 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;
(o) 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
purposes and functions of the Trust as set out in Section 3.3 or
the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture
Issuer for United States federal income tax purposes,
PROVIDED THAT such action does not adversely affect the interests
of Holders;
(p) 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; and
(q) 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 desirable to the foregoing.
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 Property 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 Property
Trustee) shall cause the Trust not to, engage in any activity other than
as required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause
the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever
(except to the extent expressly authorized in this Declaration or
by the terms of the Securities);
(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 Declaration or by the terms of the
Securities, (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 Property Trustee.
(a) The legal title to the Debentures shall be owned by and held
of record in the name of the Property Trustee in trust for the benefit
of the Trust and the Holders of the Securities. The right, title and
interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as Property
Trustee in accordance with Section 5.6. 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 Property Trustee shall not transfer its right, title and
interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing trust
account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the
Holders of the Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the Property
Trustee, deposit such funds into the Property Trustee Account and
make payments to the Holders of the Preferred Securities and
Holders of the Common Securities from the Property Trustee Account
in accordance with Section 6.1. Funds in the Property Trustee
Account shall be held uninvested until disbursed in accordance
with this Declaration. The Property 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 Property Trustee shall take all actions and perform such
duties as may be specifically required of the Property Trustee pursuant
to the terms of the Securities.
(e) The Property Trustee shall take any Legal Action which arises
out of or in connection with an Event of Default of which a Responsible
Officer of the Property Trustee has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust
Indenture Act.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders of Securities pursuant to
the terms of the Securities; or
(ii) a Successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.6.
(g) The Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of Debentures under the
Indenture and, if an Event of Default actually known to a Responsible Officer
of the Property Trustee occurs and is continuing, the Property Trustee shall,
for the benefit of Holders of the Securities, enforce its rights as holder of
the Debentures subject to the rights of the Holders pursuant to the terms of
such Securities.
(h) The Property Trustee 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 Property Trustee at any time and a
successor Paying Agent or additional Paying Agents may be appointed at any
time by the Property Trustee. In the event the Preferred Securities do not
remain in the form of one or more Global Certificates, the Property Trustee
will act as Paying Agent and may designate an additional or substitute Paying
Agent at any time.
(i) Subject to this Section 3.8, the Property Trustee shall have none
of the duties, liabilities, powers or the authority of the Regular Trustees
set forth in Section 3.6.
The Property 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 Property 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 Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into
this Declaration against the Property Trustee. In case an Event of Default
has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer of the Property Trustee has actual knowledge,
the Property Trustee shall exercise such of the rights and powers vested in
it by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances
in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve
the Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this
Declaration and the Property Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Declaration, and no
implied covenants or obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Property Trustee and conforming
to the requirements of this Declaration; but in the case of
any such certificates or opinions that by any provision hereof
are specifically required to be furnished to the Property
Trustee, the Property Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities relating to the
time, method and place of conducting any proceeding for any remedy
available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Property
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, 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 Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the
Property Trustee Account shall be to deal with such property in a
similar manner as the Property Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Property Trustee under this Declaration
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the
Sponsor. Money held by the Property Trustee need not be segregated
from other funds held by it except in relation to the Property
Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by
law; and
(viii) the Property Trustee shall not be responsible for monitoring the
compliance by the Regular Trustees or the Sponsor with their
respective duties under this Declaration, nor shall the Property
Trustee be liable for any default or misconduct of the Regular
Trustees or the Sponsor.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property 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 (or, with respect to the establishment
of the terms and form of the Securities by the Regular Trustees,
by a Trustees' Authorization Certificate);
(iii) whenever in the administration of this Declaration, the Property
Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action
hereunder, the Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its
part, request and 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 Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing
or continuation statement or any filing under tax or securities
laws) or any rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other experts
and the advice or opinion of such counsel and experts with respect
to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by
it hereunder in good faith and in accordance with such advice or
opinion, such counsel may be counsel to the Sponsor or any of its
Affiliates, and may include any of its employees. The Property
Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court
of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Declaration at the
request or direction of any Holder, unless such Holder shall have
provided to the Property Trustee security and indemnity,
reasonably satisfactory to the Property Trustee, against the
costs, expenses (including attorneys' fees and expenses and the
expenses of the Property 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 Property Trustee; provided that, nothing
contained in this Section 3.10(a)(vi) shall be taken to relieve
the Property Trustee, upon the occurrence of an Event of Default,
of its obligation to exercise the rights and powers vested in it
by this Declaration;
(vii) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Property
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents, custodians, nominees or attorneys and the
Property Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with
due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders of the Securities, and the
signature of the Property Trustee or its agents alone shall be
sufficient and effective to perform any such action and no third
party shall be required to inquire as to the authority of the
Property Trustee to so act or as to its compliance with any of
the terms and provisions of this Declaration, both of which shall
be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Declaration the Property
Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other
action hereunder, the Property Trustee (i) may request
instructions from the Holders of the Securities which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be
entitled to direct the Property Trustee under the terms of the
Securities in respect of such remedy, right or action, (ii) may
refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in or accordance
with such instructions; and
(xi) except as otherwise expressly provided by this Declaration, the
Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this
Declaration.
(b) No provision of this Declaration shall be deemed to impose any
duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it,
in any jurisdiction in which it shall be illegal, or in which the Property
Trustee shall be unqualified or incompetent in accordance with applicable
law, to perform any such act or acts, or to exercise any such right, power,
duty or obligation. No permissive power or authority available to the
Property Trustee shall be construed to be a duty.
SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other than
Section 5.2, 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 Property 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 the Regular
Trustees or, if there are only two, both Regular Trustees 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, the Securities or the
Debentures or the Indenture.
SECTION 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence for twenty-five (25) 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 Property Trustee,
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
Property Trustee as the holder of the Debentures;
(iii) the Preferred Securities or any Successor Securities are listed,
or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with any other
organization on which the Preferred Securities are then listed or
quoted;
(iv) such merger, consolidation, amalgamation or replacement does not
cause the Preferred Securities (including any Successor Securities)
to be downgraded by any nationally recognized statistical rating
organization then rating the Preferred Securities at the request
of the Sponsor;
(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 qualified 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 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);
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor Entity will
be required to register as an Investment Company; and
(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.
SECTION 3.16 Property Trustee May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar
judicial proceeding relative to the Trust or any other obligor upon the
Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any
Distributions on the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the
Property Trustee shall have made any demand on the Trust for the payment
of any past due Distributions) shall be entitled and empowered, to the
fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Securities (or, if the Securities
are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such
Securities) and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Property
Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) 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 Property Trustee and, in the
event the Property Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Property Trustee any amount due it for
the reasonable compensation, expenses, disbursements and advances of the
Property Trustee, its agents and counsel, and any other amounts due the
Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement adjustment or compensation
affecting the Securities or the rights of any Holder thereof or to authorize
the Property Trustee to vote in respect of the claim of any Holder in any
such proceeding.
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 pertaining to the Preferred
Securities, including any amendments thereto (which registration
statement may also include other securities of the Sponsor);
(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, Inc. or any other national stock exchange or the
Nasdaq Stock Market's National Market System 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 five (5), and:
(a) at any time before the issuance of any Securities, the Sponsor may,
by written instrument, increase or decrease the number of Trustees;
and
(b) after the issuance of any Securities, 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 or by written
consent in lieu of such meeting.
PROVIDED THAT, if the Property Trustee does not also act as Delaware
Trustee, the number of Trustees shall be at least three (3).
SECTION 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware
Trustee") shall be:
(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 Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the requirements
of applicable law, then the Property Trustee shall also be the Delaware
Trustee and Section 3.11 shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(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 other 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" (as defined in Rule 3a-7) of the Trust, the
Property Trustee shall possess those qualifications.
(b) If at any time the Property Trustee shall cease to be eligible to
so act under Section 5.3(a), the Property Trustee shall immediately
resign in the manner and with the effect set forth in Section
5.6(c).
(c) If the Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common
Securities (as if it were the Obliger referred to in Section 310(b)
of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Preferred Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause
(i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
SECTION 5.4 Qualifications of Regular Trustees and Delaware Trustee
Generally.
Each Regular Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Initial Trustees.
The initial Regular Trustees shall be:
Fred S. Hubbell
Paul E. Larson
John A. Merriman
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
The initial Property Trustee shall be:
The First National Bank of Chicago
One First National Plaza, Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Services Division
The initial Delaware Trustee shall be:
First Chicago Delaware, Inc.
c/o FCC National Bank
300 King Street
Wilmington, Delaware 19801
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.
(b) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.6(a) until a successor Trustee possessing the
qualifications to act as Property Trustee under Section 5.3 (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered
to the Regular Trustees and the Sponsor. The Trustee that acts as Delaware
Trustee shall not be removed in accordance with 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 or its
successor shall have been appointed, until his death or its dissolution or
until his or its 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 Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such
Successor Property Trustee and delivered to the Trust, the
Sponsor and the resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the holders of the
Securities; 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
Property Trustee, as the case may be, if the Property Trustee or the
Delaware Trustee delivers an instrument of resignation in accordance
with this Section 5.6.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as
the case may be, 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 Property Trustee or Delaware Trustee, as applicable, may
petition any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee, as
applicable. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or
Successor Delaware Trustee, as the case may be.
SECTION 5.7 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 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 natural person over the age of 21 his,
her or its 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.
(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 Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Property Trustee or the
Delaware Trustee, as the case may be, shall be a party, or any
corporation succeeding to all or substantially all the corporate trust
business of the Property Trustee or the Delaware Trustee, as the case
may be, shall be the successor of the Property Trustee or the Delaware
Trustee, as the case may be, hereunder, provided such 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.
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 Property Trustee (the amount of any such payment being
a "Payment Amount"), the Property Trustee shall and is directed, to the
extent funds are available for that purpose, to make a distribution (a
"Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 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 and in such form as shall be
established by the Regular Trustees (the "Preferred Securities") and one
class of common securities representing undivided beneficial interests in the
assets of the Trust having such terms and in such form as shall be
established by the Regular Trustees (the "Common Securities"). The terms
and form of the Preferred Securities and the Common Securities as established
by the Regular Trustees shall be set forth in a Trustees' Authorization
Certificate prepared prior to issuance of the 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 or facsimile signature
of any present or any future Regular Trustee. In case any Regular Trustee of
the Trust who shall have signed any of the Certificates 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 Certificate, shall be
the Regular Trustees of the Trust, although at the date of the execution and
delivery of the Declaration 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 and the terms of the Securities, the
Securities Guarantees, the Indenture and the Debentures.
ARTICLE VIII
TERMINATION OF TRUST
SECTION 8.1 Termination of Trust.
(a) The Trust shall terminate upon the earlier of:
(i) the bankruptcy of the Holder of the Common Securities or the
Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Holder of the Common Securities or the
Sponsor; the filing of a certificate of 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;
(v) the occurrence and continuation of certain events (as may be
specified in the terms of the Securities) arising from a change
in law or a change in legal interpretation or other circumstances
specified in the terms of the Securities pursuant to which the
Trust shall have been dissolved in accordance with the terms of
the Securities and all of the Debentures shall have been
distributed to the Holders of Securities in exchange for all of
the Securities;
(vi) before the issuance of any Securities, when all of the Regular
Trustees and the Sponsor shall have consented to termination of
the Trust; or
(vii) the expiration of the term of the Trust as set forth in Section
3.14.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up of
the Trust and its termination, 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 qualified
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 and Exchange of Certificates.
The Regular Trustees shall provide for the registration of Certificates
and of transfers or exchanges of Certificates, which will be 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. Upon
surrender for exchange of any Certificate, the Regular Trustees shall cause
one or more new Certificates in the same aggregate liquidation amount as the
Certificate surrendered for exchange to be issued in the name of the Holder
of the Certificate so surrendered. Every Certificate surrendered for
registration of transfer or for exchange 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 or for exchange
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;
(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. DTC will make book entry transfers among the Clearing
Agency Participants and receive and transmit payments of Distributions
on the Global Certificates to such 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
(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:
(i) Definitive Preferred Security Certificates shall be prepared
by the Regular Trustees on behalf of the Trust with respect to
such Preferred Securities; and
(ii) upon surrender of the Global Certificates by the Clearing
Agency, accompanied by registration instructions, the Regular
Trustees shall cause Definitive Preferred Security Certificates
to be delivered to the 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, the Sponsor
and the Trust 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 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.
(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 Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such other duties
and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between 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.
(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 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) 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.
(iv) 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, (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.
(v) 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.
(vi) 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).
(vii) 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 the resulting or
surviving entity as he would have with respect to such constituent entity if
its separate existence had continued.
(viii) 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. The obligation to indemnify
as set forth in this Section 10.4(a) shall survive the satisfaction and
discharge of this Declaration.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) any Affiliate of the Property
Trustee and the Delaware Trustee, and (iv) any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Property 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 of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 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 Property
Trustee may engage in or possess an interest in other business ventures of
any nature or description, independently or with others, similar or
dissimilar to the business of the Trust, and the Trust and the Holders of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the
pursuit of any such venture, even if competitive with the business of the
Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Delaware Trustee or the Property Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if
such opportunity is of a character that, if presented to the Trust, could be
taken by the Trust, and any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee shall have the right to take for its own account
(individually or as a partner or fiduciary) or to recommend to others any
such particular investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the
Sponsor, or may act as depositary for, trustee or agent for, or act on any
committee or body of holders of, securities or other obligations of the
Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
SECTION 11.1 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. 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.
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 Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust
shall be deposited in the Property Trustee Account. The sole signatories for
such accounts shall be designated by the Regular Trustees; PROVIDED, HOWEVER,
that the Property Trustee shall designate the signatories for the Property
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 over withholding,
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 the Regular Trustees
(or, if there are more than two Regular Trustees, a majority of the
Regular Trustees) and:
(i) by the Property Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of the Property Trustee; and
(ii) by the Delaware Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of 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 Property
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 Property
Trustee, the Property 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
Property 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 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;
(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 rights, preferences or
privileges of the Holders; and
(v) to modify, eliminate and add to any provision of this Declaration,
provided such modification, elimination or addition would not adversely
affect the rights, privileges or preferences of any Holder of the Securities.
(h) The issuance of a Trustees' Authorization Certificate by the
Regular Trustees for purposes of establishing the terms and form of the
Securities as contemplated by Section 7.1 shall not be deemed an amendment
of this Declaration subject to the provisions of this Section 12.1.
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 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 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 Holders 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 such proxy. Except as otherwise provided herein,
all matters relating to the giving, voting or validity of proxies shall
be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders of the Securities were
stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Securities shall be conducted
by the 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 for 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 PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
SECTION 13.1 Representations and Warranties of the Property Trustee.
The Trustee that acts as initial Property Trustee represents and
warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust
and the Sponsor at the time of the Successor Property Trustee's acceptance
of its appointment as Property Trustee that:
(a) the Property Trustee is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, with trust power and authority to execute
and deliver, and to carry out and perform its obligations under the
terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth in
Section 5.3(a);
(c) the execution, delivery and performance by the Property Trustee of
this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration has been
duly executed and delivered by the Property Trustee, and it constitutes
a legal, valid and binding obligation of the Property Trustee,
enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other
similar laws affecting creditors' rights generally and to general
principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding
in equity or at law);
(d) the execution, delivery and performance of this Declaration by the
Property Trustee does not conflict with or constitute a breach of the
articles of association or incorporation, as the case may be, or the
by-laws (or other similar organizational documents) of the Property
Trustee; and
(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 Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of the 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 satisfies the requirements set forth in
Section 5.2 and has the power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this
Declaration and, if it is not a natural person, is duly organized,
validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization;
(b) the Delaware Trustee has been authorized to perform its obligations
under the Certificate of Trust and this Declaration. This 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); and
(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 this
Declaration.
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 Property Trustee, the Delaware Trustee
and the Holders of the Securities):
Equitable of Iowa Companies Capital Trust
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Telecopy No. (515) 245-6973
(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 Regular Trustees, the Property Trustee and the Holders of the
Securities):
First Chicago Delaware, Inc.
c/o FCC National Bank
300 King Street
Wilmington, Delaware 19801
Telecopy No. (312) 407-4656
(c) if given to the Property Trustee, at its Corporate Trust Office
(or such other address as the Property Trustee may give notice of to
the Regular Trustees, the Delaware Trustee and 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 Property
Trustee, the Delaware Trustee and the Trust):
Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Telecopy No. (515) 245-6973
(e) if given to any other Holder, at the address set forth on the books
and records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 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 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.
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
EQUITABLE OF IOWA COMPANIES, as Sponsor
and Debenture Issuer
By: /s/ John A. Merriman
Name: John A. Merriman
Title: General Counsel and Secretary
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ R. D. Manella
Name: R.D. Manella
Title: Vice President
FIRST CHICAGO DELAWARE, INC.,
as Delaware Trustee
By: /s/ L. Dillard
Name: L. Dillard
Title: Vice President
/s/ Fred S. Hubbell
Fred S. Hubbell, as Regular Trustee
/s/ Paul E. Larson
Paul E. Larson, as Regular Trustee
/s/ John A. Merriman
John A. Merriman, as Regular Trustee
(Signature Page of Declaration of Trust)
EXHIBIT 4.10
=====================================================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST
Dated as of ___________, 1996
=====================================================================
TABLE OF CONTENTS
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
SECTION 2.2 Lists of Holders of Securities
SECTION 2.3 Reports by Preferred Guarantee Trustee
SECTION 2.4 Periodic Reports to Preferred Guarantee Trustee
SECTION 2.5 Evidence of Compliance with Conditions Precedent
SECTION 2.6 Event of Default; Waiver
SECTION 2.7 Event of Default; Notice
SECTION 2.8 Conflicting Interests
SECTION 2.9 Disclosure of Information
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Preferred Guarantee Trustee
SECTION 3.2 Certain Rights of Preferred Guarantee Trustee
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Preferred Guarantee Trustee; Eligibility
SECTION 4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustee
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
SECTION 5.2 Waiver of Notice and Demand
SECTION 5.3 Obligations Not Affected
SECTION 5.4 Rights of Holders
SECTION 5.5 Guarantee of Payment
SECTION 5.6 Subrogation
SECTION 5.7 Independent Obligations
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
SECTION 6.2 Ranking
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
SECTION 8.2 Indemnification
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
SECTION 9.2 Amendments
SECTION 9.3 Notices
SECTION 9.4 Benefit
SECTION 9.5 Governing Law
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"),
dated as of _______, 1996, is executed and delivered by Equitable of
Iowa Companies, an Iowa corporation (the "Guarantor"), and The First
National Bank of Chicago, 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 Equitable of
Iowa Companies Capital Trust, a Delaware statutory business trust (the
"Issuer").
WHEREAS, pursuant to the Declaration (as defined herein), 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; and
WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (as amended, modified or supplemented from time to time, 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 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.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions.
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 New York, New York are authorized or required by 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 execution of this Preferred Securities Guarantee is
located at One First National Plaza - Suite 0126, Chicago, Illinois
60670-0126, Attention: Corporate Trust Services Division; telecopy
no. (312) 407-7108.
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DEBENTURES" means the series of junior subordinated deferrable
interest debentures to be issued by the Guarantor designated the ___%
Junior Subordinated Deferrable Interest Debentures due [ ] held by
the Property Trustee (as defined in the Declaration) of the Issuer.
"DECLARATION" means the Declaration of Trust, dated as of March ___,
1996, as amended, modified or supplemented from time to time, 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.
"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 or the redemption of all the
Preferred Securities upon maturity or redemption of the Debentures 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 as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive
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.
"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; and provided further,
that in determining whether the Holders of the requisite liquidation amount of
Preferred Securities have voted on any matter provided for in this Preferred
Securities Guarantee, then for the purpose of such determination only (and not
for any other purpose hereunder), if the Preferred Securities remain in the
form of one or more Global Certificates, the term "Holders" shall mean the
holder of the Global Certificate acting at the direction of the Preferred
Security Beneficial Owners.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Preferred Guarantee Trustee.
"INDENTURE" means the Indenture dated as of January 17, 1995, among
the Guarantor (the "Debenture Issuer") and The First National Bank of
Chicago, 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 (as defined in the Declaration) of
the Issuer.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means,
except as provided in the terms of the Preferred Securities or by the
Trust Indenture Act, Holder(s) of outstanding Preferred Securities,
voting separately as a class, who are the record holders 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 Preferred Securities.
"OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two Authorized Officers (as defined in the
Declaration) of such Person. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Preferred Securities Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer 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 First National Bank of Chicago,
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee
Trustee.
"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,
the secretary, 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 from time to time, or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of
this Preferred Securities Guarantee and shall, to the extent applicable,
be governed by such provisions.
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Sections 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"), (i) within one Business Day
after January 1 and June 30 of each year and current as of such date,
and (ii) at any other time, within 30 days of receipt by the Guarantor
of a written request from the Preferred Guarantee Trustee 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 by the Guarantor. The Preferred
Guarantee Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it,
provided that it 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 Preferred Guarantee Trustee.
Within 60 days after May 15 of each year (commencing with the year
of the first anniversary of the issuance of the Preferred Securities),
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)
of the Trust Indenture Act 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 Event of Default; Waiver.
The Holders of a Majority in Liquidation Amount of the Preferred
Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default and its
consequences. Upon such waiver, any such Event of Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities
Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of 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 thereof, or a Responsible Officer of
the Preferred Guarantee Trustee charged with the administration of the
Declaration shall have obtained actual knowledge thereof.
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.
SECTION 2.9 Disclosure of Information.
The disclosure of information as to the names and addresses of the
Holders of the Preferred Securities in accordance with Section 312 of
the Trust Indenture Act, regardless of the source from which such
information was derived, shall not be deemed to be a violation of any
existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the
Preferred Guarantee Trustee be held accountable by reason of mailing any
material pursuant to a request made under Section 312(b) of the Trust
Indenture Act.
SECTION 2.10 Preferred Guarantee Trustee May File Proofs of Claim.
Upon the occurrence of an Event of Default, the Preferred Guarantee
Trustee is hereby authorized to (a) recover judgment, in its own name
and as trustee of an express trust, against the Guarantor for the whole
amount of any Guarantee Payments remaining unpaid and (b) file such
proofs of claim and other papers or documents as may be necessary or
advisable in order to have its claims and those of the Holders of the
Preferred Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of 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 in and to this
Preferred Securities Guarantee 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 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 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 an
Officers' Certificate.
(iii) Whenever, in the administration of this Preferred Securities
Guarantee, the Preferred Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or omitting
any action hereunder, the Preferred Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Preferred Guarantee Trustee shall have no duty to see to any
recording, filing or registration of any instrument (or any rerecording,
refiling or 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.
(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 Preferred Securities 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.
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall be 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 a 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
Trustee.
(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.
(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 owing for fees and reimbursement of expenses which
have 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 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.
Notwithstanding anything to the contrary herein, the Guarantor retains
all of its rights under the Indenture to (i) extend the interest payment
period on the Debentures and the Guarantor shall not be obligated
hereunder to make any Guarantee Payments during any Extended Interest
Payment Period (as defined in the Indenture) with respect to the
Distributions (as defined in the Declaration) on the Preferred
Securities, and (ii) extend the maturity date of the Debentures to the
extent permitted by the Indenture, provided that any such extension of the
maturity date will not adversely affect the federal income tax status of the
Issuer.
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 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 Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Property Trustee or
the Holders pursuant to the terms of the Preferred Securities, or any
action on the part of the Issuer granting indulgence or extension of any
kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or
readjustment of debt of, or other similar proceedings affecting, the
Issuer or any of the assets of the Issuer;
(e) Any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) The settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the
intent of this Section 5.3 that the obligations of the Guarantor
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Preferred Guarantee Trustee or the
Holders to give notice to, or obtain consent of, the Guarantor or any other
Person 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) If the Preferred Guarantee Trustee fails to enforce this Preferred
Securities Guarantee, then 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. Notwithstanding the foregoing, if the Guarantor has failed to make a
Guarantee Payment, a Holder may directly institute a proceeding against the
Guarantor for enforcement of this Preferred Securities Guarantee for such
payment.
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 Preferred Guarantee Trustee for the benefit of the
Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the
Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to
the terms of this 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 and (c) the Guarantor shall not make any guarantee payments
with respect to the foregoing (other than pursuant to this Preferred
Securities Guarantee); provided, however, the Guarantor may declare and
pay a stock dividend where the dividend stock is the same stock as that
on which the dividend is being paid.
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, including
the Debentures, except those liabilities of the Guarantor made pari
passu or subordinate by their terms, (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.
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 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 the Holders (in which case no consent of the Holders will be
required), this Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of at least a Majority in Liquidation
Amount of the Preferred Securities. The provisions of Section 12.2 of
the Declaration with respect to meetings of, and action by written
consent of, the 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
Guarantor and the Holders of the Preferred Securities):
The First National Bank of Chicago
One First National Plaza - Suite 0126
Chicago, Illinois 60670-0126
Attn: Corporate Trust Services Division
Telecopy No. (312) 407-7108
(b) If given to the Guarantor, at the Guarantor's mailing addresses
forth below (or such other address as the Guarantor may give notice
of to the Preferred Guarantee Trustee and the Holders of the Preferred
Securities):
Equitable of Iowa Companies
604 Locust Street
Des Moines, Iowa 50309
Attn: John A. Merriman
Telecopy No. (515) 245-6973
(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 IOWA.
IN WITNESS WHEREOF, this Preferred Securities Guarantee is executed
as of the day and year first above written.
EQUITABLE OF IOWA COMPANIES,
as Guarantor
By: __________________________
Name:_________________________
Title:________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Preferred Guarantee Trustee
By: __________________________
Name:_________________________
Title:________________________
Exhibit 5.1
NYEMASTER, GOODE, MCLAUGHLIN, VOIGTS
WEST, HANSELL & O'BRIEN
A Professional Corporation
Attorneys and Counselors at Law
515-283-3121
17th Floor Fax No.
515-283-8022
March 22, 1996
EXHIBIT 5.1 TO
REGISTRATION STATEMENT
Equitable of Iowa Companies
P.O. Box 1635
Des Moines, Iowa 50306-1635
RE: Registration of $300,000,000 in Securities
of Equitable of Iowa Companies
Ladies and Gentlemen:
We have acted as counsel to Equitable of Iowa Companies, an Iowa
corporation ("EIC"), in connection with the registration statement on Form
S-3 (the "Registration Statement") being filed by EIC with the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Securities Act") relating to the registration of $300,000,000
of the following securities of EIC: unsecured debt securities (the "Debt
Securities"), shares of serial preferred stock, without par value (the
"Preferred Stock"), shares of common stock, without par value (the "Common
Stock") and warrants to purchase Debt Securities, Preferred Stock or Common
Stock or any combination thereof, as shall be designated by the Company at
the time of the offering (the "Warrants") in amounts, at prices and on terms
to be determined at the time of the offering. The Registration Statement
also relates to the guarantee by EIC of preferred securities of Equitable of
Iowa Companies Capital Trust pursuant to a guarantee agreement to be entered
into by EIC (the "Preferred Securities Guarantee Agreement"). The Debt
Securities will be issued under an Indenture (the "Indenture") between EIC
and The First National Bank of Chicago as Trustee in the form incorporated as
an exhibit to the Registration Statement.
In rendering this opinion, we have examined and relied upon a copy of
the Registration Statement. We have also examined originals, or copies of
originals certified to our satisfaction, of such agreements, documents,
certificates and statements of government officials and other instruments,
and have examined such questions of law and have satisfied ourselves as to
such matters of fact, as we have considered relevant and necessary as a basis
for this opinion. We have assumed the authenticity of all documents
submitted to us as originals, the genuineness of all signatures, the legal
capacity of all natural persons and the conformity with the original
documents of any copies thereof submitted to us for examination.
Based on the foregoing, and subject to the qualifications and
limitations hereinafter set forth, it is our opinion that:
1. When (i) the Registration Statement, as finally amended (including any
necessary post-effective amendments), shall have become effective under
the Securities Act and the Indenture, including any necessary
supplemental indenture, filed as an exhibit to the Registration
Statement shall have been duly executed and delivered by EIC and the
Trustee and qualified under the Trust Indenture Act of 1939, as amended;
(ii) a prospectus supplement with respect to such series of Debt
Securities shall have been filed with the Commission in compliance with
the Securities Act and the rules and regulations thereunder; (iii) a
Board Resolution or Officers' Certificate within the meaning of the
Indenture shall have been duly issued, or supplemental indenture entered
into, in accordance with the Indenture detailing the establishment of
such series of Debt Securities; and (iv) such series of Debt Securities
shall have been duly executed and authenticated and shall have been duly
delivered to the purchasers thereof against payment of the agreed
consideration therefor, each series of Debt Securities will be legally
issued and binding obligations of EIC (except as may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting the enforcement of creditors'
rights generally and by the effect of general principles of equity,
regardless of whether considered in a proceeding in equity or at law).
2. When the Common Stock has been duly issued and the consideration
therefor has been received by EIC, the Common Stock will be legally
issued, fully paid and nonassessable.
3. When (i) the Board of Directors of EIC has duly adopted resolutions
specifying the terms and conditions of the applicable series of
Preferred Stock; (ii) EIC has filed with the Iowa Secretary of State
articles of amendment with respect to such series of Preferred Stock;
and (iii) such series of Preferred Stock has been duly issued and the
consideration therefor has been received by EIC, each series of
Preferred Stock will be legally issued, fully paid and nonassessable.
4. When (i) the Warrant Agreement relating to the Warrants (the "Warrant
Agreement") has been duly executed and delivered; (ii) the terms of the
Warrants and of their issuance and sale have been duly established in
conformity with the Warrant Agreement relating to such Warrants so as
not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon EIC and so as to comply with
any requirement or restriction imposed by any court or governmental
or regulatory body having jurisdiction over EIC; and (iii) the Warrants
have been duly executed and countersigned in accordance with the Warrant
Agreement relating to such Warrants, and issued and sold in the form and
manner contemplated in the Registration Statement and any prospectus
supplement relating thereto, such Warrants will be legally issued and
binding obligations of EIC (except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer
or other similar laws affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity, regardless
of whether considered in a proceeding in equity or at law).
5. When the Preferred Securities Guarantee has been duly executed and
delivered by EIC and the preferred guarantee trustee, the Preferred
Securities Guarantee will constitute the legal and binding obligation
of EIC (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws
affecting the enforcement of creditors' rights generally and by the
effect of general principles of equity, regardless of whether considered
in a proceeding in equity or at law).
We do not find it necessary for the purposes of this opinion to cover,
and accordingly we express no opinion as to, the application of the securities
or blue sky laws of the various states to the sale of the securities to be
registered pursuant to the Registration Statement. Without limiting the
generality of the foregoing, we express no opinion in connection with the
matters contemplated by the Registration Statement, and no opinion may be
implied or inferred, except as expressly set forth herein.
This opinion is limited to the laws of the State of Iowa and of the
United States of America to the extent applicable.
We hereby consent to the inclusion of this opinion as Exhibit 5.1 to the
Registration Statement and to all references to this law firm in the
Registration Statement or the Prospectus included therein.
Respectfully submitted,
Nyemaster, Goode, McLaughlin,
Voigts, West, Hansell &
O'Brien, P.C.
By /s/ G. R. Neumann
G. R. Neumann
GRN:pjt
EXHIBIT 5.2
RICHARDS, LAYTON & FINGER
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
Telephone (301) 658-6541
Telecopier (302) 658-6548
Writer's Direct Dial Number
(302) 651-7726
March 22, 1996
Equitable of Iowa Companies Capital Trust
c/o Equitable of Iowa Companies
604 Locust Street
Des Moines, IA 50309
Re: Equitable of Iowa Companies Capital Trust
Ladies and Gentlemen:
We have acted as special Delaware counsel for Equitable of Iowa
Companies, an Iowa corporation (the "Company"), and Equitable of Iowa
Companies Capital Trust, a Delaware business trust ("Equitable Trust"), in
connection with the matters set forth herein. This opinion is being
furnished at the request of the Company and Equitable Trust.
For purposes of giving the opinion hereinafter set forth, our
examination of documents has been limited to the examination of originals
or copies of the following:
(a) The Certificate of Trust of Equitable Trust, dated as of
March 19, 1996 (the "Certificate"), as filed in the office
of the Secretary of State of the State of Delaware (the
"Secretary of State") on March 19, 1996;
(b) The Declaration of Trust of Equitable Trust, dated as of
March 19, 1996, between the Company and the trustees of
Equitable Trust named therein (the "Declaration");
(c) The Registration Statement on Form S-3 (the "Registration
Statement"), including a preliminary prospectus (the
"Prospectus"), relating to the Preferred Securities of
Equitable Trust representing preferred undivided beneficial
interests in the assets of Equitable Trust, filed by the
Company and Equitable Trust with the Securities and
Exchange Commission on March 22, 1996; and
(d) A Certificate of Good Standing for Equitable Trust dated
March 22, 1996 obtained from the Secretary of State.
The documents listed in paragraphs (a) through (d) above will be
referred to herein collectively as the "Trust Documents". Capitalized terms
used herein and not otherwise defined herein are used as defined in the
Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the Trust Documents and, in particular, we have not reviewed any
documents (other than the Trust Documents) that is referred to in or
incorporated by reference into the Trust Documents reviewed by us. We have
assumed that there exists no provision in any document that we have not
reviewed that is inconsistent with our opinions stated herein. We have
conducted no independent factual investigation of our own, but rather have
relied solely upon the Trust Documents, the statements and information set
forth therein and the additional matters recited or assumed herein, all of
which have been assumed to be true, complete and accurate in all material
respects. We have not participated in the preparation of the Registration
Statement and assume no responsibility for its contents.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii)
the conformity with the originals of all documents submitted to us as copies
or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Declaration
constitutes the entire agreement among the parties thereto with respect to
the subject matter thereof, including with respect to the creation, operation
and termination of Equitable Trust (except that a Trustees' Authorization
Certificate ("Authorization Certificate") will be issued for purposes of
establishing the terms and form of the Preferred Securities as contemplated
by the Declaration), and that the Declaration and the Certificate are in full
force and effect and have not been amended, (ii) except to the extent provided
in paragraph 1 below, the due organization or due formation, as the case may
be, and valid existence in good standing of each party to the Trust Documents
under the laws of the jurisdiction governing its organization or formation,
(iii) the legal capacity of natural persons who are parties to the Trust
Documents, (iv) that each of the parties to the Trust Documents has the power
and authority to execute and deliver, and to perform its obligations under
the Trust Documents, (v) the due authorization, execution and delivery by all
parties thereto of the Trust Documents, (vi) the establishment of the terms
and form of the Preferred Securities by the Regular Trustees in accordance
with the Declaration and the Authorization Certificate, (vii) the receipt by
each person to whom a Preferred Security is to be issued by Equitable Trust
(collectively, the "Preferred Security Holders") of a Preferred Security, in
accordance with the Declaration, the Authorization Certificate and the
Registration Statement, and (viii) that the Preferred Securities are issued
and sold to the Preferred Security Holders in accordance with the Declaration,
the Authorization Certificate and the Registration Statement.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal
laws and rules and regulations relating thereto. Our opinions are rendered
only with respect to Delaware laws and rules, regulations and orders
thereunder which are currently in effect.
Based on the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware, as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. Equitable Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Business Trust Act.
2. The Preferred Securities of Equitable Trust will represent valid
and, subject to the qualifications set forth in paragraph 3 below, fully paid
and nonassessable undivided beneficial interests in the assets of Equitable
Trust.
3. The Preferred Security Holders, as beneficial owners of Equitable
Trust, will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments in connection with the transfer and
exchange of Certificates (as defined in the Declaration) and with replacement
of mutilated, destroyed, lost or stolen Certificates (as defined in the
Declaration) as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. We further
consent to the use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not thereby admit that
we come within the category of persons whose consent is required under
Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent , this opinion may not be
furnished or quoted to, or relied upon by, any other person for any other
purpose.
Yours very truly,
/s/ Richards, Layton & Finger
GCK/ks
EXHIBIT 12
EQUITABLE OF IOWA COMPANIES AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
The following table reflects the company's computation of the ratio of
earnings to fixed charges for the last five years:
<TABLE>
<CAPTION>
For the Year ended December 31,
---------------------------------------------
1995 1994 1993 1992 1991
---------------------------------------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Consolidated pretax income
from continuing operations
before equity income,
extraordinary items and
cumulative effect of
accounting change $128,506 $151,244 $134,995 $83,743 $43,128
Share of pretax losses of
unconsolidated majority-
owned affiliate -- -- -- -- --
Share of pretax earnings
of 50% owned affiliates 23 60 (368) (268) (392)
Distributed earnings of less
than 50% owned affiliates 3,689 137 321 464 128
Interest 13,809 8,071 11,177 11,099 10,012
Amortization of debt issuance
expenses 1 1 8 8 8
Interest portion of rental
expense 896 966 771 949 924
---------------------------------------------
Earnings $146,924 $160,479 $146,904 $95,995 $53,808
=============================================
Interest $13,809 $8,071 $11,177 $11,099 $10,012
Amortization of debt issuance
expenses 1 1 8 8 8
Interest portion of rental
expense 896 966 771 949 924
---------------------------------------------
Fixed Charges $14,706 $9,038 $11,956 $12,056 $10,944
=============================================
Ratio of Earnings to
Fixed Charges 9.99 17.76 12.29 7.96 4.92
=============================================
<FN>
No preferred stock dividends were paid during the periods presented.
Accordingly, the ratio of earnings to combined fixed charges and preferred
stock dividends is the same as the ratio of earnings to fixed charges.
The company guarantees debt of an unaffiliated party. Fixed charges of:
1995 - $2,310,000; 1994 - $2,327,000; 1993 - $2,359,000; 1992 - $2,389,000;
and 1991 - $2,416,000, have been excluded from the computation of the ratio
of earnings to fixed charges because the company does not believe it probable
that it will be required to satisfy this guarantee.
</TABLE>
Exhibit 23.3 - Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3, No. 33-______) and related Prospectus of
Equitable of Iowa Companies and Equitable of Iowa Companies Capital Trust for
the registration of $300,000,000 of debt securities, preferred stock, common
stock and warrants of Equitable of Iowa Companies and Preferred Securities of
Equitable of Iowa Companies Capital Trust and to the incorporation by reference
therein of our report dated February 7, 1996, with respect to the consolidated
financial statements and schedules of Equitable of Iowa Companies and sub-
sidiaries included in its Annual Report (Form 10-K) for the year ended December
31, 1995, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Des Moines, Iowa
March 20, 1996
EXHIBIT 25.1
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 FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
--------------------
EQUITABLE OF IOWA COMPANIES
(Exact name of obligor as specified in its charter)
Iowa 42-1083593
(State or other jurisdiction of (I.R.S.employer
incorporation or organization) identification number)
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(Address of principal executive offices) (Zip Code)
Debt Securities
(Title of Indenture Securities)
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 Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
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 now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
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.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association 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
Chicago and State of Illinois, on the 18th day of March, 1996.
The First National Bank of Chicago,
Trustee
By /s/ R. D. Manella
R. D. Manella
Vice President
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 18, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Equitable of
Iowa Companies and The First National Bank of Chicago, the undersigned, in
accordance with Section 321(b) of the Trust Indenture Act of 1939, as
amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R.D. Manella
R. D. Manella
Vice President
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1) 0081 4,003,995 1.a.
b. Interest-bearing
balances(2) 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities(from Schedule
RC-B, column A) 1754 0 2.a.
b. Available-for-sale
securities (from Schedule
RC-B, column D) 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the bank
and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 3,287,844 3.a.
b. Securities purchased under
agreements to resell 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C) RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for
loan and lease losses RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net
of unearned income,
allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 16,109,349 4.d.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-2
FDIC Certificate No.: 0/3/6/1/8
Schedule RC--Balance Sheet (continued)
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
5. Assets held in trading accounts 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized leases) 2145 591,753 6.
7. Other real estate owned (from
Schedule RC-M) 2150 8,796 7.
8. Investments in unconsolidated
subsidiaries and associated
companies (from Schedule RC-M) 2130 40,560 8.
9. Customers' liability to this
bank on acceptances outstanding 2155 524,918 9.
10. Intangible assets (from Schedule
RC-M) 2143 101,011 10.
11. Other assets (from Schedule RC-F) 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11) 2170 49,360,496 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-3
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1) RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1) RCON 6631 6,217,164 13.a.(1)
(2) Interest-
bearing RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II) RCFN 2200 14,435,503 13.b.
(1) Noninterest-
bearing RCFN 6631 625,206 13.b.(1)
(2) Interest-
bearing RCFN 6636 13,810,297 13.b.(2)
14. 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:
a. Federal funds purchased RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to repurchase RCFD 0279 880,215 14.b.
15. a. Demand notes issued to
the U.S. Treasury RCON 2840 93,942 15.a.
b. Trading Liabilities RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original maturity
of one year or less RCFD 2332 1,897,370 16.a.
b. With original maturity
of more than one year RCFD 2333 383,807 16.b.
17. Mortgage indebtedness and
obligations under capitalized
leases RCFD 2910 280,522 17.
18. Bank's liability on acceptance
executed and outstanding RCFD 2920 524,918 18.
19. Subordinated notes and
debentures RCFD 3200 1,225,000 19.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-4
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C>
20. Other liabilities (from
Schedule RC-G) RCFD 2930 1,444,364 20.
21. Total liabilities (sum of
items 13 through 20) RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock
and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock) RCFD 3839 2,320,126 25.
26. a. Undivided profits
and capital reserves RCFD 3632 519,849 26.a.
b. Net unrealized holding
gains (losses) on
available-for-sale
securities RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23 through
27) RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28) RCFD 3300 49,360,496 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the
number of the statement below that best
describes the most comprehensive level
of auditing work performed for the bank Number
by independent external auditors as of
any date during 1993 RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
</TABLE>
EXHIBIT 25.2
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 FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
--------------------
EQUITABLE OF IOWA COMPANIES CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Iowa To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
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 Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
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 now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
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.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association 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
Chicago and State of Illinois, on the 18th day of March, 1996.
The First National Bank of Chicago,
Trustee
By /s/ R.D. Manella
R. D. Manella
Vice President
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 18, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Declaration of Trust of Equitable
of Iowa Companies Capital Trust, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
R. D. Manella
Vice President
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1) 0081 4,003,995 1.a.
b. Interest-bearing
balances(2) 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities(from Schedule
RC-B, column A) 1754 0 2.a.
b. Available-for-sale
securities (from Schedule
RC-B, column D) 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the bank
and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 3,287,844 3.a.
b. Securities purchased under
agreements to resell 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C) RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for
loan and lease losses RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net
of unearned income,
allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 16,109,349 4.d.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-2
FDIC Certificate No.: 0/3/6/1/8
Schedule RC--Balance Sheet (continued)
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
5. Assets held in trading accounts 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized leases) 2145 591,753 6.
7. Other real estate owned (from
Schedule RC-M) 2150 8,796 7.
8. Investments in unconsolidated
subsidiaries and associated
companies (from Schedule RC-M) 2130 40,560 8.
9. Customers' liability to this
bank on acceptances outstanding 2155 524,918 9.
10. Intangible assets (from Schedule
RC-M) 2143 101,011 10.
11. Other assets (from Schedule RC-F) 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11) 2170 49,360,496 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-3
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1) RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1) RCON 6631 6,217,164 13.a.(1)
(2) Interest-
bearing RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II) RCFN 2200 14,435,503 13.b.
(1) Noninterest-
bearing RCFN 6631 625,206 13.b.(1)
(2) Interest-
bearing RCFN 6636 13,810,297 13.b.(2)
14. 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:
a. Federal funds purchased RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to repurchase RCFD 0279 880,215 14.b.
15. a. Demand notes issued to
the U.S. Treasury RCON 2840 93,942 15.a.
b. Trading Liabilities RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original maturity
of one year or less RCFD 2332 1,897,370 16.a.
b. With original maturity
of more than one year RCFD 2333 383,807 16.b.
17. Mortgage indebtedness and
obligations under capitalized
leases RCFD 2910 280,522 17.
18. Bank's liability on acceptance
executed and outstanding RCFD 2920 524,918 18.
19. Subordinated notes and
debentures RCFD 3200 1,225,000 19.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-4
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C> <C>
20. Other liabilities (from
Schedule RC-G) RCFD 2930 1,444,364 20.
21. Total liabilities (sum of
items 13 through 20) RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock
and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock) RCFD 3839 2,320,126 25.
26. a. Undivided profits
and capital reserves RCFD 3632 519,849 26.a.
b. Net unrealized holding
gains (losses) on
available-for-sale
securities RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23 through
27) RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28) RCFD 3300 49,360,496 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the
number of the statement below that best
describes the most comprehensive level
of auditing work performed for the bank Number
by independent external auditors as of
any date during 1993 RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
</TABLE>
EXHIBIT 25.3
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 FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. employer
identification number)
One First National Plaza, Chicago, Illinois 60670-0126
(Address of principal executive offices) (Zip Code)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department (312) 732-6919
(Name, address and telephone number of agent for service)
---------------------
EQUITABLE OF IOWA COMPANIES
(Exact name of obligor as specified in its charter)
Iowa 42-1083593
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
604 Locust Street
P.O. Box 1635
Des Moines, Iowa 50306-1635
(Address of principal executive offices) (Zip Code)
Guarantee of Preferred Securities of
Equitable of Iowa Companies Capital Trust
(Title of Indenture Securities)
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 Currency, Washington, D.C.,
Federal Deposit Insurance Corporation,
Washington, D.C., The Board of Governors of
the Federal Reserve System, Washington D.C.
(b) Whether it is authorized to exercise
corporate trust powers.
The trustee is authorized to exercise corporate
trust powers.
Item 2. Affiliations With the Obligor. If the obligor
is an affiliate of the trustee, describe each
such affiliation.
No such affiliation exists with the trustee.
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 now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by
Section 321(b) of the Act.
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.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association 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
Chicago and State of Illinois, on the 18th day of March, 1996.
The First National Bank of Chicago,
Trustee
By /s/ R. D. Manella
R. D. Manella
Vice President
* Exhibit 1,2,3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 12 of the Form T-1 of The First National
Bank of Chicago, filed as Exhibit 26 to the Registration Statement on Form
S-3 of The CIT Group Holdings, Inc., filed with the Securities and Exchange
Commission on February 16, 1993 (Registration No. 33-58418).
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
March 18, 1996
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a Preferred Securities Guarantee
Agreement of Equitable of Iowa Companies, the undersigned, in accordance
with Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby
consents that the reports of examinations of the undersigned, made by
Federal or State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange Commission
upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By: /s/ R. D. Manella
R. D. Manella
Vice President
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-1
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for December 31, 1995
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
Schedule RC--Balance Sheet
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from
depository institutions
(from Schedule RC-A):
a. Noninterest-bearing
balances and currency
and coin(1) 0081 4,003,995 1.a.
b. Interest-bearing
balances(2) 0071 9,240,284 1.b.
2. Securities
a. Held-to-maturity
securities(from Schedule
RC-B, column A) 1754 0 2.a.
b. Available-for-sale
securities (from Schedule
RC-B, column D) 1773 827,134 2.b.
3. Federal funds sold and
securities purchased under
agreements to resell in
domestic offices of the bank
and its Edge and Agreement
subsidiaries, and in IBFs:
a. Federal Funds sold 0276 3,287,844 3.a.
b. Securities purchased under
agreements to resell 0277 612,400 3.b.
4. Loans and lease financing
receivables:
a. Loans and leases, net of
unearned income (from
Schedule RC-C) RCFD 2122 16,463,126 4.a.
b. LESS: Allowance for
loan and lease losses RCFD 3123 353,777 4.b.
c. LESS: Allocated transfer
risk reserve RCFD 3128 0 4.c.
d. Loans and leases, net
of unearned income,
allowance, and reserve
(item 4.a minus 4.b and 4.c) 2125 16,109,349 4.d.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-2
FDIC Certificate No.: 0/3/6/1/8
Schedule RC--Balance Sheet (continued)
<TABLE>
<CAPTION>
Dollar Amounts C400 <-
in Thousands RCFD BIL MIL THOU
______________ ____ ____________ ____
<S> <C> <C> <C> <C> <C>
5. Assets held in trading accounts 3545 12,379,396 5.
6. Premises and fixed assets
(including capitalized leases) 2145 591,753 6.
7. Other real estate owned (from
Schedule RC-M) 2150 8,796 7.
8. Investments in unconsolidated
subsidiaries and associated
companies (from Schedule RC-M) 2130 40,560 8.
9. Customers' liability to this
bank on acceptances outstanding 2155 524,918 9.
10. Intangible assets (from Schedule
RC-M) 2143 101,011 10.
11. Other assets (from Schedule RC-F) 2160 1,633,056 11.
12. Total assets (sum of items
1 through 11) 2170 49,360,496 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-3
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices
(sum of totals of
columns A and C from
Schedule RC-E, part
1) RCON 2200 15,174,243 13.a.
(1) Noninterest-
bearing(1) RCON 6631 6,217,164 13.a.(1)
(2) Interest-
bearing RCON 6636 8,957,079 13.a.(2)
b. In foreign offices,
Edge and Agreement
subsidiaries, and
IBFs (from Schedule
RC-E, part II) RCFN 2200 14,435,503 13.b.
(1) Noninterest-
bearing RCFN 6631 625,206 13.b.(1)
(2) Interest-
bearing RCFN 6636 13,810,297 13.b.(2)
14. 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:
a. Federal funds purchased RCFD 0278 2,449,282 14.a.
b. Securities sold under
agreements to repurchase RCFD 0279 880,215 14.b.
15. a. Demand notes issued to
the U.S. Treasury RCON 2840 93,942 15.a.
b. Trading Liabilities RCFD 3548 7,523,265 15.b.
16. Other borrowed money:
a. With original maturity
of one year or less RCFD 2332 1,897,370 16.a.
b. With original maturity
of more than one year RCFD 2333 383,807 16.b.
17. Mortgage indebtedness and
obligations under capitalized
leases RCFD 2910 280,522 17.
18. Bank's liability on acceptance
executed and outstanding RCFD 2920 524,918 18.
19. Subordinated notes and
debentures RCFD 3200 1,225,000 19.
</TABLE>
Legal Title of Bank: The First National Bank of Chicago Call Date: 12/31/95
Address: One First National Plaza, Suite 0460 ST-BK: 17-1630 FFIEC 031
City, State Zip: Chicago, IL 60670-0460 Page RC-4
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands Bil Mil Thou
______________ ____________
<S> <C> <C> <C> <C> <C>
20. Other liabilities (from
Schedule RC-G) RCFD 2930 1,444,364 20.
21. Total liabilities (sum of
items 13 through 20) RCFD 2948 46,312,431 21.
22. Limited-Life preferred
stock and related surplus RCFD 3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock
and related surplus RCFD 3838 0 23.
24. Common stock RCFD 3230 200,858 24.
25. Surplus (exclude all
surplus related to
preferred stock) RCFD 3839 2,320,126 25.
26. a. Undivided profits
and capital reserves RCFD 3632 519,849 26.a.
b. Net unrealized holding
gains (losses) on
available-for-sale
securities RCFD 8434 7,315 26.b.
27. Cumulative foreign
currency translation
adjustments RCFD 3284 (83) 27.
28. Total equity capital
(sum of items 23 through
27) RCFD 3210 3,048,065 28.
29. Total liabilities,
limited-life preferred
stock, and equity
capital (sum of items
21, 22, and 28) RCFD 3300 49,360,496 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the
number of the statement below that best
describes the most comprehensive level
of auditing work performed for the bank Number
by independent external auditors as of
any date during 1993 RCFD 6724 N/A M.1.
1 = Independent audit of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm which
submits a report on the bank
2 = Independent audit of the bank's parent holding company conducted in
accordance with generally accepted auditing standards by a certified
public accounting firm which submits a report on the consolidated
holding company (but not on the bank separately)
3 = Directors' examination of the bank conducted in accordance with generally
accepted auditing standards by a certified public accounting firm (may be
required by state chartering authority)
4 = Directors' examination of the bank performed by other external auditors
(may be required by state chartering authority)
5 = Review of the bank's financial statements by external auditors
6 = Compilation of the bank's financial statements by external auditors
7 = Other audit procedures (excluding tax preparation work)
8 = No external audit work
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
</TABLE>
