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As filed with the Securities and Exchange Commission on September , 1999.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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TORCHMARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 63-0780404
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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2001 Third Avenue South
Birmingham, Alabama 35233
(205) 325-4200
(Address, including zip code, and telephone number of registrant's principal
executive office)
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LARRY M. HUTCHISON, ESQ
Vice President and General Counsel
2001 Third Avenue South
Birmingham, AL 35233
(205) 325-4200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copies to:
GREGORY S. CURRAN, ESQ. FRANCIS J. MORISON, ESQ.
CHRISTOPHER B. HARMON, ESQ. Davis, Polk & Wardwell
Maynard, Cooper & Gale, P.C. 450 Lexington Avenue
1901 Sixth Avenue North, Suite 2400 New York, New York 10017
Birmingham, Alabama 35203 (212) 450-4800
(205) 254-1000
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after this Registration Statement has become
effective.
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 being offered only in connection with dividend or
interest reinvestment plans, please check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
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The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities, and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
Prospectus
$300,000,000
<TABLE>
<CAPTION>
TORCHMARK CAPITAL TRUST I
<S> <C>
TORCHMARK CAPITAL TRUST II
</TABLE>
[LOGO OF TORCHMARK CORPORATION]
Preferred
Stock,
Depositary
Shares Trust Preferred Securities Guaranteed by
and Debt
Securities Torchmark Corporation
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TORCHMARK CORPORATION
. may sell preferred stock to the public;
. may sell depositary shares representing preferred stock to the public;
. may sell debt securities to the public; and
. will fully and unconditionally guarantee the payment by each trust of
any trust preferred securities based on its obligations under a
guarantee, a trust declaration and an indenture.
. our principal executive offices are located at 2001 Third Avenue South,
Birmingham, Alabama 35233, and our Telephone number is (205) 325-4200
THE TRUSTS
Torchmark Capital Trust I and Torchmark Capital Trust II may:
. sell trust preferred securities to the public;
. sell trust common securities to Torchmark;
. use the proceeds from these sales to buy an equal amount of debt
securities of Torchmark; and
. distribute the cash payments it receives on the debt securities it owns
to the holders of the trust preferred and trust common securities.
We urge you to read carefully this prospectus and the accompanying
prospectus supplement, which will describe the specific terms of the securities
being offered to you, before you make your investment decision.
Investing in the securities involves risks. See "Risk Factors" beginning on
page 3.
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Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.
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This prospectus may not be used to sell securities unless accompanied by a
prospectus supplement.
, 1999
1
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Risk Factors............................................................. 3
Forward-Looking Statements............................................... 6
Torchmark Corporation.................................................... 7
The Trusts............................................................... 7
Use of Proceeds.......................................................... 8
Ratio of Earnings from Continuing Operations to Combined Fixed Charges
and Preferred Stock Dividends........................................... 8
Description of Securities................................................ 9
Description of Capital Stock............................................. 9
Description of Depositary Shares......................................... 12
Description of the Trust Preferred Securities............................ 15
Description of Debt Securities........................................... 21
Description of the Trust Preferred Securities Guarantees................. 29
Relationship Among the Trust Preferred Securities, the Trust Preferred
Securities Guarantee and
the Debt Securities Held by Each Trust.................................. 31
Plan of Distribution..................................................... 32
Legal Opinions........................................................... 32
Experts.................................................................. 33
Where You Can Find More Information...................................... 33
</TABLE>
2
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RISK FACTORS
Investing in securities offered by this prospectus involves certain risks.
Any of the following risks could materially adversely affect our business
operating results and financial condition and could result in a loss of your
investment. You should carefully consider the following risks as well as the
other information contained or incorporated by reference in this prospectus
before purchasing the securities.
In this prospectus, "we", "us", "our" and "Torchmark" refer to Torchmark
Corporation. Unless the context otherwise requires, "Trusts" refers to
Torchmark Capital Trust I and Torchmark Capital Trust II.
We Operate in a Mature, Highly Competitive Industry, Which Could Limit Our
Ability to Gain or Maintain Our Position.
Life and health insurance is a mature industry. In recent years, the
industry has experienced virtually no growth in life insurance sales, though
the aging population has increased the demand for retirement savings products.
Insurance is a highly competitive industry and we encounter significant
competition in all lines of business from other insurance companies, many of
which have greater financial resources than us, as well as competition from
other providers of financial services.
The life and health insurance industry is consolidating, with larger, more
efficient organizations emerging from consolidation. Also, mutual insurance
companies are converting to stock ownership which will give them greater access
to capital markets than in the past.
Our ability to compete is dependent upon, among other things, our ability to
attract and retain distribution channels to market our insurance and investment
products, our ability to develop competitive and profitable products, our
ability to maintain low unit costs, and our maintenance of strong financial
strength ratings from rating agencies.
A Ratings Downgrade Could Adversely Affect Our Ability to Compete.
Ratings are an important factor in our competitive position. Rating
organizations periodically review the financial performance and condition of
insurers, including our insurance subsidiaries. A downgrade in the ratings of
our insurance subsidiaries could adversely affect their ability to sell their
products and their ability to compete for attractive acquisition opportunities.
Rating organizations assign ratings based upon several factors. While most
of the considered factors relate to the rated company, some of the factors
relate to general economic conditions and circumstances outside the rated
company's control. For the past several years rating downgrades in the industry
have exceeded upgrades.
Declining Interest-Rates Could Negatively Affect Our Spread Income.
Sudden and/or significant changes in interest rates expose insurance
companies to the risk of not earning anticipated spreads between the interest
rate earned on investments and the credited rates paid on outstanding policies.
Declining interest rates can negatively affect our spread income. While we
attempt to manage our investments to preserve spread income, we can give no
assurance that a significant decline in interest rates will not materially
affect such spreads. In addition, lower interest rates may result in lower
sales of our insurance and investment products.
Regulatory Changes Could Adversely Affect Our Business.
Our insurance subsidiaries are subject to government regulation in each of
the states in which they conduct business. State agencies have broad
administrative power over many aspects of the insurance business, which may
include premium rates, marketing practices, advertising, licensing agents,
policy forms, capital adequacy and permitted investments. Government regulators
are concerned primarily with the protection of policyholders rather than our
shareholders. Insurance laws, regulations and policies currently affecting us
and our subsidiaries may change at any time having an adverse effect on our
business. Furthermore, we cannot predict the timing or form of any future
regulatory initiatives.
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Medicare Supplement insurance constitutes a significant portion of our
health insurance business. Because of increasing medical cost inflation and
concerns about the solvency of the Medicare program, it is likely that changes
will be made to the Medicare program in the future. These changes could have an
adverse effect on our business.
The Tax Treatment of Our Policyholders' Earnings Could Change.
Under the Internal Revenue Code of 1986, as amended, income tax payable by
policyholders on investment earnings is deferred during the accumulation period
of certain life insurance and annuity products. This favorable tax treatment
may give certain of our products a competitive advantage over other non-
insurance products. To the extent that the internal revenue code is revised to
reduce the tax-deferred status of life insurance and annuity products, or to
increase the tax-deferred status of competing products, all life insurance
companies, including our subsidiaries, would be adversely affected with respect
to their ability to sell such products, and, depending on grandfathering
provisions, the surrenders of existing annuity contracts and life insurance
policies.
Industrywide Litigation Concerning Sales Practices, Agent Misconduct, Failure
to Supervise Agents, and Other Matters Could Result in Substantial Judgments
Against Us.
A number of civil jury verdicts have been returned against insurers in the
jurisdictions in which we do business involving the insurers' sales practices,
alleged agent misconduct, failure to properly supervise agents, and other
matters. Increasingly these lawsuits have resulted in the award of substantial
judgments against the insurer that are disproportionate to the actual damages,
including material amounts of punitive damages. In some states, including
Alabama, juries have substantial discretion in awarding punitive damages which
creates the potential for unpredictable material adverse judgments in any given
punitive damages suit. We, like other insurers, in the ordinary course of
business, are involved in such litigation or alternatively in arbitration. The
outcome of any such litigation or arbitration cannot be predicted with
certainty. In addition, in some class action and other lawsuits involving
insurers' sales practices, insurers have made material settlement payments.
Our Investments are Subject to Market Risks.
Our invested assets are subject to customary risks of defaults and changes
in market values. Factors that may affect the overall default rate on, and
market value of, our invested assets include interest rate levels, financial
market performance, and general economic conditions, as well as particular
circumstances affecting the businesses of individual borrowers and tenants.
Anti-takeover Provisions in Our Governing Documents and Delaware Law Could
Prevent or Delay a Change in Control of Torchmark.
Our governing documents contain provisions that make it more difficult to
implement corporate actions that may have the effect of delaying, deterring or
preventing a change in control. A stockholder might consider a change in
control in his or her best interest because he or she might receive a premium
for his or her common stock. Examples of these provisions include:
. a vote of more than 80% of the outstanding voting stock is required for
stockholders to amend specified provisions of the governing documents;
. our board of directors is divided into three classes, each serving
three-year terms;
. members of our board of directors may be removed only for cause and only
upon the affirmative vote of at least 80% of the outstanding voting
stock; and
. a vote of more than 80% of the outstanding voting stock is required to
approve specified transactions between us and any person or group that
owns at least 10% of our voting stock.
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Our board of directors has the ability, without stockholder action, to issue
shares of preferred stock that could, depending on their terms, delay,
discourage or prevent a change in control of Torchmark. In addition, the
Delaware General Corporation Law, under which we are incorporated, contains
provisions that impose restrictions on business combinations such as mergers
between us and a holder of 15% or more of our voting stock. You should read the
"Description of Securities" section for a more complete description of these
provisions.
Year 2000 Computer Compliance Issues May Adversely Affect Us.
The new millennium poses a significant concern to all businesses which use
computer systems or electronic data in their operations. This concern arises
because the computer systems and programs used by organizations cannot always
identify a proper date. For many years, programs were written using a two digit
code to represent a year. At the beginning of the year 2000, more digits are
needed to accurately determine the date in these programs. Without addressing
this issue, many computer programs could fail or produce erroneous results.
Additionally, companies which are electronically engaged with other businesses
or which rely on other businesses for services are exposed to risk of failure
by the electronic devices and computer systems of those other entities which
are not Year 2000 compliant. The potential of failure of these systems creates
considerable uncertainty and could potentially adversely affect the ongoing
operations and stability of a business.
Torchmark is exposed to these risks should its computer systems fail due to
date-related problems. We are also reliant on a number of third party
businesses and governmental agencies with which we either interact
electronically or depend upon for services in the conduct of our business.
These institutions include but are not limited to banks, financial
institutions, telecommunication companies, utilities, mail delivery
organizations, and a variety of governmental agencies. Should our computer
systems or the systems of our third-party business partners not be compliant,
we may be exposed to considerable risks, including business interruption, loss
of revenue, increased expense, loss of policyholders, and litigation.
To reduce our business risk to an acceptable level, we have established a
project plan to insure that our business-critical computer systems will be Year
2000 compliant. This plan also addresses third-party compliance issues. Under
the direction of executive management, objectives and timetables have been set
forth to achieve compliance in each geographic location where Torchmark
operates. Progress toward achieving those objectives is constantly monitored.
We currently expect the entire project, including all Year 2000 testing
activities, to be completed during 1999.
As of June 30, 1999, Torchmark remains on schedule to meet all of its Year
2000 compliance requirements. All known required software changes have been
completed, and further testing currently in process is planned to be completed
in 1999. With regard to third party concerns, we have in process the following
procedures:
(1) We are confirming, with our software vendors, the Year 2000 readiness
of our purchased software packages on all of our computer platforms;
(2) We are verifying the Year 2000 compliance status of our financial
business partners' computer and data communications systems to insure
readiness, including data interface testing with third parties; and
(3) All of our electronic operational systems (telephones, security,
utility, environmental) are being evaluated for Year 2000 compliance.
There can be no assurances that our Year 2000 efforts will be successful,
that interactions with other service providers with Year 2000 issues will not
impair our operations, or that the Year 2000 issue will not otherwise adversely
affect us.
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Should some of our systems not be available due to Year 2000 problems, in a
reasonably likely worst case scenario, we may experience significant delays in
our ability to perform certain functions, but we do not expect an inability to
perform critical functions or to otherwise conduct business. However, other
worst case scenarios, depending upon their duration, could have a material
adverse effect on us and our operations.
Our Ability to Pay Principal, Interest and/or Dividends on Offered Securities
is Limited by the Amounts Our Subsidiaries May Pay to Us.
Our ability to pay principal and interest on any Debt Securities or
dividends on any Preferred Stock is affected by the ability of our insurance
company subsidiaries, our principal sources of cash flow, to declare and
distribute dividends on their common stock and preferred stock held by us. Our
insurance company subsidiaries are subject to various state statutory and
regulatory restrictions, applicable to insurance companies generally, that
limit the amount of cash dividends, loans and advances that those subsidiaries
may pay to us. For example, under certain state insurance laws, an insurance
company generally may pay dividends only out of its unassigned surplus as
reflected in its statutory financial statements filed in that state.
We can give no assurance that more stringent restrictions will not be
adopted from time to time by states in which our insurance subsidiaries are
domiciled, which could have the effect, under certain circumstances, of
significantly reducing dividends or other amounts payable to us by such
subsidiaries without affirmative prior approval by state insurance regulatory
authorities. In addition, we rely on our ability to increase our premiums based
upon a number of factors including loss experience. Our inability to obtain
approval of rate increases in a timely manner from state insurance regulatory
authorities could adversely impact our business and the ability of our
insurance subsidiaries to declare and distribute dividends.
Our results may vary from year to year on account of fluctuations in policy
claims received by us. A significant increase in policy claims could adversely
impact our business and the ability of our insurance subsidiaries to declare
and distribute dividends.
In the event of the insolvency, liquidation, reorganization, dissolution or
other winding-up of one of our insurance subsidiaries, all creditors of such
subsidiary, including holders of life and health insurance policies, would be
entitled to payment in full out of the assets of such subsidiary before we, as
shareholder, would be entitled to any payments. Creditors of subsidiaries would
have to be paid in full before our creditors, including holders of debt
securities, and would be entitled to receive any payment from the assets of
such subsidiary.
FORWARD-LOOKING STATEMENTS
This prospectus and the information incorporated by reference include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, and Section 21E of the Securities Exchange Act of 1934 that
reflect Torchmark's current view with respect to future events and financial
performance. Some of the forward-looking statements can be identified by the
use of forward-looking words such as "believes," "expects," "may," "will,"
"should," "seeks," "approximately," "intends," "plans," "estimates," or
"anticipates" or the negative of those words or other comparable terminology.
These forward-looking statements are subject to inherent risks and
uncertainties, including those identified in "Risk Factors," as well as those
noted in the documents incorporated by reference which could cause actual
results to differ materially from historical results or anticipated results.
You are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of their dates. Torchmark undertakes no
obligation to update or revise forward-looking statements to reflect changed
assumptions, the occurrence of unanticipated events or changes to projections
over time.
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TORCHMARK CORPORATION
Torchmark is an insurance and diversified financial services holding company
that provides individual life and supplemental health insurance and related
products. Torchmark was incorporated in Delaware on November 19, 1979. It is
the ultimate parent company of Liberty National Life Insurance Company, Globe
Life And Accident Insurance Company, United American Insurance Company, United
Investors Life Insurance Company, and American Income Life Insurance Company.
Torchmark's principal executive offices are located at 2001 Third Avenue South,
Birmingham, Alabama 35233, and its telephone number is (205) 325-4200.
THE TRUSTS
We created two Delaware business trusts by executing, as sponsor, two
Declarations of Trust with four appointed trustees for each trust. The trusts
are named Torchmark Capital Trust I and Torchmark Capital Trust II (each, a
"Trust"). Prior to the issuance of trust preferred securities, we will file an
Amended and Restated Declaration of Trust for the Trust that will issue the
trust preferred securities. The trust declaration will state the terms and
conditions for the Trust to issue and sell its preferred securities and its
common securities. A form of trust declaration is filed as an exhibit to the
registration statement of which this prospectus is a part.
Each Trust will exist solely to:
. issue and sell its trust preferred and trust common securities;
. use the proceeds from the sale of its trust preferred and trust common
securities to purchase a series of our debt securities; and
. engage in other activities that are necessary or incidental to these
purposes.
We will purchase all of the trust common securities of each Trust. Unless
otherwise stated in the applicable prospectus supplement, the trust common
securities will represent an aggregate liquidation amount equal to at least 3%
of each Trust's total capitalization. The trust preferred securities will
represent the remaining approximately 97% of such Trust's total capitalization.
The trust common securities will have terms substantially identical to, and
will rank equal in priority of payment with, the trust preferred securities.
However, if an event of default under the related trust declaration has
occurred, then cash distributions and liquidation, redemption and other amounts
payable on the trust common securities will rank lower in priority of payment
than the trust preferred securities.
We will guarantee the trust preferred securities as described later in this
prospectus and the applicable prospectus supplement.
We have appointed four trustees to conduct the Trusts' business and affairs:
. Bank One Delaware, Inc. as the Delaware trustee; and
. three officers of Torchmark as the regular trustees.
Only Torchmark, as the only holder of the trust common securities of each
Trust, can remove or replace the trustees. In addition, we can increase or
decrease the number of trustees. The majority of trustees, however, will always
be regular trustees.
We will pay all fees and expenses related to each Trust and to each offering
of the related preferred securities, except each Trust will pay for its
obligations under the related trust preferred and trust common securities.
The Trusts will not have separate financial statements. The statements would
not be material to holders of the preferred securities because the Trusts will
not have any independent operations. The Trusts exist solely for the reasons
stated above.
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USE OF PROCEEDS
The net proceeds of the sale of the trust common and trust preferred
securities issued by each Trust will be invested by the applicable Trust in the
related series of our debt securities. Unless otherwise stated in the
applicable prospectus supplement, we intend to use those proceeds, in addition
to the net proceeds of any securities sold by us, for possible repurchases of
our outstanding securities and for general corporate purposes, including
working capital, repayment of bank debt, acquisitions and other business
opportunities.
RATIO OF EARNINGS FROM CONTINUING OPERATIONS TO COMBINED FIXED
CHARGES AND PREFERRED STOCK DIVIDENDS
The following table presents the ratio of earnings from continuing
operations to combined fixed charges and preferred stock dividends for
Torchmark for the periods indicated.
<TABLE>
<CAPTION>
Six Months Ended
Years Ended December 31, June 30,
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1994 1995 1996 1997 1998 1999
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<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings from continuing
operations to combined fixed
charges and preferred stock
dividends:
Excluding interest credited on
deposit products.................. 4.8 4.4 5.2 5.3 6.9
Including interest credited on
deposit products.................. 3.1 2.8 3.1 3.1 3.8
</TABLE>
For purposes of computing these ratios, earnings represent consolidated
income before income taxes and fixed charges. Combined fixed charges represent
interest expense, including interest credited on deposit products where
indicated, and that portion of rental expense deemed representative of the
interest factor. The denominator is increased for preferred stock dividend
requirements which represent the amount of pre-tax earnings required to cover
such dividend requirements.
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DESCRIPTION OF SECURITIES
This prospectus contains a summary of our preferred stock, depositary
shares, debt securities, preferred securities of the Trusts, and preferred
securities guarantees of Torchmark relating to each Trust. The securities
issued by the Trusts will be identical to each individual Trust, except as
otherwise described in the prospectus supplement for such securities. These
summaries are not meant to be a complete description of each security. However,
this prospectus and the accompanying prospectus supplement contain the material
terms and conditions for each security.
DESCRIPTION OF CAPITAL STOCK
The following descriptions of our capital stock are not complete. You should
also read our Restated Certificate of Incorporation, as amended, our Bylaws and
the Delaware General Corporation Law. We have filed copies of the Restated
Certificate of Incorporation and the Bylaws with the SEC. These documents are
incorporated by reference into the registration statement of which this
prospectus is a part.
We have 325,000,000 shares of capital stock authorized, of which 320,000,000
shares are common stock and 5,000,000 shares are preferred stock. As of June
30, 1999, we had 133,257,162 shares of common stock issued and outstanding, and
299,493 shares of our preferred stock were issued and outstanding.
Preferred Stock
We are authorized to issue 5,000,000 shares of preferred stock, 299,493
shares of which currently are issued and outstanding. The following is a
general description of the terms of our preferred stock. The particular terms
of any series of preferred stock offered hereby will be set forth in a
prospectus supplement relating to such securities. The rights, preferences,
privileges and restrictions, including dividend rights, voting rights, terms of
redemption and liquidation preferences, of the preferred stock of each series
will be fixed or designated pursuant to a certificate of designations adopted
by our Board of Directors or a duly authorized committee of our board. The
description of preferred stock set forth below and the description of the terms
of a particular series of preferred stock that will be set forth in a
prospectus supplement do not purport to be complete and are qualified in their
entirety by reference to the certificate of designations relating to such
series. In all respects, regardless of series, the preferred stock will rank in
preference to Torchmark's common stock as to payment of dividends and as to
distribution of assets of Torchmark upon the liquidation, dissolution or
winding up of Torchmark. Upon issuance against full payment of their purchase
price, shares of preferred stock will be fully paid and nonassessable.
Dividends. Holders of a series of preferred stock will be entitled to
receive, when, as and if declared by our Board of Directors out of any funds
legally available for that purpose, dividends in cash at such rates, payable on
such dates in each year and in respect of such dividend periods, as stated in
Torchmark's Restated Certificate of Incorporation or the certificate of
designations for that series of preferred stock, before any dividends may be
declared, paid or set apart for payment upon the common stock or any other
class of stock ranking junior to that series of preferred stock. No dividend
may be declared or paid on any series of preferred stock unless at the same
time a dividend in like proportion to the designated dividend amounts has been
declared or paid on each other series of preferred stock then issued and
outstanding ranking prior to or on a parity with that particular series with
respect to the payment of dividends. Dividends on preferred stock may be either
cumulative or noncumulative.
Liquidation Preference. In the event of our liquidation, dissolution or
winding up, whether voluntary or involuntary, holders of preferred stock of
each series (if any shares thereof are then issued and outstanding) will be
entitled to payment of the applicable liquidation price or prices plus accrued
dividends, out of our available assets, in preference to the holders of common
stock or any other class of stock ranking junior to such series of preferred
stock upon liquidation, dissolution or winding up.
Redemption and Conversion. Each series of preferred stock will be subject to
redemption, if applicable, on such terms, at such prices and on such dates as
may be set forth in the applicable certificates of designations. The preferred
stock will not be convertible.
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Voting Rights. The holders of the preferred stock have no voting rights
except as specifically required by statute and except for certain voting rights
specifically provided in Torchmark's Restated Certificate of Incorporation or
the certificates of designations creating the various series of such stock.
Voting rights of the preferred stock will be noncumulative.
Anti-Takeover Effects of Certain Provisions of Delaware Law and Our Restated
Certificate of Incorporation and Bylaws
Delaware Law
As a corporation organized under the laws of the State of Delaware, we are
subject to Section 203 of the Delaware General Corporation Law, which restricts
specified business combinations between us and an "interested stockholder" or
its affiliates or associates for a period of three years following the time
that the stockholder becomes an "interested stockholder." In general, an
"interested stockholder" is defined for purposes of Delaware law as a
stockholder owing 15% or more of our outstanding voting stock. The restrictions
do not apply if:
. prior to an interested stockholder becoming such, our board of directors
approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder;
. upon completion of the transaction which resulted in any person becoming
an interested stockholder, such interested stockholder owns at least 85%
of our voting stock outstanding at the time the transaction commenced,
excluding shares owned by employee stock ownership plans and persons who
are both directors and officers of Torchmark; or
. at or subsequent to the time an interested stockholder becomes such, the
business combination is both approved by our board of directors and
authorized at an annual or special meeting of our stockholders, not by
written consent, by the affirmative vote of at least 66 2/3% of the
outstanding voting stock not owned by the interested stockholder.
Under some circumstances, Section 203 makes it more difficult for a person
who would be an "interested stockholder" to effect various business
combinations with a corporation for a three-year period, although the
stockholders may elect to exclude a corporation from the restrictions imposed
under Section 203. Our Restated Certificate of Incorporation does not exclude
us from the restrictions imposed under Section 203. It is anticipated that the
provisions of Section 203 may encourage companies interested in acquiring us to
negotiate in advance with our board of directors since the stockholder approval
requirement would be avoided if a majority of the directors then in office
approves, prior to the date on which a stockholder becomes an interested
stockholder, either the business combination or the transaction which results
in the stockholder becoming an interested stockholder.
Restated Certificate of Incorporation and Bylaw Provisions
The summary below describes certain provisions of our Restated Certificate
of Incorporation and Bylaws which may have the effect, either alone or in
combination with the provisions of Section 203 discussed above, of making more
difficult or discouraging a tender offer, proxy contest or other takeover
attempt that is opposed by our board of directors but that a stockholder might
consider to be in such stockholder's best interest. Those provisions include:
. restrictions on the rights of stockholders to remove directors;
. prohibitions against stockholders calling a special meeting of
stockholders or acting by unanimous written consent in lieu of a
meeting; and
. restrictions on business combination transactions with "interested
stockholders."
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Number of Directors; Classified Board of Directors; Removal; Filling
Vacancies. Our Bylaws provide that the number of directors shall consist of not
less than seven nor more than 15 persons which exact number shall be fixed by a
majority vote of the board of directors. The board of directors are divided
into three classes with the classes to be as nearly equal in number as
possible. The directors serve three year terms.
Our Bylaws provide that any vacancies will be filled by the affirmative vote
of a majority of the remaining directors, or if all directors have been
removed, by a majority vote of the stockholders. Accordingly, absent an
amendment to the Bylaws, our board of directors could prevent any stockholder
from enlarging the board of directors and filling the new directorships with
such stockholder's own nominees. Moreover, our Bylaws provide that directors
may be removed only for cause and only upon the affirmative vote of holders of
at least 80% of our voting stock.
The classification of directors could have the effect of making it more
difficult for stockholders to change the composition of the board of directors.
At least two annual meetings of stockholders, instead of one, are generally
required to effect a change in a majority of the board of directors. Such a
delay may help ensure that our directors, if confronted by a holder attempting
to force a proxy contest, a tender or exchange offer, or an extraordinary
corporate transaction, would have sufficient time to review the proposal as
well as any available alternatives to the proposal and to act in what they
believe to be the best interest of the stockholders. The classification
provisions will apply to every election of directors, however, regardless of
whether a change in the composition of the board of directors would be
beneficial to us and our stockholders and whether or not a majority of our
stockholders believe that such a change would be desirable.
The classification provisions could also have the effect of discouraging a
third party from initiating a proxy contest, making a tender offer or otherwise
attempting to obtain control of Torchmark, even though such an attempt might be
beneficial to us and our stockholders. The classifications of the board of
directors could thus increase the likelihood that incumbent directors will
retain their positions. In addition, because the classification provisions may
discourage accumulations of large blocks of our stock by purchasers whose
objective is to take control of Torchmark and remove a majority of the board of
directors, the classification of the board of directors could tend to reduce
the likelihood of fluctuations in the market price of the common stock that
might result from accumulations of large blocks of our stock. Accordingly,
stockholders could be deprived of opportunities to sell their shares of common
stock at a higher market price than might otherwise be the case.
No Stockholder Action by Written Consent; Special Meetings. Our Bylaws
provide that stockholder action can be taken only at an annual or special
meeting of stockholders, and stockholder action may not be taken by written
consent in lieu of a meeting. Special meetings of stockholders can be called
only by our board of directors by a resolution adopted by a majority of the
board of directors, upon not less than ten nor more than 60 days' written
notice. Moreover, the business permitted to be conducted at any special meeting
of stockholders is limited to the business described in the notice of meeting
given by the board of directors, unless the consideration of new business is
approved by the unanimous consent of all the stockholders entitled to vote at
the meeting.
The provisions of our Restated Certificate of Incorporation and Bylaws
prohibiting stockholder action by written consent and permitting special
meetings to be called only at the request of a majority of the board of
directors, may have the effect of delaying consideration of a stockholder
proposal until the next annual meeting. The provisions would also prevent the
holders of a majority of our voting stock from unilaterally using the written
consent procedure to take stockholder action. Moreover, a stockholder could not
force stockholder consideration of a proposal over the opposition of a majority
of the board of directors, by calling a special meeting of stockholders prior
to the time such parties believe such consideration to be appropriate.
Fair Price Provisions Involving Business Combinations. Our Restated
Certificate of Incorporation contains a "fair price" provision that applies to
certain business combination transactions involving any person, entity or group
that beneficially owns at least 10% of our aggregate voting stock--such person,
entity or group is referred to in the Restated Certificate of Incorporation as
an "interested stockholder". This
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provision requires the affirmative vote of the holders of not less than 80% of
our voting stock to approve specified transactions between an interested
stockholder or its affiliate and us or our subsidiaries, including:
. any merger or consolidation;
. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of assets (in one transaction or a series of transactions)
having a fair market value of $5,000,000 or more;
. the issuance or transfer of any of our securities or any of our
subsidiaries' securities by us or any of our subsidiaries to an
interested stockholder in exchange for cash, securities or other
property having a fair market value of $5,000,000 or more;
. the adoption of a plan or proposal for our liquidation or dissolution
proposed by or on behalf of an interested stockholder or its affiliate;
. any reclassification of securities, recapitalization, or any other
transaction involving us or any of our subsidiaries that would have the
effect of increasing the voting power of an interested stockholder or
its affiliate;
This voting requirement will not apply to any transaction approved by a
majority vote of the directors unaffiliated with the interested stockholder and
existing before the interested stockholder became a stockholder. This voting
requirement will also not apply to any transaction involving the payment of
consideration to holders of Torchmark's outstanding capital stock in which
certain minimum "fair price" and procedural requirements are met.
This "fair price" provision could have the effect of delaying or preventing
a change in control of Torchmark in a transaction of series of transactions
that does not satisfy the stated criteria.
Amendments. Ordinarily, the Bylaws may be amended by a majority vote of the
board of directors or by a majority vote of stockholders at a special or annual
meeting. However, the affirmative vote of holders of not less than 80% of our
voting stock, voting together as a single class, shall be required to alter,
amend, adopt any provision inconsistent with or to repeal certain provisions of
our Bylaws and Restated Certificate of Incorporation, including those anti-
takeover provisions discussed in this section.
Issuance of Additional Preferred Stock. Our Restated Certificate of
Incorporation authorizes the board of directors to create and issue additional
preferred stock for such consideration and on such terms as it may determine.
The rights assigned to a series of preferred stock by the board including
voting, dividend and conversion rights, may delay, discourage or prevent a
change in control of Torchmark. For example, the board of directors has the
power, to the extent consistent with its fiduciary duties, to issue a series of
preferred stock with preferential voting rights to persons friendly to
management to attempt to block a post-tender offer merger or other transaction
by which a third party seeks control, and thereby assist management to retain
its position.
DESCRIPTION OF DEPOSITARY SHARES
The following description of the depositary shares is not complete. You
should also read the form of Deposit Agreement relating to the depositary
shares and the depositary receipt relating to the preferred stock that is
attached to the Deposit Agreement. We have filed those documents with the SEC
as an exhibit to the registration statement of which this prospectus is a part.
General
If we elect to offer fractional interests in shares of preferred stock, we
will provide for the issuance by a depositary to the public of receipts for
depositary shares. Each depositary share will represent fractional interests of
preferred stock. We will deposit the shares of preferred stock underlying the
depositary shares under a Deposit Agreement between us and a bank or trust
company selected by us which will sometimes be
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referred to herein as the depositary. The bank or trust company must have its
principal office in the United States and a combined capital and surplus of at
least $50 million. The depositary receipts will evidence the depositary shares
issued under the Deposit Agreement.
The Deposit Agreement will contain terms applicable to the holders of
depositary shares in addition to the terms stated in the depositary receipts.
Each owner of depositary shares will be entitled to all the rights and
preferences of the preferred stock underlying the depositary shares in
proportion to the applicable fractional interest in the underlying shares of
preferred stock. The depositary will issue the depositary receipts to
individuals purchasing the fractional interests in shares of the related
preferred stock according to the terms of the offering described in a
prospectus supplement.
Dividends and Other Distributions
The depositary will distribute all cash dividends or other cash
distributions received for the preferred stock to the entitled record holders
of depositary shares in proportion to the number of depositary shares that the
holder owns on the relevant record date. The depositary will distribute only an
amount that can be distributed without attributing to any holder of depositary
shares a fraction of one cent. The depositary will add the undistributed
balance to and treat it as part of the next sum received by the depositary for
distribution to holders of depositary shares.
If there is a non-cash distribution, the depositary will distribute property
received by it to the entitled record holders of depositary shares, in
proportion, insofar as possible, to the number of depositary shares owned by
the holders, unless the depositary determines, after consultation with us, that
it is not feasible to make such distribution. If this occurs, the depositary
may, with our approval, sell such property and distribute the net proceeds from
the sale to the holders. The Deposit Agreement also will contain provisions
relating to how any subscription or similar rights that we may offer to holders
of the preferred stock will be available to the holders of the depositary
shares.
Conversion, Exchange and Redemption
If any series of preferred stock underlying the depositary shares is
converted or exchanged, each record holder of depositary receipts will have the
right or obligation to convert or exchange the depositary shares represented by
the depositary receipts.
Whenever we redeem shares of preferred stock held by the depositary, the
depositary will redeem, at the same time, the number of depositary shares
representing the preferred stock. The depositary will redeem the depositary
shares from the proceeds it receives from the corresponding redemption, in
whole or in part, of the applicable series of preferred stock.
The depositary will mail notice of redemption or conversion to the record
holders of the depositary shares which are to be redeemed or converted between
30 and 60 days before the date fixed for redemption or conversion. The
redemption price per depositary share will be equal to the applicable fraction
of the redemption price per share on the applicable series of preferred stock.
If less than all the depositary shares are to be redeemed, the depositary will
select which shares are to be redeemed by lot or by proportionate allocation.
After the date fixed for redemption or conversion, the depositary shares
called for redemption or conversion will no longer be outstanding. When the
depositary shares are no longer outstanding, all rights of the holders will
end, except the right to receive money, securities or other property payable
upon redemption.
Voting
When the depositary receives notice of a meeting at which the holders of the
preferred stock are entitled to vote, the depositary will mail the particulars
of the meeting to the record holders of the depositary shares. Each
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record holder of depositary shares on the record date may instruct the
depositary on how to vote the shares of preferred stock underlying the holder's
depositary shares. The depositary will try, if practical, to vote the number of
shares of preferred stock underlying the depositary shares according to those
instructions. We will agree to take all reasonable action requested by the
depositary to enable it to vote as instructed.
Amendments
We and the depositary may agree to amend the Deposit Agreement and the
depositary receipt evidencing the depositary shares. Any amendment that (a)
imposes or increases certain fees, taxes or other charges payable by the
holders of the depositary shares as described in the Deposit Agreement or that
(b) otherwise prejudices any substantial existing right of holders of
depositary shares, will not take effect until 30 days after the depositary has
mailed notice of the amendment to the record holders of depositary shares. Any
holder of depositary shares that continues to hold its shares at the end of the
30-day period will be deemed to have agreed to the amendment.
Termination
We may direct the depositary to terminate the Deposit Agreement by mailing a
notice of termination to holders of depositary shares at least 30 days prior to
termination. If 90 days after the depositary has provided notice to us of its
election to resign a new depositary has not been appointed, the depositary may
terminate the Deposit Agreement. In addition, a Deposit Agreement will
automatically terminate if:
. the depositary has redeemed all related outstanding depositary shares;
or
. we have liquidated, terminated or wound up our business and the
depositary has distributed the preferred stock of the relevant series to
the holders of the related depositary shares.
Payment of Fees And Expenses
We will pay all fees, charges and expenses of the depositary, including the
initial deposit of the preferred stock and any redemption of the preferred
stock. Holders of depositary shares will pay transfer and other taxes and
governmental charges and any other charges as are stated in the Deposit
Agreement for their accounts.
Resignation And Removal of Depositary
At any time, the depositary may resign by delivering notice to us, and we
may remove the depositary. Resignations or removals will take effect upon the
appointment of a successor depositary and its acceptance of the appointment.
The successor depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust company having its
principal office in the United States and having a combined capital and surplus
of at least $50 million.
Miscellaneous
The depositary will forward to the holders of depositary shares all reports
and communications from us that are delivered to the depositary and that we are
required by law, the rules of an applicable securities exchange, our Restated
Certificate of Incorporation or the Certificate of Determination to furnish to
the holders of the preferred stock. Neither we nor the depositary will be
liable if the depositary is prevented or delayed by law or any circumstances
beyond its control in performing its obligations under the Deposit Agreement.
The Deposit Agreement limits our obligations and the depositary's obligations
to performance in good faith of the duties stated in the Deposit Agreement.
Neither we nor the depositary will be obligated to prosecute or defend any
legal proceeding connected with any depositary shares or preferred stock unless
the holders of depositary shares requesting us to do so furnish us with
satisfactory indemnity. In performing our obligations, we and the depositary
may rely upon the written advice of our counsel or accountants, on any
information that competent people provide to us and on documents that we
believe are genuine.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES
The following is a summary of the general terms of the trust preferred
securities. We will file a prospectus supplement that may contain additional
terms when a Trust issues preferred securities. The terms presented here,
together with the terms in a related prospectus supplement, will be a
description of the material terms of the trust preferred securities to be sold.
You should also read the trust declaration for each Trust and the indentures
between Torchmark and certain trustees relating to the issuance of the debt
securities by Torchmark. We have filed these documents with the SEC as exhibits
to the registration statement of which this prospectus is a part.
General
Each trust declaration authorizes the regular trustees to issue on behalf of
a Trust one series of trust preferred securities that will have the terms
described in a prospectus supplement. A Trust will use the proceeds from the
sale of its preferred and common securities to purchase a series of our debt
securities. The property trustee will hold the debt securities in trust for the
benefit of the holders of the trust preferred and trust common securities.
Torchmark will guarantee the trust preferred securities under a Trust
Preferred Securities Guarantee. We will agree to make payments of distributions
and payments on redemption or liquidation concerning a Trust's trust preferred
securities, but only if the Trust has funds available to make those payments
and has not done so. See "Description of the Trust Preferred Securities
Guarantees" on page 26.
The assets of a Trust available for distribution to the holders of its trust
preferred securities will be limited to payments from us under the series of
debt securities held by the Trust. If we fail to make a payment on the related
debt securities, the Trust will not have enough funds to make related payments,
including distributions on its preferred securities.
Each guarantee, when taken together with our obligations under the related
series of debt securities and the indenture and the related trust declaration,
will provide a full and unconditional guarantee of amounts due on the trust
preferred securities issued by a Trust.
Each trust declaration will be qualified as an indenture under the Trust
Indenture Act of 1939. Each property trustee will act as indenture trustee for
the trust preferred securities to be issued by the applicable Trust, in order
to comply with the provisions of the Trust Indenture Act.
Each series of trust preferred securities will have the terms, including
distributions, redemption, voting, liquidation rights and such other preferred,
deferred or other special rights or restrictions as are described in the
relevant trust declaration or made part of the trust declaration by the Trust
Indenture Act or by the Delaware Business Trust Act. The terms of the preferred
securities will mirror the terms of the debt securities held by the applicable
Trust.
The prospectus supplement relating to the trust preferred securities of a
Trust will describe the specific terms of the preferred securities, including:
. the name of the trust preferred securities;
. the dollar amount and number of trust preferred securities issued;
. the annual distribution rate(s), or method of determining the rate(s),
the payment date(s) and the record dates used to determine the holders
who are to receive distributions and the place(s) where distributions
and other amounts payable will be paid;
. any provision relating to deferral of distribution payments;
. the date from which distributions shall be cumulative;
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. the optional redemption provisions, if any, including the prices, time
periods and other terms and conditions for which trust preferred
securities will be purchased or redeemed, in whole or in part;
. the terms and conditions, if any, upon which the applicable series of
debt securities may be distributed to holders of such trust preferred
securities;
. the voting rights, if any, of holders of the trust preferred securities;
. any securities exchange on which the trust preferred securities will be
listed;
. whether such trust preferred securities are to be issued in book-entry
form and represented by one or more global certificates, and if so, the
depositary for such global certificates and the specific terms of the
depositary arrangements; and
. any other relevant rights, preferences, privileges, limitations or
restrictions of such trust preferred securities.
Each prospectus supplement will describe the United States federal income
tax considerations applicable to the purchase, holding and disposition of the
series of trust preferred securities covered by the prospectus supplement.
Liquidation Distribution Upon Dissolution
Unless otherwise specified in the applicable prospectus supplement, each
trust declaration states that the related Trust shall be dissolved:
. upon the expiration of the term of such Trust;
. upon the bankruptcy of Torchmark;
. upon the filing of a certificate of dissolution or its equivalent by
Torchmark;
. upon the consent of at least a majority in liquidation amount of the
trust preferred and trust common securities of the related Trust, voting
together as a single class to dissolve the Trust;
. 90 days after the revocation of our charter and the charter is not
reinstated during that 90-day period;
. upon the written direction from us and after the distribution of the
related debt securities directly to the holders of the trust preferred
and trust common securities of the applicable Trust in exchange for
those securities within 90 days after notice, as long as the regular
trustees receive an opinion of counsel experienced in such matters to
the effect that the holders of the trust preferred and the trust common
securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the termination of the Trust
and the distribution of the debt securities;
. upon the occurrence of adverse tax or other specified events that cause
the Trust to be dissolved and the distribution of the related debt
securities directly to the holders of the trust preferred and trust
common securities of the Trust;
. before the issuance of any securities with the consent of all regular
trustees and Torchmark;
. upon the redemption of all of the trust common and trust preferred
securities of such Trust; or
. upon entry of a court order for the dissolution of Torchmark or such
Trust.
Unless otherwise specified in the applicable prospectus supplement, in the
event of a dissolution, after the Trust pays all amounts owed to creditors, the
holders of the trust preferred and trust common securities issued by the Trust
will be entitled to receive:
. cash equal to the aggregate liquidation amount of each trust preferred
and trust common security specified in an accompanying prospectus
supplement, plus accumulated and unpaid distributions to the date of
payment; unless
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. debt securities in an aggregate principal amount equal to the aggregate
liquidation amount of the trust preferred and trust common securities
are distributed to the holders of the trust preferred and trust common
securities.
After the liquidation date is fixed for any distribution of debt securities:
. the trust preferred securities will no longer be deemed to be
outstanding;
. DTC or its nominee, as the registered holder of the trust preferred
securities, will receive a registered global certificate or certificates
representing debt securities to be delivered upon distribution with
respect to the trust preferred securities held by DTC or its nominee;
and
. any certificates representing trust preferred securities not held by DTC
or its nominee will be deemed to represent debt securities having a
principal amount equal to the $25 stated liquidation amount of the trust
preferred securities and bearing accrued and unpaid interest in an
amount equal to the accumulated and unpaid distributions on the trust
preferred securities until the holder of those certificates presents
them to the registrar for the trust preferred securities for transfer or
reissuance.
If the Trust cannot pay the full amount due on its trust preferred and trust
common securities because it does not have enough assets for payment, then the
amounts the Trust owes on its trust preferred and trust common securities will
be proportionately allocated. However, if an event of default under the related
trust declaration has occurred, the total amounts due on the trust preferred
securities will be paid before any distribution on the trust common securities.
Declaration Events of Default
An event of default under the indenture relating to a series of debt
securities is an event of default under the trust declaration of the Trust that
owns those debt securities. See "Description of Debt Securities--Events of
Default."
Under the trust declaration, we, as the holder of the trust common
securities, will be treated as if we have waived an event of default under the
trust declaration that affects us until all events of default under the trust
declaration affecting the capital securities have been cured or eliminated.
Torchmark and the regular trustees of a Trust must file annually with the
applicable property trustee a certificate stating whether or not Torchmark is
in compliance with all the applicable conditions and covenants under the
related trust declaration.
Upon the happening of an event of default under the trust declaration, the
property trustee of the applicable Trust, as the sole holder of the debt
securities held by that Trust, will have the right under any indenture to
declare the principal of, premium, if any, and interest on such debt securities
to be immediately due and payable.
If a property trustee fails to enforce its rights under the related trust
declaration or any indenture to the fullest extent permitted by law and by the
terms of the trust declaration and any indenture, any holder of the trust
preferred securities issued by the Trust may sue us, or seek other remedies, to
enforce the property trustee's rights under the trust declaration or any
indenture without first instituting a legal proceeding against the property
trustee or any other person.
If we fail to pay principal, premium, if any, or interest on a series of
debt securities when payable, then a holder of the related trust preferred
securities may directly sue us or seek other remedies, to collect its
proportional allocation of payments owned.
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Removal and Replacement of Trustees
Only we, as the only holder of a Trust's trust common securities, have the
right to remove or replace the trustees of such Trust. The resignation or
removal of any trustee and the appointment of a successor trustee shall be
effective only on the acceptance of appointment by the successor trustee in
accordance with the provisions of the trust declaration for that Trust.
Conversion or Exchange Rights
The terms that govern whether trust preferred securities of any series are
convertible into or exchangeable for our common stock or other securities of
ours will be set forth in the prospectus supplement relating to the trust
preferred securities. The terms will include provisions regarding whether
conversion or exchange is mandatory, at the option of the holder or at our
option and may include provisions that adjust the number of shares of our
common stock or other securities of ours that the holders of trust preferred
securities may receive.
Mergers, Consolidations or Amalgamations of the Trusts
A Trust may not consolidate, amalgamate, merge with or into, be replaced by,
or convey, transfer or lease its properties and assets substantially as an
entirety to, any other corporation or other body ("Merger Event"), except as
described below. A Trust may, with the consent of a majority of its regular
trustees and without the consent of the holders of its trust preferred and
trust common securities or the other Trustees, consolidate, amalgamate, merge
with or into, or be replaced by another Trust, provided that:
. the successor entity either:
(1) assumes all of the obligations of the Trust relating to its trust
preferred and trust common securities; or
(2) substitutes for the Trust's trust preferred and trust common
securities other securities substantially similar to the Trust's
trust preferred and trust common securities, so long as the
successor securities rank the same as the trust preferred and trust
common securities for distributions and payments upon liquidation,
redemption and otherwise;
. we acknowledge a trustee of the successor entity who has the same powers
and duties as the property trustee of the Trust as the holder of the
particular series of debt securities;
. the Merger Event does not adversely affect the rights, preferences and
privileges of the holders of its trust preferred and trust common
securities or successor securities in any material way, except
concerning any dilution of the holders' interest in the new entity;
. the Merger Event does not cause the trust preferred securities or
successor securities to be downgraded by any nationally recognized
statistical rating organization;
. the successor entity has a purpose identical to that of the Trust;
. the trust preferred securities or any successor securities are listed,
or any successor securities will be listed upon notification of
issuance, on any national securities exchange or with another
organization on which the preferred securities are then listed;
. prior to the Merger Event, we have received an opinion of counsel from a
firm qualified to give such opinion stating that (a) the Merger Event
does not adversely affect the rights, preferences and privileges of the
holders of the trust preferred securities, including any successor
securities, in any material respect and (b) following the Merger Event,
neither the Trust nor the successor entity will be required to register
as an "investment company" under the Investment Company Act of 1940; and
. we guarantee the obligations of the successor entity under the successor
securities in the same manner as in the applicable guarantee and the
guarantee of the trust common securities for the Trust, if any.
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In addition, unless all of the holders of the trust preferred and trust
common securities approve otherwise, a Trust shall not 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
transaction would cause the Trust or the successor entity to be classified as
other than a grantor trust for United States federal income tax purposes.
Voting Rights; Amendment of Declarations
The holders of trust preferred securities have no voting rights except as
discussed above and under "--Mergers, Consolidations or Amalgamations of the
Trusts" and "Description of the Trust Preferred Securities Guarantees--
Amendments and Assignment," and as otherwise required by law and the trust
declaration for the applicable Trust.
A trust declaration may be amended if approved by a majority of the regular
trustees, and in limited circumstances, the property trustee, of the applicable
Trust. However, if any proposed amendment provides for, or the regular trustees
otherwise propose to effect,
. any action that would adversely affect the powers, preferences or
special rights of the Trust's trust preferred and trust common
securities, whether by way of amendment to such trust declaration or
otherwise, or
. the dissolution, winding-up or termination of the Trust other than under
the terms of its trust declaration,
then the holders of the Trust's trust preferred and trust common securities
voting together as a single class will be entitled to vote on the amendment or
proposal. In that case, the amendment or proposal will only be effective if
approved by at least a majority in liquidation amount of the trust preferred
and trust common securities affected by the amendment or proposal.
If any amendment or proposal referred to above would adversely affect only
the trust preferred securities or only the trust common securities of a Trust,
then only the affected class will be entitled to vote on the amendment or
proposal and the amendment or proposal will only be effective with the approval
of at least a majority in liquidation amount of the affected class.
Notwithstanding the foregoing, specified provisions of the trust declaration
may not be amended without the consent of all holders of the trust's preferred
and common securities.
No amendment may be made to a trust declaration, if the amendment would:
. cause the related Trust to be characterized as other than a grantor
trust for United States federal income tax purposes;
. reduce or otherwise adversely affect the powers of the related property
trustee, unless approved by that property trustee; or
. cause the related Trust to be deemed to be an "investment company" which
is required to be registered under the Investment Company Act.
The holders of a majority in aggregate liquidation amount of the trust
preferred securities of each Trust have the right to:
. direct the time, method and place of conducting any proceeding for any
remedy available to the property trustee of the Trust; or
. direct the exercise of any Trust or power conferred upon such property
trustee under that Trust's trust declaration, including the right to
direct the property trustee, as the holder of a series of debt
securities, to
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(1) exercise the remedies available under any indenture involving the
debt securities,
(2) waive any event of default under any indenture that is waivable,
(3) cancel an acceleration of the principal of the debt securities, or
(4) consent to any amendment, modification or termination of the
indenture where consent is required,
but if an event of default under any indenture has occurred and is continuing,
then the holders of 25% of the aggregate liquidation amount of the trust
preferred securities may direct the property trustee to declare the debt
securities immediately due and payable. If, however, any indenture requires the
consent of the holders of more than a majority in aggregate principal amount of
a series of debt securities (a "super-majority"), then the property trustee for
the trust preferred securities related to that series of debt securities must
get approval of the holders of the same super-majority in liquidation amount of
the trust preferred securities. In addition, before taking any of the foregoing
actions, except for directing the time, method and place of conducting any
proceeding for any remedy available to the property trustee, the property
trustee must obtain an opinion of counsel from a firm qualified to give such
opinion stating that the action would not cause the Trust to be classified as
other than a grantor trust for United States federal income tax purposes.
The property trustee of a Trust will notify all trust preferred securities
holders of the Trust of any notice received from the Trustee concerning the
debt securities held by the Trust.
As described in each trust declaration, the regular trustee may hold a
meeting to have trust preferred securities holders vote on a change or have
them approve the change by written consent.
If a vote of trust preferred securities holders is taken or a consent is
obtained, any trust preferred securities that are owned by us or any of our
affiliates will, for purposes of the vote or consent, be treated as if they
were not outstanding. This means that:
. we and any of our affiliates will not be able to vote on or consent to
matters requiring the vote or consent of holders of trust preferred
securities; and
. any trust preferred securities owned by us, the regular trustees or any
of our respective affiliates will not be counted in determining whether
the required percentage of votes or consents has been obtained.
Information Concerning the Property Trustees
The property trustees will be unaffiliated with us. For matters relating to
compliance with the Trust Indenture Act, the property trustee of each Trust
will have all of the duties and responsibilities of an indenture trustee under
the Trust Indenture Act. Each property trustee, other than during the
occurrence and continuance of an event of default under the trust declaration
under the applicable Trust, undertakes to perform only those duties that are
specifically stated in the applicable trust declaration and, upon an event of
default under the trust declaration, must use the same degree of care and skill
as a prudent person would exercise or use in the conduct of his or her own
affairs. In addition, a property trustee is under no obligation to exercise any
of the powers given it by the applicable trust declaration at the request of
any holder of trust preferred securities unless it is offered reasonable
security or indemnity against the costs, expenses and liabilities that it might
incur.
Miscellaneous
The trustees of each Trust are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that:
. the Trust will not be deemed to be an "investment company" required to
be registered under the Investment Company Act;
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. the Trust will be classified as a grantor trust for United States
federal income tax purposes; and
. the debt securities held by the Trust will be treated as indebtedness of
Torchmark for United States federal income tax purposes.
Torchmark and the trustees of a Trust are authorized to take any legal
action that we and the trustees of that Trust determine to be necessary or
desirable for such purposes so long as the action does not violate the Trust's
certificate of trust or its trust declaration.
Holders of trust preferred securities have no preemptive or similar rights.
A Trust may not borrow money, issue debt, execute mortgages or pledge any of
its assets.
The property trustee will promptly make distributions to the holders of the
Trust's preferred securities and common securities out of funds received by
such Trust from holding our debt securities.
Governing Law
Each trust declaration and the related trust preferred securities will be
governed by and construed in accordance with the laws of the State of Delaware.
DESCRIPTION OF DEBT SECURITIES
The following is a summary of the general terms of the debt securities. We
will file a prospectus supplement that may contain additional terms when we
issue debt securities. The terms presented here, together with the terms in a
related prospectus supplement, will be a description of the material terms of
the debt securities. You should also read the Indentures described below.
We may issue, from time to time, debt securities, in one or more series,
that will consist of either our senior debt ("Senior Debt Securities"), our
senior subordinated debt ("Senior Subordinated Debt Securities"), our
subordinated debt ("Subordinated Debt Securities") or our junior subordinated
debt ("Junior Subordinated Debt Securities" and, together with the Senior
Subordinated Debt Securities and the Subordinated Debt Securities, the
"Subordinated Securities"). The Senior Debt Securities we offer will be issued
under an Indenture Agreement dated February 1, 1987, between Torchmark and
Morgan Guaranty Trust Company of New York, as the original trustee (the "Senior
Indenture"). The Senior Indenture is incorporated by reference as an exhibit to
the Registration Statement. The First National Bank of Chicago is the successor
trustee under the Senior Indenture and has served in such capacity since August
8, 1994.
The Senior Debt Securities will rank on an equal basis with all other
unsecured debt of Torchmark except any subordinated indebtedness of Torchmark.
In particular, the Senior Debt Securities will rank on an equal basis with our
8 1/4% Senior Debentures Due 2009, our 7 7/8% Notes Due 2023 and our 7 3/8%
Notes due 2013.
The Subordinated Securities we offer will be issued under a separate
indenture between us and The First National Bank of Chicago, acting as trustee
(the "Junior Indenture," and together with the Senior Indenture, the
"Indentures"). We have filed the form of Junior Indenture as an exhibit to the
Registration Statement of which this prospectus is a part. Debt securities,
whether senior, senior subordinated, subordinated or junior subordinated, may
be issued as convertible debt securities or exchangeable debt securities. All
capitalized terms not defined herein have the meanings specified in the
Indentures.
General Terms of The Indentures
The Debt Securities will be unsecured general obligations of the Company.
The Indentures do not limit the amount of debt securities that we may issue.
The Indentures provide that we may issue debt securities up to the principal
amount that we may authorize and may be in any currency or currency unit that
we may designate.
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We may issue the debt securities issued under the Indentures as "discount
securities," which means they may be sold at a discount below their stated
principal amount. These debt securities, as well as other debt securities that
are not issued at a discount, may, for United States federal income tax
purposes, be treated as if they were issued with "original issue discount"
("OID") because of interest payment and other characteristics. Special United
States federal income tax considerations applicable to debt securities issued
with original issue discount will be described in more detail in any applicable
prospectus supplement.
The applicable prospectus supplement for a series of debt securities that we
issue will describe, among other things, the following terms of the offered
debt securities:
. the title;
. the designation, the aggregate principal amount and the authorized
denominations;
. whether issued in fully registered form without coupons or in a form
registered as to principal only with coupons or in bearer form with
coupons;
. whether issued in the form of one or more global securities and whether
all or a portion of the principal amount of the debt securities is
represented thereby;
. the price or prices at which the debt securities will be issued;
. the date or dates on which principal is payable;
. the place or places where and the manner in which principal, premium or
interest will be payable and the place or places where the debt
securities may be presented for transfer and, if applicable, conversion
or exchange;
. interest rates, and the dates from which interest, if any, will accrue,
and the dates when interest is payable and the maturity;
. the right, if any, to extend the interest payment periods and the
duration of the extensions;
. our rights or obligations to redeem or purchase the debt securities;
. conversion or exchange provisions, if any, including conversion or
exchange prices or rates and adjustments thereto;
. the currency or currencies of payment of principal or interest;
. the terms applicable to any debt securities issued at a discount from
their stated principal amount;
. the terms, if any, under which any debt securities will rank junior to
any of our other debt;
. if the amounts of payments of principal or interest are to be determined
by reference to an index or formula, or based on a coin or currency
other than that in which the debt securities are stated to be payable,
the manner in which these amounts are determined and the calculation
agent, if any, with respect to them;
. if other than the entire principal amount of the debt securities when
issued, the portion of the principal amount payable upon acceleration of
maturity as a result of a default on our obligations;
. if applicable, covenants affording holders of debt protection against
changes in our operations, financial condition or transactions involving
us; and
. any other specific terms of any debt securities.
The applicable prospectus supplement will present United States federal
income tax considerations for holders of any debt securities and the securities
exchange or quotation system on which any debt securities are listed or quoted.
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Senior Debt Securities
Payment of the principal of, premium, if any, and interest on Senior Debt
Securities will rank on a parity with all of our other unsecured and
unsubordinated debt.
Senior Subordinated Debt Securities
Payment of the principal of, premium, if any, and interest on Senior
Subordinated Debt Securities will be junior in right of payment to the prior
payment in full of all of our unsubordinated debt, including Senior Debt
Securities. We will state in the applicable prospectus supplement relating to
any Senior Subordinated Debt Securities the subordination terms of the
securities as well as the aggregate amount of outstanding debt, as of the most
recent practicable date, that by its terms would be senior to the Senior
Subordinated Debt Securities. We will also state in such prospectus supplement
limitations, if any, on issuance of additional senior debt.
Subordinated Debt Securities
Payment of the principal of, premium, if any, and interest on Subordinated
Debt Securities will be subordinated and junior in right of payment to the
prior payment in full of all of our senior debt, including our senior
subordinated debt. We will state in the applicable prospectus supplement
relating to any Subordinated Debt Securities the subordination terms of the
securities as well as the aggregate amount of outstanding indebtedness, as of
the most recent practicable date, that by its terms would be senior to the
Subordinated Debt Securities. We will also state in such prospectus supplement
limitations, if any, on issuance of additional senior indebtedness.
Junior Subordinated Debt Securities
Payment of the principal of, premium, if any, and interest on Junior
Subordinated Debt Securities will be subordinated and junior in right of
payment to the prior payment in full of all of our senior, senior subordinated
and subordinated debt. We will state in the applicable prospectus supplement
relating to any Junior Subordinated Debt Securities the subordination terms of
the securities as well as the aggregate amount of outstanding debt, as of the
most recent practicable date, that by its terms would be senior to the Junior
Subordinated Debt Securities. We will also state in such prospectus supplement
limitations, if any, on issuance of additional senior indebtedness.
Conversion or Exchange Rights
Debt securities may be convertible into or exchangeable for shares of our
equity securities. The terms and conditions of conversion or exchange will be
stated in the applicable prospectus supplement. The terms will include, among
others, the following:
. the conversion or exchange price;
. the conversion or exchange period;
. provisions regarding the ability of us or the holder to convert or
exchange the debt securities;
. events requiring adjustment to the conversion or exchange price; and
. provisions affecting conversion or exchange in the event of our
redemption of the debt securities.
Limitations on Liens
We will not, and will not permit any of our subsidiaries to incur any
indebtedness which is secured by an encumbrance of any nature (a "Mortgage") on
the common stock of Liberty National, United American or Globe Life (the
"Designated Subsidiaries"), unless the Senior Debt Securities and, if we so
elect, any other
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indebtedness of ours ranking at least on an equal basis with the Senior Debt
Securities, shall be secured equally and ratably with, or prior to, such other
secured indebtedness. We are not restricted, however, from incurring
indebtedness for money borrowed secured as follows:
(1) Mortgages securing indebtedness owed by a Designated Subsidiary to
another Designated Subsidiary or to Torchmark;
(2) pledges or deposits under workers' compensation or other similar laws
and liens of judgments thereunder that are not currently dischargeable;
(3) good faith deposits in connection with leases to which we or any
Designated Subsidiary is a party;
(4) deposits to secure our public or statutory obligations;
(5) deposits in connection with obtaining or maintain self-insurance or to
obtain the benefits of any law, regulation or arrangement pertaining to
unemployment insurance, old age pensions, social security or similar
matters;
(6) deposits in litigation or other proceedings;
(7) Mortgages created by or resulting from any judgments or awards against
us or the Designated Subsidiaries with respect to which we are in good
faith prosecuting an appeal or other review proceedings, or Mortgages
incurred by us or any Designated Subsidiary for the purpose of
obtaining a stay or discharge in the course of any litigation to which
we are a party; or
(8) Mortgages for taxes or assessments, governmental charges or levies not
yet due or delinquent, or which can be paid thereafter without penalty,
or which are being contested in good faith by appropriate proceedings.
Limitations on Sales of Capital Stock of Certain Subsidiaries
Under the Senior Indenture, we are not permitted to issue, sell, transfer or
dispose of (except to certain of our affiliates) any shares of capital stock of
Liberty National, United American or Globe Life, unless the entire capital
stock of such subsidiary is disposed of for consideration of cash or property,
which, in the opinion of our Board of Directors, is at least equal to the fair
value of such capital stock.
Consolidation, Merger or Sale
We cannot consolidate or merge with or into, or transfer or lease all or
substantially all of our assets to, any person unless (a) we will be the
continuing corporation or (b) the successor corporation or person to which our
assets are transferred or leased is a corporation organized under the laws of
the United States, any state of the United States or the District of Columbia
and it expressly assumes our obligations under the debt securities and the
Indentures. In addition, we cannot complete such a transaction unless
immediately after completing the transaction, no event of default under either
of the Indentures, and no event which, after notice or lapse of time or both,
would become an event of default under either of the Indentures, has happened
and is continuing. When the person to whom our assets are transferred or leased
has assumed our obligations under the debt securities and the Indentures, we
will be discharged from all our obligations under the debt securities and the
Indentures except in limited circumstances.
Events of Default
The term "Event of Default," when used in the Indentures, unless otherwise
indicated, means any of the following:
. failure to pay interest for 30 days after the date payment is due and
payable;
. failure to pay principal or premium, if any, on any debt security when
due, either at maturity, upon any redemption, by declaration or
otherwise;
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. failure to make sinking fund payments after the date payment is due and
payable (and in the case of the Senior Indenture, 10 days after the date
payment is due);
. failure to perform other covenants or breach of a warranty for 60 days
in the case of the Junior Indenture and 90 days in the case of the
Junior Indenture after notice that performance or cure of breach was
required;
. events in bankruptcy, insolvency or reorganization of Torchmark; or
. a default under any other indebtedness of Torchmark if Torchmark fails
to pay a principal amount due in excess of $10,000,000 or if a principal
amount in excess of $10,000,000 is declared due prior to the date it
would have otherwise been due (which, in the case of the Junior
Indenture, continues for 30 days after notice thereof).
If an Event of Default involving any series of debt securities has occurred
and is continuing, the trustee or the holders of not less than 25% in aggregate
principal amount of the debt securities of each affected series may declare the
entire principal of all the debt securities of that series to be due and
payable immediately. If an Event of Default involving bankruptcy, insolvency or
reorganization of Torchmark occurs under the Junior Indenture, then the
principal of all prior subordinated debt securities will be immediately due and
payable.
We will be required to file annually with the trustee a certificate, signed
by an officer of Torchmark, stating whether or not the officer knows of any
default by us in the performance, observance or fulfillment of any condition or
covenant of the Indentures.
Registered Global Securities
We may issue the debt securities of a series in whole or in part in the form
of one or more fully registered global securities. We will deposit any
registered global securities with a depositary or with a nominee for a
depositary identified in the applicable prospectus supplement and registered in
the name of such depositary or nominee. In such case, we will issue one or more
registered global securities denominated in an amount equal to the aggregate
principal amount of all of the debt securities of the series to be issued and
represented by such registered global security or securities.
Unless and until it is exchanged in whole or in part for debt securities in
definitive registered form, a registered global security may not be transferred
except as a whole:
. by the depositary for such registered global security to its nominee;
. by a nominee of the depositary to the depositary or another nominee of
the depositary; or
. by the depositary or its nominee to a successor of the depositary or a
nominee of the successor.
The prospectus supplement relating to a series of debt securities will
describe the specific terms of the depositary arrangement involving any portion
of the series represented by a registered global security. We anticipate that
the following provisions will apply to all depositary arrangements for debt
securities:
. ownership of beneficial interests in a registered global security will
be limited to persons that have accounts with the depositary for such
registered global security, these persons being referred to as
"participants," or persons that may hold interests through participants;
. upon the issuance of a registered global security, the depositary for
the registered global security will credit, on its book-entry
registration and transfer system, the participants' accounts with the
respective principal amounts of the debt securities represented by the
registered global security beneficially owned by the participants;
. any dealers, underwriters, or agents participating in the distribution
of the debt securities will designate the accounts to be credited; and
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. ownership of beneficial interest in such registered global security will
be shown on, and the transfer of such ownership interest will be
effected only through, records maintained by the depositary for such
registered global security for interests of participants, and on the
records of participants for interests of persons holding through
participants.
The laws of some states may require that specified purchasers of securities
take physical delivery of the securities in definitive form. These laws may
limit the ability of those persons to transfer beneficial interests in
registered global securities.
So long as the depositary for a registered global security, or its nominee,
is the registered owner of such registered global security, the depositary or
such nominee, as the case may be, will be considered the sole owner or holder
of the debt securities represented by the registered global security for all
purposes under the indenture. Except as stated below, owners of beneficial
interests in a registered global security:
. will not be entitled to have the debt securities represented by a
registered global security registered in their names;
. will not receive or be entitled to receive physical delivery of the debt
securities in the definitive form; and
. will not be considered the owners or holders of the debt securities
under the Indentures.
Accordingly, each person owning a beneficial interest in a registered global
security must rely on the procedures of the depositary for the registered
global security and, if the person is not a participant, on the procedures of a
participant through which the person owns its interest, to exercise any rights
of a holder under the Indentures.
We understand that under existing industry practices, if we request any
action of holders or if an owner of a beneficial interest in a registered
global security desires to give or take any action that a holder is entitled to
give or take under the indenture, the depositary for the registered global
security would authorize the participants holding the relevant beneficial
interests to give or take the action, and the participants would authorize
beneficial owners owning through the participants to give or take the action or
would otherwise act upon the instructions of beneficial owners holding through
them.
We will make payments of principal and premium, if any, and interest, if
any, on debt securities represented by a registered global security registered
in the name of a depositary or its nominee to the depositary or its nominee, as
the case may be, as the registered owners of the registered global security.
Neither Torchmark, the trustee nor any other agent of Torchmark or the trustee
will be responsible or liable for any aspect of the records relating to, or
payments made on account of, beneficial ownership interests in the registered
global security or for maintaining, supervising or reviewing any records
relating to the beneficial ownership interests.
We expect that the depositary for any debt securities represented by a
registered global security, upon receipt of any payments of principal and
premium, if any, and interest, if any, in respect of the registered global
security, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the
registered global security as shown on the records of the depositary. We also
expect that standing customer instructions and customary practices will govern
payments by participants to owners of beneficial interests in the registered
global security held through the participants, as is now the case with the
securities held for the accounts of customers in bearer form or registered in
"street name." We also expect that any of these payments will be the
responsibility of the participants.
If the depositary for any debt securities represented by a registered global
security is at any time unwilling or unable to continue as depositary or stops
being a clearing agency registered under the Exchange Act, we will appoint an
eligible successor depositary. If we fail to appoint an eligible successor
depositary within 90 days,
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we will issue the debt securities in definitive form in exchange for the
registered global security. In addition, we may at any time and in our sole
discretion decide not to have any of the debt securities of a series
represented by one or more registered global securities. In that event, we will
issue debt securities of the series in a definitive form in exchange for all of
the registered global securities representing the debt securities. The trustee
will register any debt securities issued in definitive form in exchange for a
registered global security in the name or names as the depositary, based upon
instructions from its participants, shall instruct the trustee.
We may also issue bearer debt securities of a series in the form of one or
more global securities, referred to as "bearer global securities." We will
deposit these securities with a common depositary for Euroclear System and
Cedel Bank, societe anonyme, or with a nominee for the depositary identified in
the prospectus supplement relating to the series. The prospectus supplement
relating to a series of debt securities represented by a bearer global security
will describe the applicable terms and procedures. These will include the
specific terms of the depositary arrangement and any specific procedures for
the issuance of debt securities in definitive form in exchange for a bearer
global security, in proportion to the series represented by a bearer global
security.
Discharge, Defeasance and Covenant Defeasance
We can discharge or decrease our obligations under each of the Indentures as
stated below.
We may discharge obligations to holders of any series of debt securities
that have not already been delivered to the trustee for cancellation and that
have either become due and payable or are by their terms to become due and
payable, or are scheduled for redemption, within one year. We may effect a
discharge by irrevocably depositing with the trustee cash or U.S. government
obligations, as trust funds, in an amount certified to be enough to pay when
due, whether at maturity, upon redemption or otherwise, the principal of,
premium, if any, and interest on the debt securities and any mandatory sinking
fund payments.
Unless otherwise provided in the applicable prospectus supplement, we may
also discharge any and all of our obligations to holders of any series of debt
securities at any time ("defeasance"). We may also be released from the
obligations imposed by any covenants of any outstanding series of debt
securities and provisions of the Indentures, and we may omit to comply with
those covenants without creating an event of default under the trust
declaration ("covenant defeasance"). We may effect defeasance and covenant
defeasance only if, among other things:
. we irrevocably deposit with the trustee cash or U.S. government
obligations, as trust funds, in an amount certified to be enough to pay
at maturity, or upon redemption, the principal, premium, if any, and
interest on all outstanding debt securities of the series and any
mandatory sinking fund payments;
. we deliver to the trustee an opinion of counsel from a law firm
qualified to give such opinion to the effect that the holders of the
series of debt securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of the defeasance or
covenant defeasance and that defeasance or covenant defeasance will not
otherwise alter the holders' U.S. federal income tax treatment of
principal, premium, if any, and interest payments on the series of debt
securities; and
. in the case of subordinated debt securities, no event or condition
shall exist that, based on the subordination provisions applicable to
the series, would prevent us from making payments of principal of,
premium, if any, and interest on any of the applicable subordinated
debt securities at the date of the irrevocable deposit referred to
above or at any time during the period ending on the 91st day after the
deposit date or, in the case of covenant defeasance under the Junior
Indenture, on the 61st day after the deposit date.
Although we may discharge or decrease our obligations under the Indentures
as described in the two preceding paragraphs, we may not avoid, among other
things, our duty to register the transfer or exchange of any series of debt
securities, to replace any temporary, mutilated, destroyed, lost or stolen
series of debt securities or to maintain an office or agency in respect of any
series of debt securities.
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Modification of the Indentures
The Indentures provide that we and the trustee may enter into supplemental
indentures without the consent of the holders of debt securities to:
. secure any debt securities;
. evidence the assumption by a successor corporation of our obligations;
. add covenants for the protection of the holders of debt securities;
. add any additional events of default under the Indentures;
. cure any ambiguity or correct any inconsistency in the Indentures;
. change or eliminate provisions of the Senior Indenture, provided such
change or elimination will only become effective after all then current
outstanding debt securities are no longer outstanding;
. establish the forms or terms of debt securities of any series; and
. evidence and provide for the acceptance of appointment by a successor
trustee.
Each of the Indentures also provides that we and the trustee may, with the
consent of the holders of not less than 66 2/3% in aggregate principal amount
of debt securities of all series of Senior Debt Securities or a majority in
aggregate principal amount of debt permitted of all series of Subordinated
Securities, as the case may be, then outstanding and affected, voting as one
class, add any provisions to, or change in any manner, eliminate or modify in
any way the provisions of, the applicable indenture or modify in any manner the
rights of the holders of the debt securities. We and the trustee may not,
however, without the consent of the holder of each outstanding debt security
affected thereby:
. change the stated maturity of any debt security;
. reduce the principal amount or premium, if any, or reduce the rate or
extend the time of payment of interest on any debt security;
. change the currency in which the principal, premium, if any, or
interest is payable;
. reduce the amount of the principal of any debt security issued with an
original issue discount that is payable upon acceleration or provable
in bankruptcy;
. impair the right to institute suit for the enforcement of any payment
on any debt security when due; or
. reduce the percentage of holders of debt securities of any series whose
consent is required for any modification of the Indentures or, waive
compliance with or default under certain provisions of the Indentures.
Concerning the Trustee
The First National Bank of Chicago is the trustee under the both Indentures.
Torchmark may also maintain banking and other commercial relationships with The
First National Bank of Chicago and its affiliates in the ordinary course of
business. The Indentures contain certain limitations on the right of the
trustee, should it become a creditor of Torchmark, to obtain payment of claims
in certain cases, or to realize for its own account on certain property
received in respect of any such claim as security or otherwise. A trustee under
the Indentures will be permitted to engage in certain other transactions;
however, if it acquires any conflicting interest, it must eliminate such
conflict or resign.
Governing Law
The Indentures and the debt securities will be governed by, and construed in
accordance with, the laws of the State of New York.
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DESCRIPTION OF THE TRUST PREFERRED SECURITIES GUARANTEES
The following is a description of the material terms of the trust preferred
securities guarantees. If we plan to issue a trust preferred securities
guarantee in the future that differs from this description, we will file a
prospectus supplement with the additional terms. You should also read the
guarantees. We have filed the form of guarantees with the SEC as an exhibit to
the registration statement of which this prospectus is a part.
General
We will execute a guarantee, which benefits the holders of trust preferred
securities, at the time that a Trust issues those trust preferred securities.
Each guarantee will be qualified as an indenture under the Trust Indenture Act.
Unless otherwise stated in a prospectus supplement, The First National Bank of
Chicago will act as indenture trustee under each guarantee for the purposes of
compliance with the Trust Indenture Act. The trustee will hold each guarantee
for the benefit of the holders of the preferred securities of the applicable
Trust.
We will agree, as described in each guarantee, to pay in full to the holders
of the trust preferred securities issued by the applicable Trust, the Guarantee
Payments, when and as due, regardless of any defense, right of set-off or
counterclaim which the Trust may have or assert. The following payments
("Guarantee Payments"), if not previously paid by a Trust, will be covered by
the applicable guarantee:
. any accumulated and unpaid distributions required to be paid on the
applicable trust preferred securities, if the Trust has funds available
to make the payment;
. the redemption price and all accumulated and unpaid distributions to the
date of redemption, if the Trust has funds available to make the
payment; and
. upon a voluntary or involuntary dissolution, winding up or termination
of the Trust, other than in connection with a distribution of debt
securities to holders of the applicable trust preferred securities or
the redemption of all the trust preferred securities, the lesser of:
(1) the aggregate of the liquidation amount specified in the prospectus
supplement for each trust preferred security plus all accumulated
and unpaid distributions on the trust preferred securities to the
date of payment, if the Trust has funds available to make the
payment; and
(2) the amount of assets of the Trust remaining available for
distribution to holders of its trust preferred securities upon a
dissolution and termination of the Trust.
Our obligation to make a Guarantee Payment may be satisfied by directly
paying the required amounts to the holders of the trust preferred securities or
by causing the Trust to pay the amounts to the holders.
No single document executed by us relating to the issuance of trust
preferred securities will provide for a full, irrevocable and unconditional
guarantee of the trust preferred securities. It is only the combined operation
of our obligations under any indenture and the applicable guarantee and trust
declaration that has the effect of providing a full, irrevocable and
unconditional guarantee of a Trust's obligations under its trust preferred
securities.
Status of The Trust Preferred Securities Guarantees
Each guarantee will constitute an unsecured obligation of Torchmark and will
rank:
. subordinate and junior in right of payment to all of our other
liabilities, except those obligations made equal or junior to our
obligations under a guarantee;
. equal with the most senior preferred or preference stock now or
hereafter issued by us, and with any guarantee now or hereafter issued
by us in respect of any preferred or preference stock of any of our
affiliates; and
. senior to our common stock.
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Each trust declaration will require that the holder of trust preferred
securities accept the subordination provisions and other terms of the
guarantee. Each guarantee will constitute a guarantee of payment and not of
collection. In other words, the holder of the guaranteed security may sue us,
or seek other remedies, to enforce its rights under the guarantee without first
suing any other person or entity.
Termination of the Trust Preferred Securities Guarantee
A guarantee will terminate upon the earlier of:
. the full payment of the redemption price of the trust preferred
securities and all accumulated and unpaid distributions with respect
thereto;
. the distribution of the underlying securities to the holders of trust
preferred securities upon any conversion or exchange of the holder's
trust preferred securities into the designated securities, if
applicable;
. the distribution to the applicable holders of trust preferred securities
of the corresponding series of debt securities under the appropriate
trust declaration; or
. the full payment of the amounts payable under the appropriate trust
declaration upon liquidation of the Trust.
Each guarantee will continue to be effective or will be reinstated if at any
time any holder of trust preferred securities issued by the applicable Trust
must restore payment of any sums paid under such trust preferred securities or
such guarantee.
Amendments and Assignment
Changes to the guarantee that do not adversely affect the rights of holders
of trust preferred securities may be made without the consent of those holders.
Otherwise, a guarantee may only be amended with the prior approval of the
holders of at least a majority in aggregate liquidation amount of the
outstanding trust preferred securities. A description of the way to obtain any
approval is described under "Description of the Trust Preferred Securities--
Voting Rights; Amendment of Declarations." All guarantees and agreements
contained in the guarantee will be binding on our successors, assigns,
receivers, trustees and representatives and are for the benefit of the holders
of the applicable trust preferred securities.
Trust Preferred Securities Guarantee Events of Default
An event of default under a guarantee occurs if:
. we fail to make any of our required payments or perform our obligations
under the guarantee; or
. we fail to deliver the designated securities upon an appropriate
election by the holder of related trust preferred securities to convert
or exchange the trust preferred securities into the designated
securities, if applicable.
The holders of at least a majority in aggregate liquidation amount of the
trust preferred securities relating to each guarantee, will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee relating to that guarantee or to direct the exercise
of any Trust or power given to the trustee under the guarantee.
Information Concerning the Trust Preferred Guarantee Trustee
The trustee under a guarantee, will only perform the duties that are
specifically described in the guarantee. The trustee will not be liable for any
action taken or omitted in good faith and reasonably believed by it to be
authorized or within its discretion under the guarantee. A trustee is under no
obligation to exercise any of its powers as described in the applicable
guarantee at the request of any holder of covered trust preferred securities
unless it is offered reasonable security and indemnity against the costs,
expenses and liabilities that it might incur.
30
<PAGE>
Miscellaneous
Torchmark will pay all fees and expenses related to:
. the offering of the trust preferred securities and the junior
subordinated debentures;
. the organization, maintenance and dissolution of the Trusts;
. the retention of the trustees; and
. the enforcement by the property trustee of the rights of the holders of
the trust preferred securities.
Governing Law
The guarantees will be governed by and construed in accordance with the
laws of the State of New York.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE TRUST PREFERRED
SECURITIES GUARANTEE AND THE DEBT SECURITIES HELD BY EACH TRUST
We will guarantee payments of distributions and redemption and liquidation
payments due on each series of the trust preferred securities, if the
applicable Trust has funds available for the payments, as described under
"Description of the Trust Preferred Securities Guarantees." No single document
executed by us in connection with the issuance of any series of the trust
preferred securities will provide for a full, irrevocable and unconditional
guarantee of any trust preferred securities. It is only the combined operation
of our obligations under the applicable guarantee, trust declaration and the
indenture that has the effect of providing a full, irrevocable and
unconditional guarantee of the Trust's obligations under its trust preferred
securities.
As long as we make payments of interest and other payments when due on the
debt securities held by a Trust, those payments will be sufficient to cover
the payment of distributions and redemption and liquidation payments due on
the trust preferred securities issued by that Trust, primarily because:
. the aggregate principal amount of the debt securities will be equal
to the sum of the aggregate liquidation amount of the trust preferred
and trust common securities;
. the interest rate and interest and other payment dates on the debt
securities will match the distribution rate and distribution and
other payment dates for the trust preferred securities;
. we will pay for any and all costs, expenses and liabilities of each
Trust, except such Trust's obligations under its trust preferred
securities; and
. each trust declaration provides that the related Trust will not
engage in any activity that is not consistent with the limited
purposes of the Trust.
If we do not make payments on the debt securities, the applicable Trust
will not have funds available to make payments of distributions or other
amounts due on its trust preferred securities. In those circumstances, you
will not be able to rely upon the guarantee for payment of these amounts.
Instead, you may directly sue us or seek other remedies to collect your
proportionate share of payments owed. If you sue us to collect payment, then
we will assume your rights as a holder of trust preferred securities under the
Trust's trust declaration if we make a payment to you in any legal action.
A holder of any trust preferred security may sue us, or seek other
remedies, to enforce its rights under the guarantee without first suing the
applicable trustee, the Trust that issued the trust preferred security or any
other person or entity.
31
<PAGE>
PLAN OF DISTRIBUTION
Torchmark may sell preferred stock, depositary shares or any series of debt
securities and a Trust may sell trust preferred securities in one or more of
the following ways from time to time:
. to underwriters or dealers for resale to the public or to institutional
investors;
. directly to institutional investors; or
. through agents to the public or to institutional investors.
The prospectus supplements will state the terms of the offering of the
securities, including:
. the name or names of any underwriters or agents;
. the purchase price of the securities;
. the proceeds to Torchmark or the applicable Trust, as the case may be,
from the sale;
. any underwriting discounts or agency fees and other items constituting
underwriters' or agents' compensation;
. any initial public offering price;
. any discounts or concessions allowed or reallowed or paid to dealers;
and
. any securities exchanges on which such securities may be listed.
If underwriters are used in the sale, the underwriters will acquire the
securities for their own account and may resell them from time to time in one
or more transactions, including negotiated transactions, at a fixed public
offering price or at varying prices determined at the time of sale.
If a dealer is used in the sale, we and/or a Trust, as the case may be, will
sell such securities to the dealer, as principal. The dealer may then resell
the securities to the public at varying prices to be determined by the dealer
at the time for resale.
Unless otherwise set forth in a prospectus supplement, there will be
conditions to the underwriters' obligations to purchase any series of
securities, and the underwriters will be obligated to purchase all of a series
of securities, if any are purchased.
Underwriters and agents may be entitled under agreements entered into with
us and/or a Trust to indemnification by us and/or a Trust against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
concerning payments that the underwriters or agents may be required to make in
respect thereof. Underwriters and agents may be customers of, engage in
transactions with, or perform services for us and our affiliates in the
ordinary course of business.
Each of the securities issued hereunder will be a new issue of securities
and will have no prior trading market. Any underwriters to whom Torchmark or a
Trust sells securities for public offering and sale may make a market in the
securities, but no underwriter will be obligated to do so and may discontinue
any market making at any time without notice. The securities may or may not be
listed on a national securities exchange.
LEGAL OPINIONS
The validity of the securities being offered hereby is being passed upon for
Torchmark and each Trust by Maynard, Cooper & Gale, P.C., Birmingham, Alabama,
and with respect to certain matters of Delaware law relating to the validity of
the trust preferred securities, by Morris, Nichols, Arsht & Tunnell,
Wilmington, Delaware, special Delaware counsel to Torchmark and each Trust. If
any of the securities are issued in an underwritten offering, it is expected
that Davis Polk & Wardwell, New York, New York, will pass on certain legal
matters for the underwriters.
32
<PAGE>
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference from Torchmark's Annual Report on Form 10-K for the year ended
December 31, 1998, have been audited by KPMG Peat Marwick LLP, independent
auditors, as stated in their report incorporated in this prospectus by
reference, and have been so incorporated in reliance upon the report of such
firm given upon their authority as experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements, and other information with the SEC. You
can read and copy these reports, proxy statements, and other information
concerning Torchmark at the SEC's Public Reference Room at 450 Fifth Street,
N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the Public Reference Room. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers that file electronically with the SEC,
including Torchmark. Our common stock is listed on the New York Stock Exchange
and the International Stock Exchange in London, England. These reports, proxy
statements and other information are also available for inspection at the
offices of the National Association of Securities Dealers, Inc., Report
Section, 1735 K Street N.W., Washington, D.C. 20006.
This prospectus is part of a registration statement that we and the Trusts
filed with the SEC. You can obtain the full registration statement from the SEC
as indicated above, or from us.
The SEC allows us to "incorporate by reference" the information we file with
the SEC. This permits us to disclose important information to you by referring
to these filed documents. Any information referred to in this way is considered
part of this prospectus, and any information that we file with the SEC after
the date of this prospectus will automatically be deemed to update and
supersede this information. We incorporate by reference the following documents
that have been filed with the SEC:
. Annual Report on Form 10-K for the year ended December 31, 1998;
. Quarterly Report on Form 10-Q for the quarter ended March 31, 1999;
. Quarterly Report on Form 10-Q/A for the quarter ended March 31, 1999;
and
. Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
We also incorporate by reference any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
we file a post-effective amendment that indicates the termination of the
offering of the securities made by this prospectus.
We will provide without charge upon written or oral request a copy of any or
all of the documents that are incorporated by reference into this prospectus,
other than exhibits which are specifically incorporated by reference into such
documents. Requests should be directed to Investor Relations Department,
Torchmark Corporation, 2001 Third Avenue South, 16th Floor, Birmingham, Alabama
35233 (telephone (205) 325-4200).
There are no separate financial statements of the Trusts in this prospectus.
We do not believe such financial statements would be helpful because:
. The Trusts are subsidiaries of Torchmark, which files consolidated
financial information under the Exchange Act;
. The Trusts do not have any independent operations other than issuing
the preferred and common securities and purchasing our debt securities;
. The Trusts' only material assets will be our debt securities when
issued; and
. The combined obligations of Torchmark under the debt securities, the
Trust Preferred Securities Guarantees, the Declarations and the
Indenture have the effect of providing a full, irrevocable and
unconditional guarantee of the Trusts' obligations under their trust
preferred securities. See "Description of Debt Securities,"
"Description of the Trust Preferred Securities Guarantees" and
"Relationship Among the Trust Preferred Securities, the Trust Preferred
Securities Guarantee and the Debt Securities Held by Each Trust."
33
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth expenses in connection with the issuance and
distribution of the securities being registered. All amounts shown are
estimated, except the SEC Registration Fee.
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee............. $ 83,400
Fees and Expenses of Trustees................................... $ 12,000
Rating Agency Fees.............................................. $200,000
Accounting Fees and Expenses.................................... $ 30,000
Legal Fees and Expenses......................................... $150,000
Printing Expenses............................................... $ 80,000
Miscellaneous................................................... $ 25,000
--------
Total.......................................................... $580,400
========
</TABLE>
Item 15. Indemnification of Directors and Officers.
Section 1 of Article Ninth of the Restated Certificate of Incorporation of
Torchmark provides that a director will not be personally liable to Torchmark
or its stockholders for monetary damages for breach of fiduciary duty as a
director except for liability (a) for any breach of the duty of loyalty to
Torchmark or its stockholders, (b) for acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (c) for
paying a distribution or approving a stock repurchase in violation of the
Delaware General Corporation Law (the "Act"), or (d) for any transaction from
which the director derived an improper personal benefit.
Section 2(a) of Article Ninth provides that each person who was or is made a
party or is threatened to be made a party to, or is involved in, specific
actions, suits or proceedings by reason of the fact that he or she is or was a
director or officer of Torchmark (or is or was serving at the request of
Torchmark as a director, officer, employee or agent for another entity) while
serving in such capacity will be indemnified and held harmless by Torchmark, to
the full extent authorized by the Act, as in effect (or, to the extent
indemnification is broadened, as it may be amended) against all expense,
liability or loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid or to be paid in settlement) reasonably
incurred by such person in connection therewith. With respect to derivative
actions, indemnification only extends to expenses (including attorneys' fees)
incurred in connection with defense or settlement of such an action and the Act
requires court approval before there can be any indemnification where the
person seeking indemnification has been found liable to Torchmark. Rights
conferred hereby are contract rights and include the right to be paid by
Torchmark the expenses incurred in defending the proceedings specified above,
in advance of their final disposition; provided that, if the Act so requires,
such payment will only be made upon delivery to Torchmark by the indemnified
party of an undertaking to repay all amounts advanced if it is ultimately
determined that the person receiving such payments is not entitled to be
indemnified under such Section 2(a) or otherwise. Torchmark may, by action of
its Board of Directors, provide indemnification to its employees and agents
with the same scope and effect as the foregoing indemnification of directors
and officers.
Section 2(b) of Article Ninth provides that persons indemnified under
Section 2(a) may bring suit against Torchmark to recover unpaid amounts claimed
thereunder, and that if such suit is successful, the expense of bringing such
suit will be reimbursed by Torchmark. While it is a defense to such a suit that
the person claiming indemnification has not met the applicable standards of
conduct making indemnification permissible under the Act, the burden of proving
the defense is on Torchmark and neither the failure of Torchmark's Board of
Directors, independent legal counsel or the shareholders to have made a
determination that indemnification is
II-1
<PAGE>
proper, nor an actual determination that the claimant has not met the
applicable standard of conduct, is a defense to the action or creates a
presumption that the claimant has not met the applicable standard of conduct.
The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition conferred in
paragraphs 2(a) and 2(b) of Article Ninth is not exclusive of any other right
which any person may have or acquire under any statute, provision of the
Certificate of Incorporation by ByLaws, or otherwise. Torchmark may maintain
insurance, at its expense to protect itself and any directors, officers,
employees or agents of Torchmark or other entity against any expense, liability
or loss, whether or not Torchmark would have the power to indemnify such
persons against such expense, liability or loss under the Act.
Item 16. Exhibits.
1.1 Form of Underwriting Agreement*
4.1 Certificate of Trust of Torchmark Capital Trust I**
4.2 Certificate of Trust of Torchmark Capital Trust II**
4.3 Declaration of Trust of Torchmark Capital Trust I**
4.4 Declaration of Trust of Torchmark Capital Trust II**
4.5 Indenture Agreement dated February 1, 1987 between Torchmark and
Morgan Guaranty Trust Company of New York (as amended to appoint The
First National Bank of Chicago as successor trustee) (Incorporated by
reference from Exhibit 4(b) to Form S-3 of Torchmark Corporation
(Registration No. 33-11716))
4.6 Form of Amended and Restated Declaration of Trust of Torchmark
Capital Trust I and II
4.7 Form of Junior Subordinated Indenture
4.8 Form of Trust Preferred Security (included in Exhibit 4.6)
4.9 Form of Preferred Securities Guarantee Agreement with respect to
Trust Preferred Securities to be issued by Torchmark Capital Trust I
and II
4.10 Form of Deposit Agreement
4.11 Form of Depositary Share (included in Exhibit 4.10)
5.1 Opinion of Maynard, Cooper & Gale, P.C. as to the validity of the
Preferred Stock, Debt Securities and Trust Preferred Securities
Guarantee
5.2 Opinion of Morris, Nichols, Arsht & Tunnell as to the validity of the
Trust Preferred Securities
8.1 Federal Income Tax Opinion of Maynard, Cooper & Gale, P.C.*
12.1 Statement re: Computation of Ratio of Earnings to Fixed Charges and
of Earnings to Combined Fixed Charges and Preferred Stock Dividends
of Torchmark**
23.1 Consent of KPMG Peat Marwick LLP, Independent Auditors
23.2 Consent of Maynard, Cooper & Gale, P.C. (included in Exhibits 5.1 and
8.1)
23.3 Consent of Morris, Nichols, Arsht & Tunnell (included in Exhibit 5.2)
24.1 Powers of Attorney for certain officers and directors of Torchmark**
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 (Torchmark)**
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 Indenture (Torchmark Capital Trust I)**
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
under the Indenture (Torchmark Capital Trust II)**
*To be filed by amendment
**Previously filed
II-2
<PAGE>
Item 17. Undertakings.
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, as amended (the "Securities Act";
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percentage 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 (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3 or Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrants pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof;
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrants hereby undertake:
(a) That, for purposes of determining any liability under the Securities
Act, each filing of Torchmark's annual report pursuant to Section 13(a) or
Section 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act), that is incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities offered
herein and the offering of such securities at the time shall be deemed to be
the initial bona fide offering hereof.
(b) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of any of
the registrants pursuant to the provisions referred to in Item 15 of this
registration statement, or otherwise, each of the registrants has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by one of the registrants of
expenses incurred or paid by a director, officer or controlling registrant of
expenses incurred or paid by a director, officer or controlling person of one
of the registrants in the successful defense of any action, suit or proceeding)
is asserted by such director, officer or controlling person in connection with
the securities being registered hereby, each of the registrants 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
Securities Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
The undersigned registrants undertake that:
(1) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in the form of
prospectus filed by the registrants 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.
(2) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering hereof.
The undersigned registrants hereby undertake to file 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 in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Torchmark hereby
certifies that it has reasonable grounds to believe 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 Birmingham, State of Alabama, on the 17th day of
September, 1999.
Torchmark Corporation
/s/ C. B. Hudson
By: _________________________________
C. B. Hudson
Chairman, President and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ C. B. Hudson Chairman, President, Chief September 17, 1999
______________________________________ Executive, Officer, and
C. B. Hudson Director
* Vice President and Chief September 17, 1999
______________________________________ Accounting Officer
Gary L. Coleman (Principal Financial and
Accounting Officer)
* Director September 17, 1999
______________________________________
David L. Boren
* Director September 17, 1999
______________________________________
Joseph M. Farley
* Director September 17, 1999
______________________________________
Louis T. Hagopian
* Director September 17, 1999
______________________________________
Joseph L. Lanier, Jr.
* Director September 17, 1999
______________________________________
Mark S. McAndrew
* Director September 17, 1999
______________________________________
Harold T. McCormick
* Director September 17, 1999
______________________________________
George J. Records
* Director September 17, 1999
______________________________________
</TABLE> R.K. Richey
/s/ Larry M. Hutchison
*By: ____________________________
Larry M. Hutchison
Attorney-in-fact
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Torchmark
Capital Trust I certifies that it is 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 Birmingham, State of Alabama, on September 17,
1999.
Torchmark Corporation Trust I
/s/ Larry M. Hutchison
By: ____________________________
Name: Larry M. Hutchison
Title: Regular Trustee
/s/ Gary L. Coleman
By: ____________________________
Name: Gary L. Coleman
Title: Regular Trustee
Pursuant to the requirements of the Securities Act of 1933, Torchmark
Capital Trust II certifies that it has reasonable grounds to believe that it
meets all of the requirements for the 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 Birmingham, State of Alabama, on
September 17, 1999.
Torchmark Capital Trust II
/s/ Larry M. Hutchison
By: ____________________________
Name: Larry M. Hutchison
Title: Regular Trustee
/s/ Gary L. Coleman
By: ____________________________
Name: Gary L. Coleman
Title: Regular Trustee
II-6
<PAGE>
EXHIBIT 4.1
CERTIFICATE OF TRUST
OF
TORCHMARK CAPITAL TRUST I
This Certificate of Trust is being duly executed as of July 21, 1999
for the purpose of organizing a business trust pursuant to the Delaware Business
Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the "Act").
---- -- -- ---
The undersigned hereby certify as follows:
1. Name. The name of the business trust is Torchmark Capital Trust
----
I (the "Trust").
2. Delaware Trustee. The name and business address of the Delaware
----------------
resident trustee of the Trust meeting the requirements of Section 3807 of the
Act are as follows:
Bank One Delaware, Inc.
Three Christiana Center
201 North Walnut Street
Wilmington, Delaware 19801
3. Effective. This Certificate of Trust shall be effective
---------
immediately upon filing in the Office of the Secretary of State of the State of
Delaware.
4. Counterparts. This Certificate of Trust may be executed in one
------------
or more counterparts.
-1-
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
---------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Michael Klyce
---------------------------
Michael Klyce, as Trustee
/s/ Larry Hutchison
---------------------------
Larry Hutchison, as Trustee
/s/ Gary Coleman
---------------------------
Gary Coleman, as Trustee
-2-
<PAGE>
EXHIBIT 4.2
CERTIFICATE OF TRUST
OF
TORCHMARK CAPITAL TRUST II
This Certificate of Trust is being duly executed as of July 21, 1999
for the purpose of organizing a business trust pursuant to the Delaware Business
Trust Act, 12 Del. C. (S)(S) 3801 et seq. (the "Act").
---- -- -- ---
The undersigned hereby certify as follows:
1. Name. The name of the business trust is Torchmark Capital Trust
----
II (the "Trust").
2. Delaware Trustee. The name and business address of the Delaware
----------------
resident trustee of the Trust meeting the requirements of Section 3807 of the
Act are as follows:
Bank One Delaware, Inc.
Three Christiana Center
201 North Walnut Street
Wilmington, Delaware 19801
3. Effective. This Certificate of Trust shall be effective
---------
immediately upon filing in the Office of the Secretary of State of the State of
Delaware.
4. Counterparts. This Certificate of Trust may be executed in one
------------
or more counterparts.
-1-
<PAGE>
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
---------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Michael Klyce
----------------------------
Michael Klyce, as Trustee
/s/ Larry Hutchison
----------------------------
Larry Hutchison, as Trustee
/s/ Gary Coleman
----------------------------
Gary Coleman, as Trustee
-2-
<PAGE>
EXHIBIT 4.3
DECLARATION OF TRUST
--------------------
DECLARATION OF TRUST, dated as of July 21, 1999, between Torchmark
Corporation, a Delaware corporation, as Sponsor, Bank One Delaware, Inc., a
Delaware corporation, as Delaware Trustee, and Michael Klyce, Larry
Hutchinson and Gary Coleman, as Regular Trustees (collectively with the Delaware
Trustee, the "Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as
"Torchmark Capital Trust I", in which name the Trustees, or the Sponsor to the
extent provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to
the Trust the sum of $10. The Trustees hereby acknowledge receipt of such
amount from the Sponsor, which amount shall constitute the initial
trust estate. The Trustees hereby declare that they will hold the trust estate
for the Sponsor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. (S)(S) 3801 et seq. (the "Business Trust Act"),
---- -- -- ----
and that this document constitute the governing instrument of the Trust. The
Trustees are hereby authorized and directed to execute and file a certificate of
trust in the office of the Secretary of State of the State of Delaware in the
form attached hereto. The Trust is hereby established by the Sponsor and the
Trustees for the purposes of (i) issuing preferred securities ("Preferred
Securities") representing undivided beneficial interests in the assets of the
Trust in exchange for cash and investing the proceeds thereof in debt securities
of the Sponsor, (ii) issuing and selling common securities ("Common Securities"
and, together with the Preferred Securities, "Trust Securities") representing
undivided beneficial interests in the assets of the Trust to the Sponsor in
exchange for cash and investing the proceeds thereof in additional debt
securities of the Sponsor and (iii) engaging in such other activities as are
necessary, convenient or incidental thereto.
3. Concurrent with the first issuance of any Trust Securities
by the Trust, the Sponsor and the Trustees intend to enter into an amended and
restated Declaration of Trust, satisfactory to each such party and substantially
in the form to be included as an exhibit to the 1933 Act Registration Statement
referred to below at the time such registration statement becomes effective
under the Securities Act of 1933, as amended (the "Securities Act"), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities and the Common Securities referred to therein. Prior to
the execution and delivery of such amended and restated Declaration of Trust,
the Trustees shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law or as may be
necessary to obtain, prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise.
-1-
<PAGE>
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, as applicable, (i) to prepare and file
with the Securities and Exchange Commission (the "Commission") and execute, in
each case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such Registration Statement, relating to the
registration of the Preferred Securities under the Securities Act and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including any pre-effective or post-effective amendments thereto) relating to
the registration of the Preferred Securities under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to prepare and file with the
New York Stock Exchange and execute a listing application and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on the New York Stock Exchange; (iii) to prepare and file and execute, in each
case on behalf of the Trust, such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or "blue sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable; and (iv) to negotiate the terms of, and execute on behalf of the
Trust, an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities, substantially
in the form to be included as an exhibit to, or incorporated by reference in,
the 1933 Act Registration Statement. It is hereby acknowledged and agreed that
in connection with any execution, filing or document referred to in clauses (i)-
(iii) above, (A) any Regular Trustee (or his attorneys-in-fact and agents or the
Sponsor as permitted herein) is authorized on behalf of the Trust to file and
execute such document on behalf of the Trust and (B) the Delaware Trustee shall
not be required to join in any such filing or execute on behalf of the Trust any
such document unless required by the rules and regulations of the Commission or
the New York Stock Exchange or state securities or blue sky laws, and in such
case only to the extent so required. In connection with all of the foregoing,
the Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Michael Klyce, Larry Hutchinson and Gary
Coleman, and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file (i)
the 1933 Act Registration Statement and the 1934 Act Registration Statement and
any and all amendments (including post-effective amendments) or supplements
thereto, with all exhibits thereto, and other documents in connection therewith,
and (ii) a registration statement and any and all amendments thereto filed
pursuant to Rule 462(b) under the Securities Act with the Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
-2-
<PAGE>
6. The number of Trustees initially shall be four (4) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than four (4); and provided, further, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity that has its principal place of business in the State of Delaware and
meets any other requirements imposed by applicable law. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time. Any Trustee may resign upon thirty days prior notice to the
Sponsor; provided, however, that the Delaware Trustee may resign immediately
upon notice to the Sponsor if the Delaware Trustee is required to join in any
filing or execute on behalf of the Trust any document pursuant to the provisions
of paragraph 4 hereof and, upon giving such notice, the Delaware Trustee shall
not be required to join in any such filing or execute on behalf of the Trust any
such document; provided, further, however, that no resignation of 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.
7. To the fullest extent permitted by applicable law, the Sponsor
agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the Delaware
Trustee, and (iii) any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Delaware
Trustee (each of the persons or entities in (i) through (iii) being referred to
as an "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 paragraph 7 shall survive the termination of
this Declaration. The Delaware Trustee shall not have any of the powers or
duties set forth herein, except as required under the Business Trust Act. The
Delaware Trustee shall be a trustee hereunder for the sole and limited purpose
of fulfilling the requirements of Section 3807(a) of the Business Trust Act.
8. The Trust may terminate without issuing any Trust Securities at
the election of the Sponsor.
9. This Declaration shall be governed by the laws of the State of
Delaware, without regard to conflict of laws principles.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
TORCHMARK CORPORATION, as Sponsor
By: /s/ Michael J. Klyce
-----------------------------------
Name: Michael J. Klyce
Title: Vice President and Treasurer
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
-----------------------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Michael Klyce
-----------------------------------
Michael Klyce, as Trustee
Larry Hutchison
-----------------------------------
Larry Hutchison, as Trustee
/s/ Gary Coleman
-----------------------------------
Gary Coleman, as Trustee
-4-
<PAGE>
EXHIBIT 4.4
DECLARATION OF TRUST
--------------------
DECLARATION OF TRUST, dated as of July 21, 1999, between Torchmark
Corporation, a Delaware corporation, as Sponsor, Bank One Delaware, Inc., a
Delaware corporation, as Delaware Trustee, and Michael Klyce, Larry Hutchinson
and Gary Coleman, as Regular Trustees (collectively with the Delaware Trustee,
the "Trustees"). The Sponsor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be known as "Torchmark
Capital Trust II", in which name the Trustees, or the Sponsor to the extent
provided herein, may conduct the business of the Trust, make and execute
contracts, and sue and be sued.
2. The Sponsor hereby assigns, transfers, conveys and sets over to the
Trust the sum of $10. The Trustees hereby acknowledge receipt of such amount
from the Sponsor, which amount shall constitute the initial trust estate. The
Trustees hereby declare that they will hold the trust estate for the Sponsor. It
is the intention of the parties hereto that the Trust created hereby constitute
a business trust under Chapter 38 of Title 12 of the Delaware Code, 12 Del. C.
---- --
(S)(S) 3801 et seq. (the "Business Trust Act"), and that this document
-- ----
constitute the governing instrument of the Trust. The Trustees are hereby
authorized and directed to execute and file a certificate of trust in the office
of the Secretary of State of the State of Delaware in the form attached hereto.
The Trust is hereby established by the Sponsor and the Trustees for the purposes
of (i) issuing preferred securities ("Preferred Securities") representing
undivided beneficial interests in the assets of the Trust in exchange for cash
and investing the proceeds thereof in debt securities of the Sponsor, (ii)
issuing and selling common securities ("Common Securities" and, together with
the Preferred Securities, "Trust Securities") representing undivided beneficial
interests in the assets of the Trust to the Sponsor in exchange for cash and
investing the proceeds thereof in additional debt securities of the Sponsor and
(iii) engaging in such other activities as are necessary, convenient or
incidental thereto.
3. Concurrent with the first issuance of any Trust Securities by the
Trust, the Sponsor and the Trustees intend to enter into an amended and restated
Declaration of Trust, satisfactory to each such party and substantially in the
form to be included as an exhibit to the 1933 Act Registration Statement
referred to below at the time such registration statement becomes effective
under the Securities Act of 1933, as amended (the "Securities Act"), to provide
for the contemplated operation of the Trust created hereby and the issuance of
the Preferred Securities and the Common Securities referred to therein. Prior to
the execution and delivery of such amended and restated Declaration of Trust,
the Trustees shall not have any duty or obligation hereunder or with respect to
the trust estate, except as otherwise required by applicable law or as may be
necessary to obtain, prior to such execution and delivery, any licenses,
consents or approvals required by applicable law or otherwise.
-1-
<PAGE>
4. The Sponsor and the Trustees hereby authorize and direct the
Sponsor, as the sponsor of the Trust, as applicable, (i) to prepare and file
with the Securities and Exchange Commission (the "Commission") and execute, in
each case on behalf of the Trust, (a) a Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such Registration Statement, relating to the
registration of the Preferred Securities under the Securities Act and (b) a
Registration Statement on Form 8-A (the "1934 Act Registration Statement")
(including any pre-effective or post-effective amendments thereto) relating to
the registration of the Preferred Securities under Section 12(b) of the
Securities Exchange Act of 1934, as amended; (ii) to prepare and file with the
New York Stock Exchange and execute a listing application and all other
applications, statements, certificates, agreements and other instruments as
shall be necessary or desirable to cause the Preferred Securities to be listed
on the New York Stock Exchange; (iii) to prepare and file and execute, in each
case on behalf of the Trust, such applications, reports, surety bonds,
irrevocable consents, appointments of attorney for service of process and other
papers and documents as shall be necessary or desirable to register the
Preferred Securities under the securities or "blue sky" laws of such
jurisdictions as the Sponsor, on behalf of the Trust, may deem necessary or
desirable; and (iv) to negotiate the terms of, and execute on behalf of the
Trust, an underwriting agreement among the Trust, the Sponsor and any
underwriter, dealer or agent relating to the Preferred Securities, substantially
in the form to be included as an exhibit to, or incorporated by reference in,
the 1933 Act Registration Statement. It is hereby acknowledged and agreed that
in connection with any execution, filing or document referred to in clauses (i)-
(iii) above, (A) any Regular Trustee (or his attorneys-in-fact and agents or the
Sponsor as permitted herein) is authorized on behalf of the Trust to file and
execute such document on behalf of the Trust and (B) the Delaware Trustee shall
not be required to join in any such filing or execute on behalf of the Trust any
such document unless required by the rules and regulations of the Commission or
the New York Stock Exchange or state securities or blue sky laws, and in such
case only to the extent so required. In connection with all of the foregoing,
the Sponsor and each Regular Trustee, solely in its capacity as Trustee of the
Trust, hereby constitutes and appoints Michael Klyce, Larry Hutchinson and Gary
Coleman, and each of them, his, her or its, as the case may be, true and lawful
attorneys-in-fact, and agents, with full power of substitution and
resubstitution, for the Sponsor or such Trustee and in the Sponsor's or such
Trustee's name, place and stead, in any and all capacities, to sign and file (i)
the 1933 Act Registration Statement and the 1934 Act Registration Statement and
any and all amendments (including post-effective amendments) or supplements
thereto, with all exhibits thereto, and other documents in connection therewith,
and (ii) a registration statement and any and all amendments thereto filed
pursuant to Rule 462(b) under the Securities Act with the Commission, granting
unto said attorneys-in-fact and agents full power and authority to do and
perform each and every act and thing and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as the Sponsor or such Trustee might or
could do in person, hereby ratifying and confirming all that said attorneys-in-
fact and agents or any of them, or their or his or her substitute or
substitutes, shall do or cause to be done by virtue hereof.
5. This Declaration of Trust may be executed in one or more
counterparts.
-2-
<PAGE>
6. The number of Trustees initially shall be four (4) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Sponsor which may increase or decrease the
number of Trustees; provided, however, that the number of Trustees shall in no
event be less than four (4); and provided, further, however, that to the extent
required by the Business Trust Act, one Trustee shall either be a natural person
who is a resident of the State of Delaware or, if not a natural person, an
entity that has its principal place of business in the State of Delaware and
meets any other requirements imposed by applicable law. Subject to the
foregoing, the Sponsor is entitled to appoint or remove without cause any
Trustee at any time. Any Trustee may resign upon thirty days prior notice to the
Sponsor; provided, however, that the Delaware Trustee may resign immediately
upon notice to the Sponsor if the Delaware Trustee is required to join in any
filing or execute on behalf of the Trust any document pursuant to the provisions
of paragraph 4 hereof and, upon giving such notice, the Delaware Trustee shall
not be required to join in any such filing or execute on behalf of the Trust any
such document; provided, further, however, that no resignation of 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.
7. To the fullest extent permitted by applicable law, the Sponsor
agrees to indemnify (i) the Delaware Trustee, (ii) any affiliate of the Delaware
Trustee, and (iii) any officers, directors, shareholders, members, partners,
employees, representatives, nominees, custodians or agents of the Delaware
Trustee (each of the persons or entities in (i) through (iii) being referred to
as an "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 paragraph 7 shall survive the termination of
this Declaration. The Delaware Trustee shall not have any of the powers or
duties set forth herein, except as required under the Business Trust Act. The
Delaware Trustee shall be a trustee hereunder for the sole and limited purpose
of fulfilling the requirements of Section 3807(a) of the Business Trust Act.
8. The Trust may terminate without issuing any Trust Securities at
the election of the Sponsor.
9. This Declaration shall be governed by the laws of the State of
Delaware, without regard to conflict of laws principles.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Declaration of
Trust to be duly executed as of the day and year first above written.
TORCHMARK CORPORATION, as Sponsor
By: /s/ Michael J. Klyce
--------------------
Name: Michael J. Klyce
Title: Vice President and Treasurer
BANK ONE DELAWARE, INC.,
as Delaware Trustee
By: /s/ Sandra L. Caruba
--------------------
Name: Sandra L. Caruba
Title: Vice President
/s/ Michael Klyce
-------------------------
Michael Klyce, as Trustee
/s/ Larry Hutchison
---------------------------
Larry Hutchison, as Trustee
/s/ Gary Coleman
------------------------
Gary Coleman, as Trustee
-4-
<PAGE>
Exhibit 4.6
FORM OF
AMENDED AND RESTATED DECLARATION
OF TRUST
TORCHMARK CAPITAL TRUST /(1)/
DATED AS OF _____________________________, _____________
(1) Insert I or II, as applicable.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions.................................................. 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act: Application............................ 9
Section 2.2. Lists of Holders of Securities.............................. 10
Section 2.3. Reports by the Property Trustee............................. 10
Section 2.4. Periodic Reports to Property Trustee........................ 10
Section 2.5. Evidence of Compliance with Conditions Precedent............ 11
Section 2.6. Events of Default; Waiver................................... 11
Section 2.7. Event of Default; Notice.................................... 13
ARTICLE III
ORGANIZATION
Section 3.1. Name........................................................ 13
Section 3.2. Office...................................................... 13
Section 3.3. Purpose..................................................... 14
Section 3.4. Authority................................................... 14
Section 3.5. Title to Property of the Trust.............................. 14
Section 3.6. Powers and Duties of the Regular Trustees................... 15
Section 3.7. Prohibition of Actions by the Trust and the Trustees........ 18
Section 3.8. Powers and Duties of the Property Trustee................... 19
Section 3.9. Certain Duties and Responsibilities of the Property Trustee. 21
Section 3.10. Certain Rights of Property Trustee.......................... 23
Section 3.11. Delaware Trustee............................................ 26
Section 3.12. Execution of Documents...................................... 27
Section 3.13. Not Responsible for Recitals or Issuance of Securities...... 27
Section 3.14. Duration of Trust........................................... 27
Section 3.15. Mergers..................................................... 27
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE IV
SPONSOR
Section 4.1. Sponsor's Purchase of Common Securities...................... 29
Section 4.2. Responsibilities of the Sponsor.............................. 29
ARTICLE V
TRUSTEES
Section 5.1. Number of Trustees........................................... 30
Section 5.2. Delaware Trustee............................................. 30
Section 5.3. Property Trustee; Eligibility................................ 31
Section 5.4. Certain Qualifications of Regular Trustees and Delaware
Trustee Generally ........................................... 31
Section 5.5. Regular Trustees............................................. 32
Section 5.6. Appointment, Removal and Resignation of Trustees............. 32
Section 5.7. Vacancies among Trustees..................................... 33
Section 5.8. Effect of Vacancies.......................................... 34
Section 5.9. Meetings..................................................... 34
Section 5.10. Delegation of Power.......................................... 34
Section 5.11. Merger, Conversion, Consolidation or Succession to Business.. 35
ARTICLE VI
DISTRIBUTIONS
Section 6.1. Distributions................................................ 35
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1. General Provisions Regarding Securities...................... 35
Section 7.2. Subordination of Common Securities........................... 36
Section 7.3. Execution and Authentication................................. 36
Section 7.4. Form and Dating.............................................. 37
Section 7.5. Paying Agent................................................. 37
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1. Termination of Trust......................................... 38
Section 8.2. Liquidation Distribution upon Dissolution of the Trust....... 39
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1. Transfer of Securities...................................... 40
Section 9.2. Transfer of Certificates.................................... 41
Section 9.3. Deemed Security Holders..................................... 41
Section 9.4. Book Entry Interests........................................ 41
Section 9.5. Notices to Clearing Agency.................................. 43
Section 9.6. Appointment of Successor Clearing Agency.................... 43
Section 9.7. Definitive Capital Security Certificates under Certain
Circumstances............................................... 43
Section 9.8. Mutilated, Destroyed, Lost or Stolen Certificates........... 44
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1. Liability.................................................... 45
Section 10.2. Exculpation.................................................. 45
Section 10.3. Fiduciary Duty............................................... 46
Section 10.4. Indemnification.............................................. 47
Section 10.5. Outside Business............................................. 50
ARTICLE XI
ACCOUNTING
Section 11.1. Fiscal Year.................................................. 50
Section 11.2. Certain Accounting Matters................................... 50
Section 11.3. Banking...................................................... 51
Section 11.4. Withholding.................................................. 51
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1. Amendments.................................................. 52
Section 12.2. Meetings of the Holders of Securities; Action by Written
Consent..................................................... 54
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1. Representations and Warranties of Property Trustee........... 56
Section 13.2. Representations and Warranties of Delaware Trustee........... 57
</TABLE>
iii
<PAGE>
<TABLE>
<S> <C>
ARTICLE XIV
MISCELLANEOUS
Section 14.1. Notices..................................................... 58
Section 14.2. Governing Law............................................... 59
Section 14.3. Intention of the Parties.................................... 59
Section 14.4. Headings.................................................... 60
Section 14.5. Successors and Assign....................................... 60
Section 14.6. Partial Enforceability...................................... 60
Section 14.7. Counterparts................................................ 60
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
<S> <C>
310(b) 5.3(c) & (d)
311(a) 2.2(b)
311(b) 2.2(b)
312(b) 2.2(b)
313 2.3
313(d) 2.3
314 2.4
314(a) 3.6(j)
314(c) 2.5
316(a) 2.6(a)- (c) &(e)
317(b) 3.8(h)
</TABLE>
* This Cross-Reference table does not constitute part of the Declaration and
shall not affect the interpretation of any of its terms or provisions.
v
<PAGE>
FORM OF
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
TORCHMARK CAPITAL TRUST /(2)/
____________ ___, ____
This AMENDED AND RESTATED DECLARATION OF TRUST (the "Declaration") is dated
and effective as of ____________ ____, _____, by the Trustees (as defined
herein), the Sponsor (as defined herein) and by the holders, from time to time,
of undivided beneficial interests in the assets of the Trust to be issued
pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established Torchmark
Capital Trust/(2)/ (the "Trust"), a trust under the Delaware Business Trust Act
pursuant to a Declaration of Trust dated as of July 21, 1999 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on July 21, 1999, for the sole purpose of issuing and
selling certain securities representing undivided beneficial interests in the
assets of the Trust and investing the proceeds thereof in certain Debt
Securities (as defined herein) of the Debt Security Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a business trust under the Delaware Business Trust Act and that
this Declaration constitutes the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1. Definitions.
-----------
(2) Insert I or II, as applicable.
Unless the context otherwise requires:
1
<PAGE>
(a) Capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section 1.1;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits of or to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"90 Day Period" has the meaning specified in Annex I.
"Administrative Action" has the meaning specified in Annex I.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent [or Conversion Agent](3)
"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 Saturday, Sunday or any
other day on which banking institutions in New York, New York or Chicago,
Illinois are permitted or required by any applicable law to close.
(3) Bracketed language relating to conversion to be inserted
throughout the document if the Securities are convertible. This
form assumes conversion into common stock of the Sponsor. The
Securities could, however, be convertible into some other
security.
2
<PAGE>
"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.
"Capital Securities Guarantee" means the guarantee agreement to
be dated as of ___________ ___, ______, of the Sponsor in respect of the Capital
Securities.
"Capital Security" has the meaning specified in Section 7.1.
"Capital 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).
"Capital Security Certificate" means a certificate representing a
Capital Security substantially in the form of Exhibit A-1.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Change in 1940 Act Law" shall have the meaning specified in
Annex I.
"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 Capital 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 Capital 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 ___________ ___, _____.
"Closing Price" has the meaning specified in Annex I.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities Guarantee" means the guarantee agreement, to
be dated as of ________ ___, ______, of the Sponsor in respect of the Common
Securities.
"Common Security" has the meaning specified in Section 7.1.
3
<PAGE>
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security substantially in the form
of Exhibit A-2.
["Common Stock" means the common stock of Torchmark Corporation,
a Delaware corporation, and any other shares of common stock as may constitute
"Common Stock" under the Indenture.]
"Company Indemnified Person" means (a) any Regular Trustee; (b)
any Affiliate of any Regular Trustee; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Regular Trustee;
or (d) any officer, employee or agent of the Trust or its Affiliates.
["Conversion Agent" has the meaning specified in Section 7.4.]
["Conversion Date" has the meaning specified in Annex I.]
["Conversion Price" has the meaning specified in Annex I.]
["Conversion Request" has the meaning specified in Annex I.]
"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 Agreement is located at
The First National Bank of Chicago, One First National Plaza,
Suite 0126 Chicago, IL 60670-0126, Attention: Corporate Trust
Services Division
"Coupon Rate" has the meaning specified in Annex I.
"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.
"Debt Securities" means the series of Debt Securities to be
issued by the Debt Security Issuer under the Indenture to be held by the
Property Trustee, a specimen certificate for such series of Debt Securities
being attached hereto as Exhibit B.
"Debt Security Issuer" means Torchmark Corporation, a Delaware
corporation, in its capacity as issuer of the Debt Securities under the
Indenture.
"Debt Security 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.
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"Declaration" has the meaning set forth in the recitals.
"Definitive Capital Security Certificates" has the meaning set
forth in Section 9.4.
"Delaware Trustee" has the meaning set forth in Section 5.1.
"Depositary" has the meaning specified in Annex I.
"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 Debt Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Extension Period" has the meaning specified in Annex I.
"Fiscal Year" has the meaning set forth in Section 11.1
"Fiduciary Indemnified Person" has the meaning set forth in
Section 10.4(b).
"Global Certificate" has the meaning set forth in Section 9.4(a).
"Holder" means a Person in whose name a Security is registered,
such Person being a beneficial owner within the meaning of the Business Trust
Act.
"Indemnified Person" means each Company Indemnified Person and
each Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of __________ ____,
____, between the Debt Security Issuer and The First National Bank of Chicago,
as trustee, or, if amended or supplemented as provided therein, as so amended or
supplemented or both, and shall include the forms and terms of a particular
series of securities established as contemplated thereunder.
"Investment Company" means an investment company as defined in
the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
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"Investment Company Event" has the meaning set forth in Annex I
hereto.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Like Amount" means (1) with respect to a redemption of
Securities having an aggregate Liquidation Amount equal to that portion of the
principal amount of Debt Securities to be contemporaneously redeemed in
accordance with the Indenture, allocated to the Common Securities and to the
Capital Securities based upon the relative Liquidation Amounts of such classes,
and (2) with respect to a distribution of Debt Securities to Holders of
Securities in connection with a dissolution or liquidation of the Trust, Debt
Securities having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Securities of the Holder to whom such Debt Securities
are distributed.
"Liquidation" has the meaning specified in Annex I.
"Liquidation Amount" means the stated amount of $___ per Capital
Security.
"Liquidated Distribution" has the meaning specified in the terms
of the Securities as set forth in Annex I.
"List of Holders" has the meaning set forth in Section 2.2(a)
"OID" has the meaning specified in Annex I.
"Original Declaration" has the meaning set forth in the recitals.
"Majority in liquidation amount of the Securities" means, except
as provided in the terms of the Capital 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 Capital 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 accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"Ministerial Action" has the meaning set forth in the terms of
the Securities as set forth in Annex I.
"Offered Securities" means the Capital Securities, the Capital
Securities Guarantee, the Debt Securities[, the shares of Common Stock issuable
upon conversion of the Capital Securities].
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"Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed 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.
"Option Closing Date" means the date of closing of any sale of
any securities issued pursuant to an over-allotment option.
"Paying Agent" has the meaning specified in Section 3.8(h).
"Payment Amount" has the meaning set forth in Section 6.1.
"Person" means 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.
"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).
"Pro Rata" has the meaning specified in Annex I.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption/Distribution Notice" has the meaning specified in
Annex I.
"Redemption Price" has the meaning specified in Annex I.
"Regular Trustee" has the meaning set forth in Section 5.1.
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"Regulatory Capital Event" has the meaning specified in Annex I.
"Related Party" means, with respect to the Sponsor, any direct or
indirect wholly owned subsidiary of the Sponsor or any other Person that owns,
directly or indirectly, 100% of the outstanding voting securities of the
Sponsor.
"Responsible Officer" means, with respect to the Property
Trustee, any officer within the Corporate Trust Office of the Property Trustee,
including any vice president, any assistant vice president, any assistant
secretary, the treasurer, any assistant treasurer or other officer of the
Corporate Trust Office of the 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.
"Securities" means the Common Securities and the Capital
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 Capital Securities Guarantee.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" or "Torchmark" means Torchmark Corporation, a Delaware
corporation, or any successor entity in a merger, consolidation or amalgamation,
in its capacity as sponsor of the Trust.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Successor Delaware Trustee" has the meaning set forth in Section
5.6(b)
"Successor Entity" has the meaning set forth in Section 3.15(b)
"Successor Securities" has the meaning set forth in Section
3.15(b)
"Tax Event" has the meaning set forth in Annex I hereto.
"Tax Opinion" has the meaning set forth in Annex I hereto.
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"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury.
"Trust" has the meaning set forth in the recitals.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
"Trust Property" means (i) the Debt Securities, (ii) any cash on
deposit in, or owing to, the Property Trustee Account and (iii) all proceeds and
rights in respect of the foregoing to be held by the Property Trustee pursuant
to the terms of this Declaration for the benefit of the Holders.
"25% in liquidation amount of the Securities" means, except as
provided in the terms of the Capital 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 Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of 25% or more of the aggregate liquidation amount (including the stated
amount that would be paid on redemption, liquidation or otherwise, plus
accumulated and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities of the relevant class.
"Underwriting Agreement" means the Underwriting Agreement for the
offering and sale of Capital Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1. Trust Indenture Act: Application.
--------------------------------
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions. The Trust Indenture Act shall
be applicable to this Declaration except as otherwise set forth herein, as if
the Securities had been sold pursuant to an effective registration statement.
(b) The Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
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(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 duties imposed under the
Trust Indenture Act 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 (i) within 14 days after each
record date for payment of Distributions, a list in such form as the Property
Trustee may reasonably require of the names and addresses of the Holders of the
Securities ("List of Holders") as of such record date, PROVIDED THAT, neither
the Sponsor nor the 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, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in the 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
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, the Property Trustee shall provide to the Holders of the Capital
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 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) 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.
Delivery of such reports, information and documents to the Property Trustee
is for informational purposes only and the Property Trustee's receipt of such
shall not constitute constructive notice of any information contained therein or
determinable from information contained
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therein, including the Sponsor's compliance with any of its covenants hereunder
(as to which the Property Trustee is entitled to rely exclusively on Officers'
Certificates).
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 Capital
Securities may by vote on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital 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 Debt
Securities (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
Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debt Securities 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
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Declaration without any further act, vote,
or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the
Common Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of
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Default with respect to the Common Securities and its consequences, PROVIDED
THAT, if the underlying Event of Default under the Indenture:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Event of Default under the Declaration as
provided below in this Section 2.6(b), the Event of
Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived, except where the Holders of the Common
Securities are deemed to have waived such Event of
Default under the Declaration as provided below in this
Section 2.6(b), 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 Debt Securities outstanding;
PROVIDED FURTHER, that each Holder of Common Securities will be deemed to have
waived any such Event of Default and all Events of Default with respect to the
Common Securities and its consequences until all Events of Default with respect
to the Capital Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or otherwise eliminated,
the Property Trustee shall act solely on behalf of the Holders of the Capital
Securities and only the Holders of the Capital Securities will have the right to
direct the Property Trustee to act 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 Capital Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Securities, as permitted by the Trust Indenture Act.
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Section 2.7. Event of Default; Notice.
------------------------
(a) The Property Trustee shall, within 90 days after the
occurrence of an Event of Default actually known to a Responsible Officer of the
Property Trustee, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all such defaults with respect to the Securities
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 Debt Securities or in the payment of
any sinking fund installment established for the Debt Securities, 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.
Any such notice given pursuant to this Section 2.7(a) shall state that an Event
of Default under the Indenture also constitutes an Event of Default under this
Declaration.
(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 the Declaration shall have actual
knowledge.
ARTICLE III
ORGANIZATION
Section 3.1. Name. The Trust is named "Torchmark Capital Trust /(4)/" 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.
(4) Insert I or II, as applicable.
Section 3.2. Office. The address of the principal office of the Trust is
------
c/o Torchmark Corporation, 2001 Third Avenue South, Birmingham, Alabama 35233.
On at least ten Business Days written notice to the Holders of Securities, the
Regular Trustees may designate another principal office.
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Section 3.3. Purpose. The exclusive purposes and functions of the Trust
-------
are (a) to issue and sell Securities and use the proceeds from such sale to
acquire the Debt Securities, and (b) except as otherwise limited herein, to
engage in only those other activities necessary, or incidental thereto. The
Trust shall not borrow money, issue debt or reinvest proceeds derived from
investments, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified for
United States federal income tax purposes as a grantor trust.
Section 3.4. Authority.
---------
(a) Subject to the limitations provided in this Declaration and
to the specific duties of the Property Trustee and the Sponsor, 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 or the Sponsor 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 or the Sponsor acting on behalf of the
Trust, no person shall be required to inquire into the authority of the Trustees
or the Sponsor to bind the Trust. Persons dealing with the Trust are entitled to
rely conclusively on the power and authority of the Trustees and the Sponsor as
set forth in this Declaration.
(b) Except as expressly set forth in this Declaration and except
if a meeting of the Regular Trustees is called with respect to any matter over
which the Regular Trustees have power to act, any power of the Regular Trustees
may be exercised by, or with the consent of, any one such Regular Trustee.
(c) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6, PROVIDED, that the registration statement
referred to in Section 3.6, including any amendments thereto, shall, subject to
Section 3.4(d), be signed by all of the Regular Trustees; and
(d) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of executing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.5. Title to Property of the Trust. Except as provided in
------------------------------
Section 3.8 with respect to the Debt Securities 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 of Securities 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.
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Section 3.6. Powers and Duties of the Regular Trustees. The Regular
-----------------------------------------
Trustees shall have the power, duty and authority to cause the Trust to engage
in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; PROVIDED, HOWEVER, that the Trust may issue no more than one series
of Capital Securities and no more than one series of Common Securities, and
PROVIDED FURTHER, that there shall be no interests in the Trust other than the
Securities, and the issuance of Securities shall be limited to a simultaneous
issuance of both Capital Securities and Common Securities on the Closing Date
and Option Closing Date, if any;
(b) in connection with the issue and sale of the Securities, at
the direction of the Sponsor, to:
(i) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on
Form S-3 prepared by the Sponsor, including any
amendments thereto in relation to the Capital
Securities;
(ii) execute and file an application, prepared by the
Sponsor, at such time as determined by the Sponsor, to
the New York Stock Exchange or any other national
stock exchange for listing, or quotation on an
interdealer quotation system, of the Capital
Securities;
(iii) execute and deliver letters, documents, or instruments
with The Depository Trust Company relating to the
Capital Securities;
(iv) execute and file with the Commission, at such time as
determined by the Sponsor, a registration statement on
Form 8-A, including any amendments thereto, prepared
by the Sponsor relating to the registration of the
Capital Securities under Section 12(b) of the Exchange
Act;
(v) execute and deliver for and on behalf of the Trust the
Underwriting Agreement and other related agreements
providing for the sale of the Securities;
(vi) 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 Capital Securities in any State in which
the Sponsor has determined to qualify or register such
Capital Securities for sale or resale, as the case may
be; and
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(vii) take all actions and perform such duties as may be
required of the Regular Trustees to open checking,
deposit or similar banking accounts as may be
necessary in connection with the issuance and sale of
the Securities;
(c) to acquire the Debt Securities with the proceeds of the sale
of the Capital Securities and the Common Securities; PROVIDED, HOWEVER, that the
Regular Trustees shall cause legal title to the Debt Securities to be held of
record in the name of the Property Trustee for the benefit of the Holders of the
Capital Securities and the Holders of Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; PROVIDED THAT the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any Ministerial Action in relation to a Special Event;
(e) to establish a record date with respect to all actions to be
taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316 (c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Capital 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 incidental to carry
out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, registrar,
transfer agent, Paying Agent [and Conversion Agent] for the Securities;
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(m) to give prompt written notice to the Holders of the
Securities of any notice received from the Debt Security Issuer of its election
(i) to defer payments of interest on the Debt Securities by extending the
interest payment period under the Indenture or (ii) to shorten the stated
maturity of the Debt Securities pursuant to the Indenture;
(n) to execute and deliver all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the Trust in all
matters necessary or incidental to the foregoing;
(o) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(p) to take any action, not inconsistent with this Declaration
or with applicable law, that the Regular Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
(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 Debt Security Issuer to ensure
that the Debt Securities will be treated as
indebtedness of the Debt Security Issuer for United
States federal income tax purposes,
PROVIDED THAT such action does not adversely affect the interests of the Holders
of the Securities or vary the terms of the Capital Securities;
(q) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust;
(r) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to Section 11.2 herein; and
(s) to the extent provided in this Declaration, the winding up
of the affairs of and liquidation of the Trust and the preparation, execution
and filing of the Certificate of Cancellation with the Secretary of State of the
State of Delaware.
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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 Sponsor.
The Trust initially appoints the Property Trustee as transfer
agent and registrar for the Capital Securities.
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 Debt Securities, but shall distribute all such
proceeds to the 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 or acquire
any securities other than the Debt Securities;
(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 as permitted by the
terms of this Declaration;
(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 Annex I
hereto, (A) direct the time, method and place of
exercising any trust or power conferred upon the
Property Trustee with respect to the Debt
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Securities, (B) waive any past default that is not
waivable under the Indenture, (C) exercise any right
to rescind or annul any declaration that the principal
of all the Debt Securities shall be due and payable,
or (D) consent to any amendment, modification or
termination of the Indenture or the Debt Securities
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 (x) the Trust will be
deemed an Investment Company required to be registered
under the Investment Company Act or (y) the Trust will
not be classified as a grantor trust for United States
federal income tax purposes.
Section 3.8. Powers and Duties of the Property Trustee.
-----------------------------------------
(a) The legal title to the Debt Securities shall be owned by and
held of record in the name of the Property Trustee (acting in such capacity) for
the benefit of the Trust and the Holders of the Securities. The right, title and
interest of the Property Trustee to the Debt Securities 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 Debt Securities have been
executed and delivered.
(b) The Property Trustee shall not transfer its right, title and
interest in the Debt Securities 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 Debt Securities held by the
Property Trustee (which payments include, but are not
limited to, distributions made pursuant to the
Guarantee), deposit such funds into the Property
Trustee Account and make payments to the Holders of the
Capital 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 Capital Securities by a "nationally recognized
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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 Capital Securities and the Common Securities to
the extent the Debt Securities are redeemed or mature;
(iii) engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of
the Trust Property in accordance with the terms of
this Declaration; and
(iv) to the extent provided for in this Declaration, take
such ministerial actions necessary in connection with
the winding up of the affairs of and liquidation of
the Trust and the preparation, execution and filing of
the Certificate of Cancellation with the Secretary of
State of the State of Delaware.
(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;
PROVIDED HOWEVER, that if an Event of Default has occurred and is continuing and
such event is attributable to the failure of the Debt Security Issuer to pay
interest or principal on the Debt Securities on the date such interest or
principal is otherwise payable (or in the case of redemption, on the redemption
date), then a Holder of Capital Securities may directly institute a proceeding
for enforcement of payment to such Holder of the principal of or interest on the
Debt Securities having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debt Securities and, PROVIDED, FURTHER,
that if the Property Trustee fails to enforce its rights under the Debt
Securities, any Holder of Capital Securities may institute a legal proceeding
against any person to enforce the Property Trustee's rights under the Debt
Securities. In connection with such Direct Action, the rights of the Holders of
the Common Securities will be subrogated to the rights of such Holder of Capital
Securities to the extent of any payment made by the Debt Security Issuer to such
Holder of Capital Securities in such Direct Action. Except as provided in the
preceding sentences, the Holders of Capital Securities will not be able to
exercise directly any other remedy available to the holders of the Debt
Securities.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
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(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 Entity has been appointed and has accepted the
appointment of Property Trustee 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 Debt Securities 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
Debt Securities 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
Distributions 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.
(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:
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(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
Debt Securities and the
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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 Debt Securities 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 in writing 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 (whether in its
original or facsimile form) 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 acting on behalf of the Trust contemplated by
this Declaration shall be sufficiently evidenced by an
Officers' Certificate;
(iii) whenever in the administration of this Declaration, the
Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or
omitting any action hereunder, the Property
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<PAGE>
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, the Guarantor 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 reregistration thereof;
(v) the Property Trustee may consult with counsel of its
selection 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 counsel or 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 fees, charges,
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
(a) require the Holders of Capital Securities to offer
such indemnity in the event such Holders direct the
Property Trustee to take any action it is empowered to
take under this Declaration following an Event of Default
or (b) 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,
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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 but shall incur no additional liability of any kind
by reason of such inquiry;
(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
written instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the
Property Trustee (i) may request written instructions
from the Holders of the 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 accordance with such
instructions;
(xi) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under any
obligation to take any action that is discretionary under
the provisions of this Declaration;
(xii) the Property Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon
it by this Declaration;
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(xiii) the Property Trustee shall not be deemed to have notice
of any default or Event of Default unless a Responsible
Officer of the Property Trustee has actual knowledge
thereof or unless written notice of any event which is in
fact such a default or Event of Default is received by
the Property Trustee at the Corporate Trust Office of the
Property Trustee, and such notice references the Capital
Securities and this Declaration; and
(xiv) in the event that direction from the Regular Trustees is
required hereunder, the Property Trustee , at its option,
may make application to the Regular Trustee for written
instructions and any such application shall set forth in
writing any action proposed to be taken or omitted by the
Property Trustee under this Declaration and the date on
and/or after which such action shall be taken or such
omission shall be effective. The Property Trustee shall
not be liable for any action taken by, or omission of,
the Property Trustee in accordance with a proposal
included in such application on or after the date
specified in such application (which date shall not be
less than three Business Days after the date any Regular
Trustee actually receives such application, unless any
such Regular Trustee shall have consented in writing to
any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the
Property Trustee shall have received written instructions
in response to such application providing the directions
required to be given hereunder.
In the event that the Property Trustee is also acting as
authenticating agent, Paying Agent, transfer agent and security registrar, the
rights, privileges, immunities, benefits and protections afforded to the
Property Trustee pursuant to this Article 3 shall also be afforded to such
authenticating agent, Paying Agent, transfer agent and security registrar and to
each agent, custodian and other Person employed to act hereunder.
(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, the Property Trustee or the
Trustees generally (except as may be required under the Business Trust Act)
described
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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(a) of the Business Trust Act.
Section 3.12. Execution of Documents. Except as otherwise required by the
----------------------
Business Trust Act, any 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,
subject to Section 3.4(d), be signed by all of the Regular Trustees.
Section 3.13. Not Responsible For Recitals or Issuance of Securities. The
------------------------------------------------------
recitals contained in this Declaration and the Securities shall be taken as the
statements of the Sponsor, and the Trustees do not assume any responsibility for
their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make
no representations as to the validity or sufficiency of this Declaration or the
Securities.
Section 3.14. Duration of Trust. The Trust, unless terminated pursuant to
-----------------
the provisions of Article VIII hereof, shall have existence for _________ (__)
years from July 21, 1999.
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 as an
entirety or 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) if the Trust is not the Survivor, 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 Capital Securities other securities
having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital
Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
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<PAGE>
(ii) the Sponsor expressly acknowledges a trustee of the
Successor Entity that possesses the same powers and duties
as the Property Trustee as the record holder of the Debt
Securities;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or another organization on which the Capital
Securities are then listed;
(iv) the Debt Security 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 Debt
Securities;
(v) such merger, consolidation, amalgamation or replacement
does not cause the Capital Securities (including any
Successor Securities) to be downgraded by any nationally
recognized statistical rating organization;
(vi) 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 the Holders' interest in
the Successor Entity);
(vii) such Successor Entity has a purpose identical to that of
the Trust;
(viii) prior to such merger, consolidation, amalgamation or
replacement, the Sponsor has received an opinion of
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 the Holders' interest in the Successor
Entity); and
(B) following such merger, consolidation, amalgamation or
replacement, neither the Trust nor the Successor
Entity will be required to register as an Investment
Company; and
(C) following such merger, consolidation, amalgamation or
replacement, the Trust (or the Successor Entity) will
be
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classified as a grantor trust for United States
federal income tax purposes; and
(ix) the Sponsor guarantees the obligations of the Successor
Entity under the Successor Securities at least to the
extent provided by the Securities Guarantees.
(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 the Successor Entity to be classified as other than a grantor
trust for United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1. Sponsor's Purchase of Common Securities. On the Closing
---------------------------------------
Date, the Sponsor will purchase all of the Common Securities issued by the
Trust, in an amount at least equal to 3% of the capital of the Trust, at the
same time as the Capital Securities are sold.
Section 4.2. Responsibilities of the Sponsor. In connection with the issue
-------------------------------
and sale of the Capital Securities, the Sponsor shall have the right and
responsibility to engage in the following activities:
(a) prepare for filing by the Trust with the Commission a
registration statement on Form S-3 in relation to the Securities, including any
amendments thereto;
(b) prepare for execution and filing by the Trust of an application,
prepared by the Sponsor, at such time as determined by the Sponsor, to the New
York Stock Exchange or any other national stock exchange for listing, or
quotation on an interdealer quotation system, of the Capital Securities;
(c) prepare for execution and filing by the Trust of documents or
instruments to be delivered to The Depository Trust Company relating to the
Capital Securities;
(d) prepare for execution and filing by the Trust of a registration
statement on Form 8-A, including any amendments thereto, prepared by the Sponsor
relating to the registration of the Capital Securities under Section 12(b) of
the Exchange Act;
(e) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions
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<PAGE>
which must be taken by the Trust, and advise the Trust of actions it must take,
and prepare for execution and filing any documents to be executed and filed by
the Trust, as the Sponsor deems necessary or advisable in order to comply with
the applicable laws of any such States; and
(f) to negotiate the terms of the Underwriting Agreement providing
for the sale of the Capital 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; PROVIDED, HOWEVER, that the number of Trustees shall in
no event be less than two (2); PROVIDED FURTHER, that (i) one Trustee, in the
case of a natural person, shall be a person who is a resident of the State of
Delaware or that, if not a natural person, is an entity which has its principal
place of business in the State of Delaware (the "Delaware Trustee"); (ii) there
shall be at least one Trustee who is any employee of, or is affiliated with the
Sponsor (a "Regular Trustee"); and (iii) one Trustee shall be the Property
Trustee, and such Trustee may also serve as Delaware Trustee if it meets the
applicable requirements.
Section 5.2. Delaware Trustee. If required by the Business Trust Act, one
----------------
Trustee 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
and 6.02 shall have no application.
The Initial Delaware Trustee shall be: Bank One Delaware, Inc.
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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; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or
Person permitted by the Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50
million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial or
District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then for the purposes
of this Section 5.3(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.
(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 obligor referred to in Section
310(b) of the Trust Indenture Act) shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
(d) The Capital Securities Guarantee shall be deemed to be
specifically described in this Declaration for purposes of clause
(i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
(e) The initial Property Trustee shall be: The First National Bank of
Chicago.
Section 5.4. Certain 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.
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Section 5.5. Regular Trustees. The initial Regular Trustees shall be
----------------
Michael Klyce, Larry Hutchison and Gary Coleman.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Regular Trustees is called with respect to any matter over which
the Regular Trustees have power to act, any power of the Regular Trustees may be
exercised by, or with the consent of, any one such Regular Trustee.
(b) Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any Regular
Trustee is authorized to execute on behalf of the Trust any documents which the
Regular Trustees have the power and authority to cause the Trust to execute
pursuant to Section 3.6, [PROVIDED, THAT, the registration statement referred to
in Section 3.6, including any amendments thereto, shall, subject to Section
3.4(d), be signed by all of the Regular Trustees].
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) (i) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 5.6(a) until 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; and
(ii) 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
successor shall have been appointed or until his death, removal or resignation.
Any Trustee may resign from office (without
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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 (a
"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
shall have been appointed and accepted appointment as provided in this Section
5.6 within 60 days after delivery of an instrument of resignation or removal,
the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, 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
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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 dissolve, terminate or
annul the Trust. Whenever a vacancy in the number of Regular Trustees shall
occur, until such vacancy is filled by the appointment of a Regular Trustee in
accordance with Section 5.6, the Regular Trustees in office, regardless of their
number, shall have all the powers granted to the Regular Trustees and shall
discharge all the duties imposed upon the Regular Trustees by this Declaration.
Section 5.9. Meetings. If there is more than one Regular Trustee,
--------
meetings of the Regular Trustees shall be held from time to time upon the call
of any Regular Trustee. Regular meetings of the Regular Trustees may be held at
a time and place fixed by resolution of the Regular Trustees. Notice of any in-
person meetings of the Regular Trustees shall be hand delivered or otherwise
delivered in writing (including by facsimile, with a hard copy by overnight
courier) not less than 48 hours before such meeting. Notice of any telephonic
meetings of the Regular Trustees or any committee thereof shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before a meeting. Notices
shall contain a brief statement of the time, place and anticipated purposes of
the meeting. The presence (whether in person or by telephone) of a Regular
Trustee at a meeting shall constitute a waiver of notice of such meeting except
where a Regular Trustee attends a meeting for the express purpose of objecting
to the transaction of any activity on the ground that the meeting has not been
lawfully called or convened. Unless provided otherwise in this Declaration, any
action of the Regular Trustees may be taken at a meeting by vote of a majority
of the Regular Trustees present (whether in person or by telephone) and eligible
to vote with respect to such matter, provided that a Quorum is present, or
without a meeting by the unanimous written consent of the Regular Trustees. In
the event there is only one Regular Trustee, any and all action of such Regular
Trustee shall be evidenced by a written consent of such Regular Trustee.
Section 5.10. Delegation of Power. A Regular Trustee may, by power of
-------------------
attorney consistent with applicable law, delegate to any other natural person
over the age of 21 his or her power for the purposes of 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.
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.
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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 of Securities shall receive
-------------
Distributions (as defined herein) in accordance with the applicable terms of the
relevant Holder's Securities. Distributions shall be made on the Capital
Securities and the Common Securities in accordance with the preferences set
forth in their respective terms. If and to the extent that the Debt Security
Issuer makes a payment of interest (including Compound Interest (as defined in
the Indenture, if applicable) and Additional Interest (as defined in the
Indenture, if applicable)), premium and/or principal on the Debt Securities 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 [convertible] Capital Securities representing undivided beneficial interests
in the assets of the Trust having such terms as are set forth in Annex I (the
"Capital Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Trust shall issue no securities
or other interests in the assets of the Trust other than the Capital Securities
and the Common Securities. The issuance of the Capital Securities will not be
subject to any preemptive purchase rights of any Person.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(d) Every Person, by virtue of having become a Holder or a Capital
Security Beneficial Owner in accordance with the terms of this Declaration,
shall be deemed to have expressly assented and agreed to the terms of and shall
be bound by this Declaration.
Section 7.2. Subordination of Common Securities. Payment of Distributions
----------------------------------
on, and the redemption price of the Capital Securities and Common Securities, as
applicable, will be made PRO RATA based on the liquidation amount of such
Capital Securities and Common Securities. However, if on any date on which a
Distribution is to be made, or any Redemption Date, an Event of Default has
occurred and is continuing, no payment of any Distribution on, or Redemption
Price of, any of the Common Securities, and no other payment on account of the
redemption, liquidation or other acquisition of such Common Securities shall be
made unless payment in full in cash of all accumulated and unpaid Distribution
on all the outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the Redemption
Price the full amount of such Redemption Price on all the outstanding Capital
Securities then called for redemption, shall have been made or provided for, and
all funds available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions on, or the Redemption Price of, the
Capital Securities then due and payable.
Section 7.3. Execution And Authentication.
----------------------------
(a) The Certificates shall be signed on behalf of the Trust by a
Regular Trustee. In case any Regular Trustee of the Trust who shall have signed
any of the Securities shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee.
(b) One Regular Trustee shall sign the Capital Securities for the
Trust by manual or facsimile signature. Unless otherwise determined by the
Trust, such signature shall, in the case of Common Securities, be a manual
signature.
A Capital Security shall not be valid until authenticated by the
manual signature of an authorized signatory of the Property Trustee. The
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular Trustee, the
Property Trustee shall authenticate the Capital Securities for original issue.
The Property Trustee may appoint an authenticating agent acceptable to
the Trust to authenticate Capital Securities. An authenticating agent may
authenticate Capital Securities whenever the Property Trustee may do so. Each
reference in this Declaration to authentication by the Property
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Trustee includes authentication by such agent. An authenticating agent has the
same rights as the Property Trustee to deal with the Trust or an Affiliate.
Section 7.4. Form And Dating. The Capital Securities and the Property
---------------
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A-1 and the Common Securities shall be substantially in the form of
Exhibit A-2, each of which is hereby incorporated in and expressly made a part
of this Declaration. Certificates may 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. The Securities may have
letters, numbers, notations, other marks of identification or designation or
other changes or additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice and such legends or endorsements required by
law, stock exchange rule and agreements to which the Trust is subject, if any
(provided that any such notation, legend or endorsement is in a form acceptable
to the Trust). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Property Trustee in writing. Each
Capital Security Certificate shall be dated the date of its authentication. The
terms and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and, to the extent applicable, the Property Trustee and the Sponsor,
by their execution and delivery of this Declaration, expressly agree to such
terms and provisions and to be bound thereby.
Section 7.5. Paying Agent. The Trust shall maintain in the Borough of
------------
Manhattan, City of New York, State of New York, an office or agency where
Capital Securities not held in book-entry only form may be presented for payment
("Paying Agent"). [The Trust shall maintain an office or agency where
Securities may be presented for conversion ("Conversion Agent").] The Trust may
appoint the Paying Agent [and the Conversion Agent] and may appoint one or more
additional paying agents [and one or more additional conversion agents] in such
other locations as it shall determine. The term "Paying Agent" includes any
additional paying agent [and the term "Conversion Agent" includes any additional
conversion agent]. The Trust may change any Paying Agent [or Conversion Agent]
without prior notice to any Holder. The Trust shall notify the Property Trustee
in writing of the name and address of any Agent not a party to this Declaration.
If the Trust fails to appoint or maintain another entity as Paying Agent [or
Conversion Agent], the Property Trustee shall act as such. The Trust or any of
its Affiliates may act as Paying Agent [or Conversion Agent]. The Trust shall
act as Paying Agent [and Conversion Agent] for the Common Securities.
The Trust initially appoints _________________, ___________________,
_____________, __________, ____ _______, Attention: ____________ as Paying Agent
[and Conversion Agent] for the Capital Securities.
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ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1. Dissolution and Termination of Trust.
------------------------------------
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor or the Holder of the
Common Securities;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the Holder of the
Common Securities; upon consent of at least a Majority in
liquidation amount of the Securities voting together as a
single class to the filing of a certificate of cancellation
with respect to the Trust; or the revocation of the
Sponsor's charter or the charter of the Holder of the
Common Securities 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
Sponsor, the Trust or the Holder of the Common Securities;
(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) upon the occurrence and continuation of a Special Event
pursuant to which the Trust shall be dissolved in
accordance with the terms of the Securities following which
all of the Debt Securities held by the Property Trustee
shall be distributed to the Holders of Securities in
exchange for all of the Securities;
(vi) upon the written direction to the Property Trustee from the
Holder of the Common Securities at any time to dissolve the
Trust and, after satisfaction of liabilities to creditors
of the Trust as provided by applicable law (including,
without limitation, by paying or making reasonable
provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act),
to distribute the Debt Securities to Holders in exchange
for the Securities, subject to the Regular Trustees'
receipt of an opinion of independent counsel experienced in
such matters to the effect that the holders of the Capital
Securities will not recognize any income, gain
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<PAGE>
or loss for United States federal income tax purposes as a
result of the dissolution of the Trust and such
distribution to Holders;
[(vii) upon the distribution of the Sponsor's Common Stock to all
Holders of Capital Securities upon conversion of all
outstanding Capital Securities;]
(viii) the expiration of the term of the Trust on ________ ____,
_____;
(ix) before the issuance of any Securities, with the consent of
all of the Regular Trustees and the Sponsor; or
(x) with the consent of at least a Majority in Liquidation
Amount of Capital Securities, voting together as a single
class;
provided that, if a claim has been made under the Capital
Securities Guarantee, the Trust shall not dissolve until (x) such
claim has been satisfied and the proceeds therefrom have been
distributed to the Holders of the Capital Securities or (y) the
Debt Securities have been distributed to the Holders pursuant to
Section 8.2. hereof.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and the liquidation of the Trust, the Trustees
shall file a certificate of cancellation with the Secretary of State of the
State of Delaware.
(c) The provisions of Sections 3.9 and 3.10 and Article X shall
survive the termination of the Trust.
Section 8.2. Liquidation Distribution upon Dissolution of the Trust.
------------------------------------------------------
(a) In the event of any voluntary or involuntary dissolution of the
Trust (each a "Trust Liquidation"), the Holders on the date of the Trust
Liquidation will be entitled to receive, out of the assets of the Trust
available for distribution to Holders after satisfaction of the Trust's
liabilities to creditors (including, without limitation, by paying or making
reasonable provisions to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), Debt Securities in
an aggregate stated liquidation amount equal to the aggregate stated liquidation
amount of, with a Dividend rate identical to the Dividend rate of, and
accumulated and unpaid Dividends equal to accumulated and unpaid Dividends on,
such Capital Securities (the "Trust Liquidation Distribution") on a Pro Rata
basis (subject to Section 8.2.(b) below) in exchange for such Capital
Securities.
(b) The Holders of the Common Securities will be entitled to receive
distributions upon any such Trust Liquidation Pro Rata with the Holders of the
Capital Securities except that upon
39
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the occurrence and during the continuance of an event of default under the
Capital Securities Guarantee, the Capital Securities shall have a preference
over the Common Securities with regard to such distributions.
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, Capital Securities shall be
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 shall not violate the Securities Act
and is subject to the condition precedent that the transferor obtain the written
opinion of 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 required to
register under the Investment Company Act or the transferee
would become an Investment Company required to register
under the Investment Company Act.
(d) Each Common Security that bears or is required to bear the legend
set forth in this Section 9.1(d) shall be subject to the restrictions on
transfer provided in the legend set forth in this Section 9.1(d), unless such
restrictions on transfer shall be waived by the written consent of the Regular
Trustees, and the Holder of each such Common Security, by such security holder's
acceptance thereof, agrees to be bound by such restrictions on transfer. As used
in this Section 9.1(d) and in Section 9.1(e), the term "transfer" encompasses
any sale, pledge, transfer or other disposition (by operation of law or
otherwise) of any such Common Security.
Any certificate evidencing a Common Security shall bear a legend in
substantially the following form, unless otherwise agreed by the Regular
Trustees (with written notice thereof to the Property Trustee):
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THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
Section 9.2. Transfer of Certificates. The Regular Trustees shall provide
------------------------
for the registration of Certificates and of transfers of Certificates, which
will be effected without charge, but only upon payment in respect of any tax or
other government charges that may be imposed in relation to it. Upon surrender
for registration of transfer of any Certificate, the Regular Trustees shall
cause one or more new Certificates to be issued in the name of the designated
transferee or transferees. Every Certificate surrendered for registration of
transfer shall be accompanied by a written instrument of transfer in form
satisfactory to the Regular Trustees duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer shall be canceled by the Regular Trustees. A transferee
of a Certificate shall be entitled to the rights and subject to the obligations
of a Holder hereunder upon the receipt by such transferee of a Certificate. By
acceptance of a Certificate, each transferee shall be deemed to have agreed to
be bound by this Declaration.
Section 9.3. Deemed Security Holders. The Trustees may treat the Person
-----------------------
in whose name any Certificate shall be registered on the books and records of
the Trust as the sole holder of such Certificate and of the Securities
represented by such Certificate for purposes of receiving Distributions and for
all other purposes whatsoever and, accordingly, shall not be bound to recognize
any equitable or other claim to or interest in such Certificate or in the
Securities represented by such Certificate on the part of any Person, whether or
not the Trust shall have actual or other notice thereof.
Section 9.4. Book Entry Interests.
--------------------
(a) So long as Capital Securities are eligible for book-entry
settlement with the Clearing Agency or unless otherwise required by law, all
Capital Securities that are so eligible may be represented by one or more fully
registered Capital Security Certificates (each, a "Global Certificate") in
global form 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 Capital Security Beneficial Owner will receive a definitive Capital
Security Certificate representing such Capital Security Beneficial Owner's
interests in such Global Certificates, except as provided in Section 9.7 below.
The transfer and exchange of beneficial interests in any such Security in global
form shall be effected through the Clearing Agency in accordance with this
Declaration and the procedures of the Clearing Agency therefor.
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(b) Except as provided below, beneficial owners of a Capital Security
in global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Capital Security in global form.
(c) Any Global Certificate may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Declaration as may be required by the Clearing Agency, by
any national securities exchange or by the National Association of Securities
Dealers, Inc. as may be required to comply with any applicable law or any
regulation thereunder or with the rules and regulations of any securities
exchange or interdealer quotation system upon which the Capital Securities may
be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Capital
Securities are subject.
(d) Unless and until definitive, fully registered Capital Security
Certificates (the "Definitive Capital Security Certificates") have been issued
to the Capital Security Beneficial Owners of a Capital Security in global form
pursuant to Section 9.7:
(i) the provisions of this Section 9.4 shall be in full force
and effect with respect to such Capital Securities;
(ii) 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 such Capital Securities and the
sole holder of the Global Certificates and shall have no
obligation to the Capital Security Beneficial Owners of
such Capital Securities;
(iii) 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
(iv) the rights of the Capital Security Beneficial Owners of
Capital Securities in global form shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Capital
Security Beneficial Owners and the Clearing Agency and/or
the Clearing Agency Participants. The Clearing Agency will
make book-entry transfers among Clearing Agency
Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing
Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants, PROVIDED, that
solely for the purposes of determining whether the Holders
of the requisite amount of Capital
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Securities have voted on any matter provided for in this
Declaration, so long as Definitive Capital Security
Certificates have not been issued, the Trustees may
conclusively rely on, and shall be protected in relying on,
any written instrument (including a proxy) delivered to the
Trustees by the Clearing Agency setting forth the Capital
Securities Beneficial Owners' votes or assigning the right
to vote on any matter to any other Persons either in whole
or in part.
(e) Notwithstanding any other provisions of this Declaration (other
than the provisions set forth in this Section 9.4(e)), a Capital Security in
global form may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or by a nominee of the Clearing Agency to the
Clearing Agency or another nominee to a successor Clearing Agency or a nominee
of such successor Clearing Agency.
Section 9.5. Notices to Clearing Agency. Whenever a notice or other
--------------------------
communication to the Capital Security Holders is required under this
Declaration, unless and until Definitive Capital Security Certificates shall
have been issued to the Capital 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 Capital Security Holders to the Clearing
Agency, and shall have no notice obligations to the Capital Security Beneficial
Owners.
Section 9.6. Appointment of Successor Clearing Agency. If any Clearing
----------------------------------------
Agency notifies the Trust that it is unwilling or unable to continue its
services as securities depositary with respect to the Capital Securities, if
such Clearing Agency ceases to perform such services, or if at any time such
Clearing Agency ceases to be a clearing agency registered as such under the
Exchange Act when such Clearing Agency is required to be so registered to act as
such depositary, then the Regular Trustees may, in their sole discretion,
appoint a successor Clearing Agency with respect to such Capital Securities.
Section 9.7. Definitive Capital Security Certificates Under Certain
------------------------------------------------------
Circumstances. If:
- -------------
(a) a Clearing Agency notifies the Trust that it is unwilling or
unable to continue its services as securities depositary with respect to the
Capital Securities, if at any time such Clearing Agency ceases to be a clearing
agency registered as such under the Exchange Act when such Clearing Agency is
required to be so registered to act as such depositary and no successor Clearing
Agency shall have been appointed pursuant to Section 9.6 within 90 days of such
notification;
(b) the Regular Trustees (with the consent of the Sponsor), in their
sole discretion, determine that the Capital Securities in global form shall be
exchanged for certificated Capital Securities; or
(c) there shall have occurred and be continuing an Event of Default;
43
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then:
(d) Definitive Capital Security Certificates shall be prepared by the
Regular Trustees on behalf of the Trust with respect to such Capital Securities;
and
(e) upon surrender of the Global Certificates by the Clearing Agency,
accompanied by registration instructions, the Regular Trustees shall cause
Definitive Capital Security Certificates to be delivered to Capital Security
Beneficial Owners of such Capital Securities 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 Capital 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
Capital Securities may be listed, or to conform to usage.
At such time as all interests in a Capital Security in global form
have been redeemed, [converted,] exchanged, repurchased or canceled, such
Capital Security in global form shall be, upon receipt thereof, canceled by the
Trust in accordance with standing procedures and instructions of the Clearing
Agency.
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 Property Trustee or the Regular
Trustees such security or indemnity as may be required by them to keep each of
them harmless,
then:
in the absence of notice that such Certificate shall have been acquired by a
bona fide purchaser, the Property Trustee or 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 Property Trustee or 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.
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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; or
(ii) required to pay to the Trust or to any Holder of Securities
any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital 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, in the
case of the Property Trustee, except as otherwise set forth in Section 3.9) 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
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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
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(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 Debt Security Issuer shall indemnify, to the fullest
extent permitted by law, any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action,
suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his
conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or
upon a plea of NOLO CONTENDERE or its equivalent, shall not,
of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe
that his conduct was unlawful.
(ii) The Debt Security Issuer shall indemnify, to the fullest
extent permitted by law, any Company Indemnified Person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the
right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Trust and except
that no such indemnification shall be made in respect of any
claim, issue or matter as to which such Company Indemnified
Person shall have been adjudged to be liable to the Trust
unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the
adjudication of liability
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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 Debt Security 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) or (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 Debt Security 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 Debt Security Issuer as authorized
in this Section 10.4(a). Notwithstanding the foregoing, no
advance shall be made by the Debt Security 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) by 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
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deliberately breached his duty to the Trust or its Common
or Capital 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 shareholders or disinterested directors
of the Debt Security Issuer or Capital 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 Debt Security 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 Debt Security 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 Debt
Security 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.
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(b) The Debt Security 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 or the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The provisions of this Section 10.4(b) shall survive the satisfaction
and discharge of this Declaration or the resignation or removal of the Property
Trustee or the Delaware Trustee, as the case may be.
Section 10.5. Outside Business. 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 nor 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 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 same as the fiscal year of the Sponsor, unless another fiscal year
is required by the Code or Treasury regulations promulgated thereunder.
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 detail, each transaction of the
Trust. The books of account shall be maintained on the accrual method of
accounting, in compliance with generally accepted accounting principles,
consistently applied. The
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Trust shall use the accrual method of accounting for the 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 Sponsor 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 Sponsor, annual financial statements of the Sponsor, including a balance
sheet of the Sponsor 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 Debt Securities 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
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from actual Distributions made, the Trust may reduce subsequent Distributions by
the amount of such withholding. Furthermore, if withholding is imposed on
payments of interest on the Debt Securities, to the extent such withholding is
attributable to ownership by a specific Holder of Capital Securities, the amount
withheld shall be deemed a distribution in the amount of the withholding to such
specific Holder.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1. Amendments. Except as otherwise provided in this
----------
Declaration or by any applicable terms of the Securities,
(a) 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) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, also by
the Property Trustee; and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, also by
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 and the Delaware 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 and Delaware
Trustee shall have first received 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:
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(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; 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 (i) materially adversely affect the
powers, preferences or special rights of the Securities whether by way of
amendment to this Declaration or otherwise or (ii) provide for the dissolution,
winding up or termination of the Trust other than pursuant to the terms of this
Declaration, may be effected only with the approval of the Holders of at least a
Majority in liquidation amount of the Securities affected thereby; provided,
that if any amendment or proposal referred to in clause (i) hereof would
adversely affect only the Capital Securities or the Common Securities, then only
the affected class will be entitled to vote on such amendment or proposal and
such amendment or proposal shall not be effective except with the approval of a
Majority in liquidation amount of such class of Securities;
(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;
(g) notwithstanding Section 12.1(c), this Declaration may be amended
from time to time by the Holders of a Majority in liquidation amount of the
Common Securities and the Property Trustee, without the consent of the Holders
of the Capital Securities to:
(i) cure any ambiguity, correct or supplement any provision in
this Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to
matters or questions arising under this Declaration, which
shall not be inconsistent with the other provisions of this
Declaration; or
(ii) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure
that the Trust will be classified for United States federal
income tax purposes as a grantor
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trust at all times that any Securities are outstanding or to
ensure that the Trust will not be required to register as an
investment company under the Investment Company Act;
PROVIDED, HOWEVER, such action specified in this Section 12.1(g) shall not
adversely affect in any material respect the interests of any Holder of
Securities; and
(h) this Declaration may be amended by the Holders of a Majority in
liquidation amount of the Common Securities and the Property Trustee if:
(i) the Holders of a Majority in liquidation amount of the
Capital Securities consent to such amendment; and
(ii) the Regular Trustees have received an opinion of independent
counsel experienced in such matters to the effect that such
amendment or the exercise of any power granted to the
Regular Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption
from status as an "investment company" under the Investment
Company Act,
PROVIDED, that without the consent of each Holder of Securities, this
Declaration may not be amended to:
(x) change the amount or timing of any distribution on the
Securities or otherwise adversely affect the amount of any
distribution required to be made in respect of the
Securities as of a specified date; or
(y) restrict the right of a Holder of Securities to institute
suit for the enforcement of any such payment on or after
such date.
(i) Any amendments of this Declaration shall become effective when notice
thereof is given to Holders of Securities.
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 Capital
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 25% in liquidation amount of such class of Securities. Such direction
shall be given by delivering to the Regular Trustees one or more calls
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in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Security Certificates held by the Holders of Securities exercising
the right to call a meeting and only those Securities specified shall be counted
for purposes of determining whether the required percentage set forth in the
second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms of the
Securities, the following provisions shall apply to meetings of Holders of
Securities:
(i) notice of any such meeting shall be given to all the Holders
of Securities having a right to vote thereat at least 7 days
and not more than 60 days before the date of such meeting.
Each such notice will include a statement setting forth the
following information: (i) the date of such meeting or the
date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on
which such Holders are entitled to vote or of such matter
upon which written consent is sought; and (iii) instructions
of the delivery of proxies or consents. 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 Capital Securities are
listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders of
Securities. Any action that may be taken at a meeting of the
Holders of Securities may be taken without a meeting if a
consent in writing setting forth the action so taken is
signed by the Holders of Securities owning not less than the
minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a
meeting at which all Holders of Securities having a right to
vote thereon were present and voting. Prompt notice of the
taking of action without a meeting shall be given to the
Holders of Securities entitled to vote who have not
consented in writing. The Regular Trustees may specify that
any written ballot submitted to the Security Holder for the
purpose of taking any action without a meeting shall be
returned to the Trust within the time specified by the
Regular Trustees;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of
Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a
meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in
the proxy. Every proxy shall be revocable at the pleasure of
the Holder of Securities executing it. Except as otherwise
provided herein, all
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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;
(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 Capital Securities
are then listed or trading, otherwise provides, the Regular
Trustees, in their sole discretion, shall establish all
other provisions relating to meetings of Holders of
Securities, including notice of the time, place or purpose
of any meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice, action by
consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or
any other matter with respect to the exercise of any such
right to vote; and
(v) any Capital Securities that are owned by the Debt Security
Issuer or any entity directly or indirectly controlling or
controlled by, or under direct or indirect common control
with, the Debt Security Issuer shall not be entitled to
vote or consent and shall, for purposes of any vote or
consent, be treated as if such Capital Securities were not
issued and outstanding.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY
TRUSTEE AND DELAWARE TRUSTEE
Section 13.1. Representations and Warranties of Property Trustee. The
--------------------------------------------------
Trustee that acts as initial Property Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Property Trustee represents and warrants, as applicable, 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 national banking association with trust
powers, duly organized, validly existing and in good standing, with trust power
and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, the Declaration;
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(b) the execution, delivery and performance by the Property Trustee
of the Declaration has been duly authorized by all necessary corporate action on
the part of the Property Trustee. The Declaration has been duly executed and
delivered by the Property Trustee, and 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);
(c) the execution, delivery and performance of the Declaration by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Property Trustee, of the Declaration.
Section 13.2. Representations and Warranties of Delaware Trustee. The
--------------------------------------------------
Trustee that acts as initial Delaware Trustee represents and warrants to the
Trust and to the Sponsor at the date of this Declaration, and each Successor
Delaware Trustee represents and warrants to the Trust and the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is a Delaware corporation, duly organized,
validly existing and in good standing, with corporate power and authority to
execute and deliver, and to carry out and perform its obligations under the
terms of, the Declaration.
(b) The Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and the Declaration. The Declaration
under Delaware law constitutes a legal, valid and binding obligation of the
Delaware Trustee, enforceable against it in accordance with its terms, subject
to applicable bankruptcy, reorganization, moratorium, insolvency, and other
similar laws affecting creditors' rights generally and to general principles of
equity and the discretion of the court (regardless of whether the enforcement of
such remedies is considered in a proceeding in equity or at law).
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee, of the Declaration.
(d) The Delaware Trustee is a natural person who is a resident of the
State of Delaware or, if not a natural person, an entity which has its principal
place of business in the State of Delaware.
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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 first class mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
Torchmark Capital Trust /(5)/ c/o Torchmark Corporation, 2001 Third Avenue
South, Birmingham, Alabama 35233 Attention: General Counsel
(5) Insert I or II, as applicable.
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as Delaware Trustee may give notice of to the
Holders of the Securities):
DELAWARE TRUSTEE
----------------
Bank One Delaware, Inc. [_____________________, Wilmington, DE________]
Attention: ______________________________
(c) if given to the Property Trustee, at its Corporate Trust Office's
mailing address set forth below (or such other address as the Property Trustee
may give notice of to the Holders of the Securities).
PROPERTY TRUSTEE
----------------
The First National Bank of Chicago, One First National Plaza, Suite
0126, Chicago, IL 60670-0126, Attention: Corporate Trust Services
Division
(d) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice to the Trust):
Torchmark Corporation, 2001 Third Avenue South, Birmingham, Alabama
35233, Attention: General Counsel
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(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 OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE PARTIES HEREUNDER OR THIS DECLARATION
ANY PROVISION OF THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE
PERTAINING TO TRUSTS THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH
THE TERMS HEREOF, (A) THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY
OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE
REQUIREMENTS TO POST BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A
TRUST, (C) THE NECESSITY FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL
CONCERNING THE ACQUISITION, HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY,
(D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A
TRUST, (E) THE ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL,
(F) RESTRICTIONS OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR
CONCENTRATION OF TRUST INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING,
STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS OR (G) THE
ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS
ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR
LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES HEREUNDER AS SET FORTH OR
REFERENCED IN THIS DECLARATION. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE
SHALL NOT APPLY TO THE TRUST.
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.
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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 Assign. 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.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
______________________, as Regular Trustee
Solely as trustee and not in an individual capacity
_____________________, as Regular Trustee
Solely as trustee and not in an individual capacity
_____________________, as Regular Trustee
Solely as trustee and not in an individual capacity
BANK ONE DELAWARE, INC., as Delaware Trustee
By:_______________________________
Name:
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By:_______________________________
Name:
Title:
TORCHMARK CORPORATION, as Sponsor
By:_______________________________
Name:
Title:
61
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ANNEX I
TERMS OF
____% TRUST [CONVERTIBLE] CAPITAL SECURITIES
_____% [CONVERTIBLE] COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust, dated
as of ____________ ____, 1999 (as amended from time to time, the "Declaration"),
the designation, rights, privileges, restrictions, preferences and other terms
and provisions of the [Convertible] Capital Securities and the [Convertible]
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1. DESIGNATION AND NUMBER.
(a) [CONVERTIBLE] CAPITAL SECURITIES. __________ [Convertible]
Capital Securities of the Trust (__________ [Convertible] Capital Securities if
the Underwriter's over-allotment option is exercised in full) with an aggregate
liquidation amount with respect to the assets of the Trust of ______________
Dollars ($__________) (_____________ Dollars ($___________) if the Underwriter's
over-allotment option is exercised in full), and a liquidation amount with
respect to the assets of $____ per [convertible] Capital Security, are hereby
designated for the purposes of identification only as "___% Trust [Convertible]
Capital Securities" (the "Capital Securities"). The Capital Security
Certificates evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Declaration, with such letters, numbers, notations,
other means of identification or designation or other changes or additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice and such legends or endorsements required by law, state exchange rule
and agreements to which the Trust is subject, if any (provided that any such
notation, legend or endorsement is in a form acceptable to the Trust).
(b) [CONVERTIBLE] COMMON SECURITIES. ________ [Convertible]
Common Securities of the Trust (_________ [Convertible] Common Securities if the
Underwriter's over-allotment option is exercised in full) with an aggregate
liquidation amount with respect to the assets of the Trust of _____________
Dollars ($_________) (_____________ Dollars ($__________) if the Underwriter's
over-allotment option is exercised in full), and a liquidation amount with
respect to the assets of the Trust of $____ per [convertible] common security,
are hereby designated for the purposes of identification only as "___%
[Convertible] Common Securities" (the "Common Securities"). The Common
Securities Certificates evidencing the Common Securities shall be in the form of
Exhibit A-2 to the Declaration, with such letters, numbers, notations, other
means of identification or designation or other changes or additions thereto or
deletions therefrom as may be required by ordinary usage, custom or practice and
such legends or endorsements required by law, state exchange rule and agreements
to which the Trust is subject, if any (provided that any such notation, legend
or endorsement is in a form acceptable to the Trust).
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2. DISTRIBUTIONS.
(a) Distributions payable on each Security will be fixed at a
rate per annum of ___% (the "Coupon Rate") of the stated liquidation amount of
$___ per Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such interest payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debt Securities held by the Property Trustee and to the extent the Property
Trustee has funds available therefor. The amount of Distributions payable for
any period will be computed for any full quarterly Distribution period on the
basis of a 360-day year of twelve 30-day months, and for any period shorter than
a full quarterly Distribution period for which Distributions are computed,
Distributions will be computed on the basis of the actual number of days elapsed
per 30-day month.
(b) Distributions on the Securities will be cumulative, will
accumulate from ____________ ____, ______ and will be payable quarterly in
arrears, on _______ ___, _________ ___, ___________ ____ and __________ ___ of
each year, commencing on _________ ___, _____, except as otherwise described
below. So long as the Debt Security Issuer shall not be in default in the
payment of interest on the Debt Securities, the Debt Security Issuer has the
right under the Indenture to defer payments of interest on the Debt Securities
by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), during which Extension Period no interest shall be due and
payable on the Debt Securities, PROVIDED THAT no Extension Period shall last
beyond the date of maturity or any redemption date of the Debt Securities. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debt Security Issuer may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity or any redemption date of the Debt Securities.
Payments of accumulated Distributions and, to the extent permitted by applicable
law, accumulated interest thereon shall be payable on the Distribution payment
date on which the relevant Extension Period terminates and shall be payable to
Holders as they appear on the books and records of the Trust at the close of
business on the record date next preceding such Distribution payment date. Upon
the termination of any Extension Period and the payment of all amounts then due,
the Debt Security Issuer may commence a new Extension Period, subject to the
above requirements. Each Extension Period, if any, will end on an interest
payment date for the Debt Securities; such date will also be a Distribution
payment date for the Securities. In the event that the Debt Security Issuer
exercises its right to defer payment of interest, then during such Extension
Period the Debt Security Issuer shall not (a) declare or pay dividends on, make
distributions with respect to, or redeem, purchase or acquire, or make a
liquidation payment with respect to, any of its capital stock, or (b) make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt
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securities issued by the Debt Security Issuer (including other junior
subordinated debt securities) that rank PARI PASSU with or junior in interest to
the Debt Securities or make any guarantee payments with respect to the foregoing
or with respect to any guarantee by the Debt Security Issuer of the debt
securities of any subsidiary of the Debt Security Issuer if such guarantee ranks
PARI PASSU with or junior in interest to the Debt Securities (other than (i) as
a result of the exchange, redemption or conversion of one class or series of the
capital stock of the Debt Security Issuer (or any capital stock of a subsidiary)
for another class or series of the capital stock of the Debt Security Issuer or
any class or series of the indebtedness of the Debt Security Issuer for any
class or series of the capital stock of the Debt Security Issuer, (ii) the
purchase of fractional interests in shares of the capital stock of the Debt
Security Issuer pursuant to the conversion or exchange provisions of such
capital stock or the security being converted into or exchanged for such capital
stock, (iii) any dividend in the form of stock, warrants, options or other
rights where the dividend stock or the stock issuable upon exercise of such
warrants, options or other rights is the same stock as that on which the
dividend is being paid or ranks PARI PASSU with or junior to such stock, (iv)
any declaration of a dividend in connection with the implementation of a
shareholders' rights plan, or the issuance of stock or other property under any
such plan in the future, or the redemption or repurchase of any such rights
pursuant thereto, (v) payments under the Securities Guarantees or under any
similar guarantee of the Debt Security Issuer for any class or series of the
capital stock of the Debt Security Issuer, and repurchases, redemptions or other
acquisitions of shares of the capital stock of the Debt Security issuer in
connection with (1) any employment contract, benefit plan or other similar
arrangement with or for the benefit of an one or more employees, officers,
directors or consultants, (2) a dividend reinvestment or shareholder stock
purchase plan or (3) the issuance of capital stock of the Debt Security Issuer
(or securities convertible or exercisable for such capital stock) as
consideration in an acquisition transaction entered into prior to such Extension
Period).
(c) Distributions on the Capital Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. While the Capital Securities remain in book-entry only
form, the relevant record dates shall be one Business Day prior to the relevant
payment dates which payment dates correspond to the interest payments dates on
the Debt Securities. Subject to any applicable laws and regulations and the
provisions of the Declaration, each such payment in respect of the Capital
Securities will be made as described under the heading "Book-Entry Only
Issuance - The Depository Trust Company" in the Prospectus Supplement dated
____________, 1999, to the Prospectus dated ____________, 1999, (together, the
"PROSPECTUS") included in the Registration Statement on Form S-3 of the Sponsor,
the Debt Security Issuer and the Trust. The relevant record dates for the Common
Securities, and, if the Capital Securities shall not continue to remain in book-
entry form, the relevant record dates for the Capital Securities, shall conform
to the rules of any securities exchange on which the securities are listed and,
if none, shall be fifteen days prior to the relevant payment dates, which
payment dates correspond to the record and interest payment dates on the Debt
Securities. The relevant record dates for the Common Securities shall be the
same record dates as for the Capital Securities. Distributions payable on any
Securities that are not punctually paid on any Distribution payment date, as a
result of the Debt Security Issuer having failed to make a payment under the
Debt Securities, will cease to be payable to the Person in whose name such
Securities are registered on the relevant record date,
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and such defaulted Distribution will instead be payable to the Person in whose
name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distributions payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in respect
of any such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on such date.
[(d) In the event of an election by the Holder to convert its
Securities through the Conversion Agent into Common Stock pursuant to the terms
of the Securities as set forth in this Annex I to the Declaration, no payment,
allowance or adjustment shall be made with respect to accumulated and unpaid
Distributions on such Securities, or be required to be made; PROVIDED, HOWEVER,
that Holders of Securities at the close of business on any record date for the
payment of Distributions will be entitled to receive the Distributions payable
on such Securities on the corresponding payment date notwithstanding the
conversion of such Securities into Common Stock following such record date;
PROVIDED, FURTHER that if the date of any redemption of related Debt Securities
falls between such record date and such corresponding payment date, the amount
of such Distribution shall include accumulated and unpaid Distributions
accumulated to but excluding such date of redemption and such payment shall be
made to the converting holder.]
(e) In the event that there is any money or other property held
by or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. LIQUIDATION DISTRIBUTION UPON DISSOLUTION. The Debt Security
Issuer will have the right at any time to cause the Trust to be dissolved with
the result that, after satisfaction of liabilities to creditors of the Trust
(including, without limitation, by paying or making reasonable provision to pay
all claims and obligations of the Trust in accordance with Section 3808(e) of
the Business Trust Act), a Like Amount of Debt Securities will be distributed on
a Pro Rata basis to the Holders of the Capital Securities and the Common
Securities in liquidation of such Holders' interests in the Trust, within 90
days following notice given to the Holders of the Capital Securities, subject to
the Regular Trustees' receipt of an opinion of independent counsel experienced
in such matters to the effect that the Holders will not recognize any income,
gain or loss for United States federal income tax purposes as a result of the
dissolution of the Trust and such distribution to Holders of Capital Securities.
In the event of any voluntary or involuntary dissolution of the Trust (each
a "Liquidation"), the Holders of the Securities on the date of the Liquidation
will be entitled to receive out of the assets of the Trust available for
distribution to Holders of Securities after satisfaction of liabilities to
creditors of the Trust (including, without limitation, by paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with Section 3808(e) of the Business Trust Act), an amount equal to
the aggregate of the stated liquidation amount of $__ per Security plus
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accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"), unless, in connection with such
Liquidation after satisfaction of liabilities to creditors of the Trust
(including, without limitation, by paying or making reasonable provision to pay
all claims and obligations of the Trust in accordance with Section 3808(e) of
the Business Trust Act), Debt Securities in an aggregate stated principal amount
equal to the aggregate stated liquidation amount of such Securities, with an
interest rate equal to the Coupon Rate of, and bearing accumulated and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on, such
Securities, shall have been distributed on a Pro Rata basis to the Holders of
the Securities in exchange for such Securities.
If, upon any such Liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Securities shall be paid on a Pro Rata basis.
If the Debt Securities are distributed to the Holders of the Securities,
pursuant to the terms of the Indenture, the Debt Security Issuer will use its
best efforts to have the Debt Securities listed on the New York Stock Exchange
or on such other exchange as the Capital Securities were listed on immediately
prior to the distribution of the Debt Securities.
4. REDEMPTION AND DISTRIBUTION.
(a) The Debt Securities will mature on _________ ___, _____, and
may be redeemed, in whole or in part, [at any time on or after ___________ ____,
_____,]. Upon the repayment of the Debt Securities in whole or in part, whether
at maturity, upon redemption or otherwise, the proceeds from such repayment or
payment shall be simultaneously applied to redeem a Like Amount of Securities at
a redemption price per Security equal to the redemption price of the Debt
Securities, together with accumulated and unpaid Distributions thereon to, but
excluding, the date of the redemption, payable in cash (the "Redemption Price").
Holders will be given not less than 30 nor more than 60 days' notice of such
redemption.
(b) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be redeemed will be as described in Section
4(f) below.
(c) If, at any time, a Tax Event or an Investment Company Event
(each, as defined below, a "Special Event") shall occur and be continuing, the
Debt Security Issuer shall have the right, upon not less than 30 nor more than
60 days' notice, to redeem the Debt Securities in whole (not in part) at a
redemption price equal to 100% of the principal amount thereof plus accumulated
and unpaid interest thereon, for cash within 90 days following the occurrence of
such Special Event. Following such redemption, a Like Amount of Securities shall
be redeemed by the Trust at the Redemption Price on a Pro Rata basis.
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"Tax Event" means that the Regular Trustees shall have received
an opinion of independent tax counsel experienced in such matters (a "Tax
Opinion") to the effect that on or after __________ ___, ____, as a result of
(a) any amendment to, clarification of, or change (including any announced
prospective change) in the laws (or any regulations thereunder) of the United
States or any political subdivision or taxing authority thereof or therein
affecting taxation, (b) any judicial decision, official administrative
pronouncement, ruling, regulatory procedure, notice or announcement, including
any notice or announcement of intent to adopt such procedures or regulations (an
"Administrative Action") or (c) any amendment to, clarification of, or change in
the official position or the interpretation of such Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental authority or
regulatory body, irrespective of the manner in which such amendment,
clarification, change or Administrative Action is made known, which amendment,
clarification, change or Administrative Action is effective or such
pronouncement or decision is announced, in each case, on or after, ________ ___,
____, there is the creation by such amendment, clarification, change or
Administrative Action of more than an insubstantial risk that (i) the Trust is,
or will be within 90 days of the date thereof, subject to United States federal
income tax with respect to income accumulated or received on the Debt
Securities, (ii) the Trust is, or will be within 90 days of the date thereof,
subject to more than a de minimis amount of taxes (other than withholding
taxes), duties or other governmental charges, or (iii) interest paid in cash by
the Debt Security Issuer to the Trust on the Debt Securities is not, or within
90 days of the date thereof will not be, deductible, in whole or in part, by the
Debt Security Issuer for United States federal income tax purposes.
Notwithstanding the foregoing, a Tax Event shall not include any change in tax
law that requires the Debt Security Issuer for United States federal income tax
purposes to defer taking a deduction for any original issue discount ("OID")
that accumulates with respect to the Debt Securities until the interest payment
related to such OID is paid by the Debt Security Issuer in cash; PROVIDED, that
such change in tax law does not create more than an insubstantial risk that the
Debt Security Issuer will be prevented from taking a deduction for OID accruing
with respect to the Debt Securities at a date that is no later than the date the
interest payment related to such OID is actually paid by the Debt Security
Issuer in cash.
"Investment Company Event" means that the Regular Trustees shall
have received an opinion of independent counsel experienced in such matters to
the effect that, as a result of the occurrence of a change (including a
prospective change) in law or regulation or a written change (including a
prospective change) in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority on or after
_________ ___, _____ (a "Change in 1940 Act Law"), there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended (the "1940 Act").
After the date fixed by the Regular Trustees for any distribution
of Debt Securities upon dissolution of the Trust: (i) the Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depositary") or its nominee (or any successor Clearing Agency or its nominee),
as the record Holder of the Capital Securities held in global form, will receive
a
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registered certificate or certificates representing the Debt Securities held in
global form to be delivered upon such distribution, and (iii) certificates
representing Securities held in definitive form, except for certificates
representing Capital Securities held by the Depositary or its nominee (or any
successor Clearing Agency or its nominee), will be deemed to represent Debt
Securities having an aggregate principal amount equal to the aggregate stated
liquidation amount of, with an interest rate identical to the Coupon Rate of,
and accumulated and unpaid interest (including Compound Interest (as defined in
the Indenture)) equal to accumulated and unpaid Distributions on such Securities
until such certificates are presented to the Debt Security Issuer or its agent
for transfer or reissue.
(d) The Trust may not redeem fewer than all the outstanding
Securities unless all accumulated and unpaid Distributions have been paid on all
Securities for all quarterly Distribution periods terminating on or prior to the
date of redemption.
(e) (i) Notice of any redemption of, or notice of distribution
of Debt Securities in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the
Trust by mail to each Holder of Securities to be
redeemed or exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or
exchange thereof which, in the case of a redemption,
will be the date fixed for redemption of the Debt
Securities. For purposes of the calculation of the date
of redemption or exchange and the dates on which
notices are given pursuant to this Section 4(e), a
Redemption/Distribution Notice shall be deemed to be
given on the day such notice is first mailed by first-
class mail, postage prepaid, or by such other means
suitable to assure delivery of such written notice, to
Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Securities
at the address of each such Holder appearing in the
books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of
either thereof with respect to any Holder of Securities
shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder of
Securities.
(ii) In addition to the Redemption/Distribution Notice to be
provided to the Holders of Securities pursuant to
clause (i) of this Section 4(e), the Debt Security
Issuer or the Trust shall give public notice of any
such redemption by the issuance of a press release
through the services of the Dow Jones Broad Tape,
Reuters News Service and Bloomberg News Service.
(f) In the event that fewer than all the outstanding Securities
are to be redeemed, the particular Capital Securities to be redeemed shall be
selected on a Pro Rata basis not more than 60 days prior to the Redemption Date
from the outstanding Capital Securities not previously called for redemption, by
such method as the Property Trustee shall deem fair and appropriate, or if the
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Capital Securities are then held in book-entry form, in accordance with the
Depositary's customary procedures, it being understood that, in respect of
Capital Securities registered in the name of and held of record by the
Depositary or its nominee (or any successor Clearing Agency or its nominee) or
any nominee, the distribution of the proceeds of such redemption will be made to
each Clearing Agency Participant (or Person on whose behalf such nominee holds
such securities) in accordance with the procedures applied by such agency or
nominee. The Property Trustee shall promptly notify the securities registrar for
the Securities in writing of the Capital Securities selected for redemption.
(g) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued for a redemption
if the Debt Securities are redeemed as set out in the Indenture (which notice
will be irrevocable), then (i) with respect to Capital Securities held in book-
entry form, by 12:00 noon, New York City time, on the redemption date, provided
that the Debt Security Issuer has paid the Property Trustee a sufficient amount
of cash in connection with the related redemption of the Debt Securities, the
Property Trustee will deposit irrevocably with the Depositary or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the applicable
Redemption Price with respect to such Capital Securities and will give the
Depository irrevocable instructions and authority to pay the Redemption Price to
the Holders of such Capital Securities, and (ii) with respect to Capital
Securities issued in definitive form and Common Securities, provided that the
Debt Security Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption of the Debt Securities, the Property
Trustee will pay the relevant Redemption Price to the Holders of such Securities
by check mailed to the address of the relevant Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given in connection with a redemption and funds deposited as
required, then from and after the required date of such deposit, distributions
will cease to accumulate on the Securities so called for redemption and all
rights of Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the Redemption Price, but
without interest on such Redemption Price. If any date fixed for redemption of
Securities is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding Business Day (and without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on such date fixed for redemption. If payment of the Redemption Price
in respect of any Securities is improperly withheld or refused and not paid
either by the Property Trustee or by the Sponsor as guarantor pursuant to the
relevant Securities Guarantee, Distributions on such Securities will continue to
accumulate from the original redemption date to the actual date of payment, in
which case the actual payment date will be considered the date fixed for
redemption for purposes of calculating the Redemption Price.
Neither the Regular Trustees nor the Trust shall be required (i)
in the event of any redemption in part, to issue, register the transfer of or
exchange any Securities during a period beginning at the opening of business 15
days before any selection for redemption of Securities and ending at the close
of business on the earliest date in which the relevant Redemption/Distribution
Notice is deemed to have been given to all holders of Securities to be so
redeemed or (ii) to register
I-8
<PAGE>
the transfer of or exchange any Securities selected for redemption, in whole or
in part, except for the unredeemed portion of any Securities being redeemed in
part.
(h) Redemption/Distribution Notices shall be sent by the Regular
Trustees on behalf of the Trust to (i) in respect of Capital Securities held in
global form, the Depositary or its nominee (or any successor Clearing Agency or
its nominee), (ii) with respect to Capital Securities held in definitive form,
to the Holders thereof, and (iii) in respect of the Common Securities, to the
Holders thereof.
(i) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws), the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding Capital
Securities by tender, in the open market or otherwise.
[5. CONVERSION RIGHTS. The Holders of Securities shall have the
right at any time, beginning ________ ___, ____ through the close of business on
________ ___, ____ (or, in the case of Securities called for redemption, prior
to the close of business on the Business Day prior to the redemption date), at
their option, to cause the Conversion Agent to convert Securities, on behalf of
the converting Holders, into shares of Common Stock in the manner described
herein on and subject to the following terms and conditions:
(a) The Securities will be convertible at the office of the
Conversion Agent into fully paid and nonassessable shares of Common Stock
pursuant to the Holder's direction to the Conversion Agent to exchange such
Securities for a portion of the Debt Securities theretofore held by the Trust on
the basis of one Security per $___ principal amount of Debt Securities, and
immediately convert such amount of Debt Securities into fully paid and
nonassessable shares of Common Stock at an initial rate of ____ shares of Common
Stock per $____ principal amount of Debt Securities (which is equivalent to a
conversion price of $_____ per share of Common Stock, subject to certain
adjustments set forth in the Indenture (as so adjusted, "Conversion Price")).
(b) In order to convert Securities into Common Stock, the Holder
shall submit to the Conversion Agent at its office an irrevocable request to
convert Securities on behalf of such Holder (the "Conversion Request"),
together, if the Securities are in certificated form, with such certificates.
The Conversion Request shall (i) set forth the number of Securities to be
converted and the name or names, if other than the Holder, in which the shares
of Common Stock should be issued and (ii) direct the Conversion Agent (a) to
exchange such Securities for a portion of the Debt Securities held by the Trust
(at the rate of exchange specified in the preceding paragraph) and (b) to
immediately convert such Debt Securities on behalf of such Holder, into Common
Stock (at the conversion rate specified in the preceding paragraph). The
Conversion Agent shall notify the Trust of the Holder's election to exchange
Securities for a portion of the Debt Securities held by the Trust and the Trust
shall, upon receipt of such notice, deliver to the Conversion Agent the
appropriate principal amount of Debt Securities for exchange in accordance with
this Section. The Conversion Agent shall thereupon notify Torchmark of the
Holder's election to convert such Debt Securities into shares of Common Stock.
Holders of Securities at the close of business on a Distribution record date
I-9
<PAGE>
will be entitled to receive the Distribution payable on such securities on the
corresponding Distribution payment date notwithstanding the conversion of such
Securities following such record date but prior to such distribution payment
date; PROVIDED, HOWEVER, that if the date of any redemption of the related Debt
Securities falls between such record date and the related Distribution payment
date, the amount of such Distribution shall include accumulated and unpaid
Distributions accumulated to but excluding such date of redemption, and such
payment shall be made to the converting Holder. Except as provided above,
neither the Trust nor the Sponsor will make, or be required to make, any
payment, allowance or adjustment upon any conversion on account of any
accumulated and unpaid Distributions accumulated on the Securities (including
any Additional Amounts accumulated thereon) surrendered for conversion, or on
account of any accumulated and unpaid dividends on the shares of Common Stock
issued upon such conversion, except to the extent that such shares are held of
record on the record date for any such distributions. Securities shall be deemed
to have been converted immediately prior to the close of business on the day on
which a Notice of Conversion relating to such Securities is received by the
Trust in accordance with the foregoing provision (the "Conversion Date"). The
Person or Persons entitled to receive Common Stock issuable upon conversion of
the Debt Securities shall be treated for all purposes as the record holder or
holders of such Common Stock at such time. As promptly as practicable on or
after the Conversion Date, Torchmark shall issue and deliver at the office of
the Conversion Agent a certificate or certificates for the number of full shares
of Common Stock issuable upon such conversion, together with the cash payment,
if any, in lieu of any fraction of any share to the Person or Persons entitled
to receive the same, unless otherwise directed by the Holder in the notice of
conversion and the Conversion Agent shall distribute such certificate or
certificates to such Person or Persons.
(c) Each Holder of a Security by his acceptance thereof appoints
_________________ as "Conversion Agent" for the purpose of effecting the
conversion of Securities in accordance with this Section. In effecting the
conversion and transactions described in this Section, the Conversion Agent
shall be acting as agent of the Holders of Securities directing it to effect
such conversion transactions. The Conversion Agent is hereby authorized (i) to
exchange Securities from time to time for Debt Securities held by the Trust in
connection with the conversion of such Securities in accordance with this
Section and (ii) to convert all or a portion of the Debt Securities into Common
Stock and thereupon to deliver such shares of Common Stock in accordance with
the provisions of this Section and to deliver to the Trust a new Debt Security
or Debt Securities for any resulting unconverted principal amount.
(d) No fractional shares of Common Stock will be issued as a
result of conversion of Securities, but in lieu thereof such fractional interest
will be paid in cash by Torchmark, in an amount based on the Closing Price of
the Common Stock on the date such Securities are surrendered for conversion, to
the Conversion Agent, which in turn will make such payment to the Holder or
Holders of Securities so converted.
(e) Torchmark shall at all times reserve and keep available out
of its authorized and unissued Common Stock, solely for issuance upon the
conversion of the Debt Securities, free from any preemptive or other similar
rights, such number of shares of Common Stock as shall from
I-10
<PAGE>
time to time be issuable upon the conversion of all the Debt Securities then
outstanding. Notwithstanding the foregoing, Torchmark shall be entitled to
deliver upon conversion of Debt Securities, shares of Common Stock reacquired
and held in the treasury of Torchmark (in lieu of the issuance of authorized and
unissued shares of Common Stock), so long as any such treasury shares are free
and clear of all liens, charges, security interests or encumbrances. Any shares
of Common Stock issued upon conversion of the Debt Securities shall be duly
authorized, validly issued and fully paid and nonassessable. The Trust shall
deliver the shares of Common Stock received upon conversion of the Debt
Securities to the converting Holder free and clear of all liens, charges,
security interests and encumbrances, except for United States withholding taxes.
Each of Torchmark and the Trust shall prepare and shall use its best efforts to
obtain and keep in force such governmental or regulatory permits or other
authorizations as may be required by law, and shall comply with all applicable
requirements as to registration or qualification of Common Stock (and all
requirements to list Common Stock issuable upon conversion of Debt Securities
that are at the time applicable), in order to enable Torchmark to lawfully issue
Common Stock to the Trust upon conversion of the Debt Securities and the Trust
to lawfully deliver Common Stock to each Holder upon conversion of the
Securities.
(f) Torchmark will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of Debt
Securities and the delivery of the shares of Common Stock by the Trust upon
conversion of the Securities. Torchmark shall not, however, be required to pay
any tax which may be payable in respect of any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that in which the
Securities so converted were registered, and no such issue or delivery shall be
made unless and until the person requesting such issue has paid to the Trust the
amount of any such tax, or has established to the satisfaction of the Trust that
such tax has been paid.
(g) Nothing in the preceding Paragraph (f) shall limit the
requirement of the Trust to withhold taxes pursuant to the terms of the
Securities or as set forth in this Annex I to the Declaration or to the
Declaration itself or otherwise require the Property Trustee or the Trust to pay
any amounts on account of such withholdings.
(h) The term "Closing Price" with respect to any security on any
day means the last reported sale price, regular way on such day, or, if no sale
takes place on such day, the average of the reported closing bid and asked
prices on such day, regular way, in either case as reported on the NYSE
Composite Tape, or, if such security is not listed or admitted to trading on the
NYSE, on the principal national securities exchange on which such security is
listed or admitted to trading, or, if such security is not listed or admitted to
trading on a national securities exchange, on the principal interdealer
quotation system on which such security is listed or admitted to trading or
quoted, or, if not listed or admitted to trading or quoted on any national
securities exchange or interdealer quotation system, the average of the closing
bid and asked prices of such security in the over-the-counter market on the day
in question as reported by the National Quotation Bureau Incorporated, or a
similar generally accepted reporting service, or, if not so available in such
manner, as furnished by any NYSE member firm selected from time to time by the
Board of Directors (or any committee
I-11
<PAGE>
duly authorized by the Board of Directors) of the Debt Security Issuer for that
purpose or, if not so available in such manner, as otherwise determined in good
faith by the Board of Directors (or any committee duly authorized by the Board
of Directors) of the Debt Security Issuer.]
6. VOTING AND OTHER RIGHTS - CAPITAL SECURITIES.
(a) Except as provided under Section 8 of this Annex I to the
Declaration and as otherwise required by law, the Capital Securities Guarantee
and the Declaration, the Holders of the Capital Securities will not have voting
rights.
(b) Subject to the requirements set forth in this paragraph, the
Holders of a Majority in liquidation amount of the Capital Securities then
outstanding, voting separately as a class, may direct the time, method, and
place of conducting any proceeding for any remedy available to the Property
Trustee, or may direct the exercise of any trust or power conferred upon the
Property Trustee under the Declaration, including the right to direct the
Property Trustee, as holder of the Debt Securities, to (i) exercise the remedies
available under the Indenture with respect to the Debt Securities, (ii) waive
any past default and its consequences that are waivable under the Indenture,
(iii) exercise any right to rescind or annul a declaration that the principal of
all the Debt Securities shall be due and payable, or (iv) in accordance with
Section 8 hereof, consent to any amendment, modification or termination of the
Indenture where consent is required, PROVIDED, HOWEVER, that if an Event of
Default under the Indenture has occurred and is continuing then the holders of
25% of the aggregate liquidation amount of the Capital Securities then
outstanding may direct the Property Trustee to declare the principal of and
interest on the Debt Securities immediately due and payable; and PROVIDED,
FURTHER, that, where a consent under the Indenture would require the consent or
act of the Holders of greater than a majority of the Holders in principal amount
of Debt Securities then outstanding (a "Super Majority") affected thereby, the
Property Trustee may only give such consent or take such action at the written
direction of the Holders of at least the proportion in liquidation amount of the
Capital Securities which the relevant Super Majority represents of the aggregate
principal amount of the Debt Securities then outstanding. The Property Trustee
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Capital Securities. Other than with respect to directing the
time, method and place of conducting any remedy available to the Property
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Capital Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel experienced in such matters to the effect that for
United States federal income tax purposes, such action will not cause the Trust
to be classified as other than a grantor trust. If the Property Trustee fails to
enforce its rights under the Debt Securities, any Holder of Capital Securities
may institute a legal proceeding against any person to enforce the Property
Trustee's rights under the Debt Securities. If an Event of Default has occurred
and is continuing and such event is attributable to the failure of the Debt
Security Issuer to pay interest or principal on the Debt Securities on the date
such interest or principal is otherwise payable (or in the case of redemption,
on the redemption date), then a Holder of Capital Securities may directly
institute a proceeding for enforcement of payment to such Holder of the
principal of or interest on the Debt Securities having a principal amount equal
to the aggregate liquidation amount
I-12
<PAGE>
of the Capital Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debt Securities. In connection with such
Direct Action, the rights of the Holders of Common Securities will be subrogated
to the rights of such Holder of Capital Securities to the extent of any payment
made by the Issuer to such Holder of Capital Securities in such Direct Action.
Except as provided in the preceding sentences, the Holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the Debt Securities.
The Property Trustee shall notify all Holders of the Capital
Securities of any notice of default received from the trustee under the
Indenture with respect to the Debt Securities. Such notice shall state that such
event of default also constitutes and Event of Default under the Declaration.
Any approval or direction of Holders of Capital Securities may be
given at a separate meeting of Holders of Capital Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will
be required for the Trust to redeem and cancel Capital Securities or to
distribute the Debt Securities in accordance with the Declaration and the terms
of the Securities.
Notwithstanding that Holders of Capital Securities are entitled
to vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
7. VOTING RIGHTS - COMMON SECURITIES.
(a) Except as provided under Sections 7(b), 7(c) and 8 of this
Annex I of the Declaration and as otherwise required by law and the Declaration,
the Holders of the Common Securities will not have voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after any
Event of Default with respect to the Capital Securities has been cured, waived,
or otherwise eliminated and subject to
I-13
<PAGE>
the requirements of the second to last sentence of this paragraph, the Holders
of a Majority in liquidation amount of the Common Securities, voting separately
as a class, may direct the time, method, and place of conducting any proceeding
for any remedy available to the Property Trustee, or exercising any trust or
power conferred upon the Property Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debt Security Trustee, or exercising any trust or power
conferred on the Debt Security Trustee with respect to the Debt Securities, (ii)
waive any past default and its consequences that are waivable under the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Debt Securities shall be due and payable, PROVIDED THAT,
where a consent or action under the Indenture would require the consent or act
of the relevant Super Majority, the Property Trustee may only give such consent
or take such action at the written direction of the Holders of at least the
proportion in liquidation amount of the Common Securities which the relevant
Super Majority represents of the aggregate principal amount of the Debt
Securities outstanding. The Property Trustee shall not revoke any action
previously authorized or approved by a vote of the Holders of the Capital
Securities. Other than with respect to directing the time, method and place of
conducting any remedy available to the Property Trustee or the Debt Security
Trustee as set forth above, the Property Trustee shall not take any action in
accordance with the directions of the Holders of the Common Securities under
this paragraph unless the Property Trustee has obtained an opinion of
independent tax counsel experienced in such matters to the effect that for
United States federal income tax purposes, such action will not cause the Trust
to be classified as other than a grantor trust. If the Property Trustee fails to
enforce its rights under the Declaration, any Holder of Common Securities may
institute a legal proceeding directly against any Person to enforce the Property
Trustee's rights under the Declaration, without first instituting a legal
proceeding against the Property Trustee or any other Person.
Any approval or direction of Holders of Common Securities may be
given at a separate meeting of Holders of Common Securities convened for such
purpose, at a meeting of all of the Holders of Securities in the Trust or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute the Debt Securities in accordance with the Declaration and the terms
of the Securities.
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<PAGE>
8. AMENDMENTS TO DECLARATION AND INDENTURE.
(a) In addition to any requirements under Section 12.1 of the
Declaration, if any proposed amendment to the Declaration provides for, or the
Regular Trustees otherwise propose to effect, (i) any action that would
adversely affect the powers, preferences or special rights of the Securities,
whether by way of amendment to the Declaration or otherwise, or (ii) the
dissolution, winding-up or termination of the Trust, other than as described in
Section 8.1 of the Declaration, then the Holders of outstanding Securities
voting together as a single class, will be entitled to vote on such amendment or
proposal (but not on any other amendment or proposal) and such amendment or
proposal shall not be effective except with the approval of the Holders of at
least a Majority in liquidation amount of the Securities then outstanding
affected thereby; PROVIDED, HOWEVER, if any amendment or proposal referred to in
clause (i) above would adversely affect only the Capital Securities or only the
Common Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities then outstanding.
(b) In the event the consent of the Property Trustee as the
holder of the Debt Securities is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Debt
Securities, the Property Trustee shall request the written direction of the
Holders of the Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in liquidation amount of the Securities
then outstanding, voting together as a single class; PROVIDED, HOWEVER, that
where a consent under the Indenture would require the consent of the relevant
Super Majority, the Property Trustee may only give such consent at the direction
of the Holders of at least the proportion in liquidation amount of the
Securities then outstanding which the relevant Super Majority represents of the
aggregate principal amount of the Debt Securities then outstanding; PROVIDED,
FURTHER, that the Property Trustee shall not take any action in accordance with
the directions of the Holders of the Securities under this Section 8(b) unless
the Property Trustee has obtained an opinion of independent tax counsel
experienced in such matters to the effect that for United States federal income
tax purposes, such action will not cause the Trust to be classified as other
than a grantor trust.
9. PRO RATA. A reference in these terms of the Securities to any
distribution or treatment as being "Pro Rata" shall mean pro rata to each Holder
of Securities according to the aggregate liquidation amount of the Securities
held by the relevant Holder in relation to the aggregate liquidation amount of
all Securities outstanding unless, in relation to a payment, an Event of Default
under the Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first in cash to each Holder of the
Capital Securities pro rata according to the aggregate liquidation amount of
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of Common Securities pro rata according to the aggregate liquidation
amount of Common Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Common Securities outstanding.
I-15
<PAGE>
10. RANKING. The Capital Securities rank PARI PASSU and payment
thereon shall be made Pro Rata with the Common Securities except that, where an
Event of Default occurs and is continuing, the rights of Holders of the Common
Securities to payment in respect of Distributions and payments upon liquidation,
redemption and otherwise are subordinated to the rights to payment of the
Holders of the Capital Securities.
[11. LISTING. The Regular Trustees shall use their best efforts to
cause the Capital Securities to be listed on the New York Stock Exchange.]
12. ACCEPTANCE OF SECURITIES GUARANTEE AND INDENTURE. Each Holder of
Capital Securities and Common Securities, by the acceptance thereof, agrees to
the provisions of the Capital Securities Guarantee and the Common Securities
Guarantee, respectively, including the subordination provisions therein and to
the provisions of the Indenture.
13. NO PREEMPTIVE RIGHTS. The Holders of the Securities shall have
no preemptive rights to subscribe for any additional securities.
14. MISCELLANEOUS. These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the Capital Securities
Guarantee or the Common Securities Guarantee (as may be appropriate), and the
Indenture to a Holder without charge on written request to the Sponsor at its
principal place of business.
15. GOVERNING LAW. These terms 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 principals of conflict of laws.
I-16
<PAGE>
EXHIBIT A-1
FORM OF [CONVERTIBLE] CAPITAL SECURITY CERTIFICATE
IF THE [CONVERTIBLE] CAPITAL SECURITY IS TO BE A GLOBAL CERTIFICATE INSERT -
THIS [CONVERTIBLE] CAPITAL SECURITY IS A GLOBAL CERTIFICATE WITHIN THE MEANING
OF THE DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "DEPOSITARY") OR A NOMINEE OF THE DEPOSITARY. THIS
[CONVERTIBLE] CAPITAL SECURITY IS EXCHANGEABLE FOR [CONVERTIBLE] CAPITAL
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND NO
TRANSFER OF THIS [CONVERTIBLE] CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS
[CONVERTIBLE] CAPITAL SECURITY AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER
NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS [CONVERTIBLE] CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW
YORK) TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY [CONVERTIBLE] CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] CAPITAL SECURITIES:
CUSIP NO.:
A1-1
<PAGE>
Certificate Evidencing [Convertible] Capital Securities
of
Torchmark Capital Trust /(6)/
____% Trust [Convertible] Capital Securities
(liquidation amount $___ per Trust [Convertible] Capital Security)
Torchmark Capital Trust /(6)/, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that
____________________ (the "Holder") is the registered owner of [convertible]
capital securities of the Trust representing undivided beneficial interests in
the assets of the Trust designated the ___% Trust [Convertible] Capital
Securities (liquidation amount $____ per Trust [Convertible] Capital Security)
(the "Capital Securities"). The Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Capital Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust, dated as of ___________ ___, _____, as the
same may be amended from time to time (the "Declaration"), including the
designation of the terms of the Capital Securities as set forth in Annex I to
the Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the Capital
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Capital Securities Guarantee and the Indenture to
the Holder without charge upon written request to the Trust at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and the Capital Securities Guarantee is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Capital Securities as
evidence of indirect beneficial ownership in the Debt Securities.
Unless the Property Trustee's Certificate of Authentication hereon has been
properly executed, these Capital Securities shall not be entitled to any benefit
under the Declaration or be valid or obligatory for any purpose.
(6) Insert I or II, as applicable.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of __________, _____.
Torchmark Capital Trust /(7)/
By:_____________________________________
Name:
Title: Trustee solely as trustee and not
in his individual capacity
(7) Insert I or II, as applicable.
Guaranteed to the extent set forth in the Capital
Securities Guarantee dated _____________________,
1999.
Torchmark Corporation
By:_____________________________________
Name:
Title:
Authenticated by
The First National Bank of Chicago
A1-3
<PAGE>
{FORM OF CERTIFICATE OF AUTHENTICATION}
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the within-mentioned
Declaration.
Dated: _____________ ____, _____
_______________________,
as Property Trustee
or as Authentication Agent
By:_________________________________ By:_________________________________
Authorized Signatory Authorized Signatory
{FORM OF REVERSE OF SECURITY}
Distributions payable on each Capital Security will be fixed at a rate per
annum of ____% (the "Coupon Rate") of the stated liquidation amount of $___ per
Capital Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debt Securities held by the Property Trustee
and to the extent the Property Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accumulate from __________ ___, _____ and
will be payable quarterly in arrears, on ________ ____, _________ ____, ________
___ and ________ ___ of each year, commencing on ________ ___, _______, which
payment dates shall correspond to the interest payment dates on the Debt
Securities, to Holders of record at the close of business on the regular record
date for such Distribution which shall be the close of business 15 days prior to
such Distribution payment date unless otherwise provided in the Declaration. The
Debt Security Issuer has the right under the Indenture to defer payments of
interest by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"); PROVIDED THAT no Extension Period shall last beyond the
date of the maturity or any redemption date of the Debt Securities and, as a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with interest
A1-4
<PAGE>
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly during any such Extension Period. Prior to the termination
of any such Extension Period, the Debt Security Issuer may further extend such
Extension Period; PROVIDED THAT such Extension Period together with all such
previous and further extensions thereof may not exceed 20 consecutive quarters
or extend beyond the maturity or any redemption date of the Debt Securities.
Upon the termination of any Extension Period and the payment of all amounts then
due, the Debt Security Issuer may commence a new Extension Period, subject to
the above requirements.
The Capital Securities shall be redeemable as provided in the Declaration.
[The Capital Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Capital Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the terms set forth
in the Declaration.]
A1-5
<PAGE>
[CONVERSION REQUEST]
[To: _______________________________, as Property Trustee of Torchmark Capital
Trust I
The undersigned owner of these Capital Securities hereby irrevocably
exercises the option to convert these Capital Securities, or the portion below
designated, into Common Stock of Torchmark Corporation (the "Common Stock") in
accordance with the terms of the Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ___________ ___, _____, by __________________,
___________________ and ___________________, as Regular Trustees, _____________,
as Delaware Trustee, _________________________, as Property Trustee, Torchmark
Corporation, as Sponsor, and by the Holders, from time to time, of individual
beneficial interests in the Trust to be issued pursuant to the Declaration.
Pursuant to the aforementioned exercise of the option to convert these Capital
Securities, the undersigned hereby directs the Conversion Agent (as that term is
defined in the Declaration) to (i) exchange such Capital Securities for a
portion of the Debt Securities (as that term is defined in the Declaration) held
by the Trust (at the rate of exchange specified in the terms of the Capital
Securities set forth as Annex I to the Declaration) and (ii) immediately convert
such Debt Securities on behalf of the undersigned, into Common Stock (at the
conversion rate specified in the terms of the Capital Securities set forth as
Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.]
[Date: _______________, ____
in whole _____ in part _____
Number of Capital Securities to be converted:
--------------------------------------------
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are to be
issued, along with the address or addresses of such person or persons
Signature
Please Print or Typewrite Name and Address, Including Zip Code,
and Social Security or Other Identifying Number
Signature Guarantee:* ___________________________________________
A1-6
<PAGE>
* (Signature must be guaranteed by an "eligible guarantor institution," that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
A1-7
<PAGE>
{FORM OF ASSIGNMENT FOR DEFINITIVE CAPITAL SECURITY}
For value received ___________________________________________ hereby
sell(s), assign(s) and transfer(s) unto ______________________________________
(Please insert social security or other taxpayer identification number of
assignee.) the within security and hereby irrevocably constitutes and appoints
___________ attorney to transfer the said security on the books of the Company,
with full power of substitution in the premises.
Dated:
- ------
Signature(s) ______________________________________________________
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
* (Signature must be guaranteed by an "eligible guarantor institution," that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A1-8
<PAGE>
SCHEDULE I
CHANGES TO NUMBER OF CAPITAL SECURITIES IN GLOBAL SECURITY
Number of Capital
Securities by which this
Global Security Is To Be Remaining Capital
Reduced or Increased, Securities Represented
and Reason for by this
Date Reduction or Increase Global Security Notation Made By
- ---- --------------------- --------------- ----------------
A1-9
<PAGE>
EXHIBIT A-2
{FORM OF [CONVERTIBLE] COMMON SECURITY CERTIFICATE}
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD UNLESS SUCH OFFER AND SALE ARE REGISTERED UNDER OR ARE
EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT. THE TRANSFER OF THE SECURITY
EVIDENCED HEREBY IS ALSO SUBJECT TO THE RESTRICTIONS SET FORTH IN THE
DECLARATION REFERRED TO BELOW.
CERTIFICATE NUMBER:
NUMBER OF [CONVERTIBLE] COMMON SECURITIES:
Certificate Evidencing [Convertible] Common Securities
of
Torchmark Capital Trust I
____% [Convertible] Common Securities
(liquidation amount $____ per [Convertible] Common Security)
Torchmark Capital Trust I, a statutory business trust formed under the laws
of the State of Delaware (the "Trust"), hereby certifies that
________________________________________ (the "Holder") is the registered owner
of [convertible] common securities of the Trust representing undivided
beneficial interests in the assets of the Trust designated the ___%
[Convertible] Common Securities (liquidation amount $____ per [Convertible]
Common Security) (the "Common Securities"). The Common Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer.
The designation, rights, privileges, restrictions, preferences and other
terms and provisions of the Common Securities represented hereby are issued and
shall in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of __________ ___, _____, as the same
may be amended from time to time (the "Declaration"), including the designation
of the terms of the Common Securities as set forth in Annex I to the
Declaration.
Capitalized terms used herein but not defined shall have the meaning given
them in the Declaration. The Holder is entitled to the benefits of the Common
Securities Guarantee to the extent provided therein. The Sponsor will provide a
copy of the Declaration, the Common Securities
A2-1
<PAGE>
Guarantee and the Indenture to a Holder without charge upon written request to
the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debt Securities as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Debt Securities.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of ________, _____.
Torchmark Capital Trust I
By:_____________________________________________
Name:
Title: Trustee solely as trustee and not in
his individual capacity
A2-2
<PAGE>
{FORM OF REVERSE OF SECURITY}
Distributions payable on each Common Security will be fixed at a rate per
annum of ___% (the "Coupon Rate") of the stated liquidation amount of $____ per
Common Security, such rate being the rate of interest payable on the Debt
Securities to be held by the Property Trustee. Distributions in arrears for more
than one quarter will bear interest thereon compounded quarterly at the Coupon
Rate (to the extent permitted by applicable law). The term "Distributions" as
used herein includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the extent that
payments are made in respect of the Debt Securities held by the Property Trustee
and to the extent the Property Trustee has funds available therefor. The amount
of Distributions payable for any period will be computed for any full quarterly
Distribution period on the basis of a 360-day year of twelve 30-day months, and
for any period shorter than a full quarterly Distribution period for which
Distributions are computed, Distributions will be computed on the basis of the
actual number of days elapsed per 30-day month.
Except as otherwise described below, Distributions on the Common Securities
will be cumulative, will accumulate from __________ ___, ____ and will be
payable quarterly in arrears, on _______ ___, ________ ___, _______ ___ and
________ ___ of each year, commencing on _________ ___, ____, which payment
dates shall correspond to the interest payment dates on the Debt Securities, to
Holders of record at the close of business on the regular record date for such
Distribution which shall be the close of business 15 days prior to such
Distribution payment date unless otherwise provided in the Declaration. The Debt
Security Issuer has the right under the Indenture to defer payments of interest
by extending the interest payment period from time to time on the Debt
Securities for a period not exceeding 20 consecutive quarters (each an
"Extension Period"), PROVIDED THAT no Extension Period shall last beyond the
date of maturity of the Debt Securities and, as a consequence of such deferral,
Distributions will also be deferred. Despite such deferral, quarterly
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law) at the Coupon Rate compounded quarterly during any
such Extension Period. Prior to the termination of any such Extension Period,
the Debt Security Issuer may further extend such Extension Period; PROVIDED THAT
such Extension Period together with all such previous and further extensions
thereof may not exceed 20 consecutive quarters or extend beyond the date of
maturity of the Debt Securities. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debt Security Issuer may commence a
new Extension Period, subject to the above requirements.
The Common Securities shall be redeemable as provided in the Declaration.
[The Common Securities shall be convertible into shares of Common Stock,
through (i) the exchange of Common Securities for a portion of the Debt
Securities and (ii) the immediate conversion of such Debt Securities into Debt
Security Issuer Common Stock, in the manner and according to the term set forth
in the Declaration.]
A2-3
<PAGE>
[CONVERSION REQUEST]
[To: ______________________________, as Property Trustee of Torchmark Capital
Trust I
The undersigned owner of these Common Securities hereby irrevocably
exercises the option to convert these Common Securities, or the portion below
designated, into Common Stock of Torchmark Capital Corporation (the "Common
Stock") in accordance with the terms of the Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _________ ___, ____, by ________________,
___________________ and ______________________, as Regular Trustees, __________,
Delaware Trustee, ________________________, as Property Trustee, Torchmark
Capital Corporation, as Sponsor, and by the Holders, from time to time, of
individual beneficial interests in the Trust to be issued pursuant to the
Declaration. Pursuant to the aforementioned exercise of the option to convert
these Common Securities, the undersigned hereby directs the Conversion Agent (as
that term is defined in the Declaration) to (i) exchange such Common Securities
for a portion of the Debt Securities (as that term is defined in the
Declaration) held by the Trust (at the rate of exchange specified in the terms
of the Common Securities set forth as Annex I to the Declaration) and (ii)
immediately convert such Debt Securities on behalf of the undersigned, into
Common Stock (at the conversion rate specified in the terms of the Common
Securities set forth as Annex I to the Declaration).
The undersigned does also hereby direct the Conversion Agent that the
shares issuable and deliverable upon conversion, together with any check in
payment for fractional shares, be issued in the name of and delivered to the
undersigned, unless a different name has been indicated in the assignment below.
If shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer taxes payable with respect thereto.]
[Date: _______________, ____
in whole _____ in part _____
Number of Common Securities to be converted: ____________________
If a name or names other than the undersigned, please indicate in the
spaces below the name or names in which the shares of Common Stock are to
be issued, along with the address or addresses of such person or persons
Signature
Please Print or Typewrite Name and Address, Including Zip Code,
and Social Security or Other Identifying Number
Signature Guarantee:* ___________________________________________
A2-4
<PAGE>
* (Signature must be guaranteed by an "eligible guarantor institution," that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)]
A2-5
<PAGE>
FORM OF ASSIGNMENT FOR SECURITY [OR
COMMON STOCK ISSUABLE UPON CONVERSION] THEREOF
For value received ________________________________________ hereby sell(s),
assign(s) and transfer(s) unto _______________________________________________
(Please insert social security or other taxpayer identification number of
assignee.) the within security and hereby irrevocably constitutes and appoints
___________ attorney to transfer the said security on the books of ____________,
with full power of substitution in the premises.
Dated:
- ------
Signature(s)
- ------------
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
* (Signature must be guaranteed by an "eligible guarantor institution," that is,
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.)
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBT SECURITY
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
<PAGE>
Exhibit 4.7
TORCHMARK CORPORATION
and
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
Junior Subordinated Indenture
Dated as of ________ __, ____
<PAGE>
CROSS REFERENCE SHEET*
Between
Provisions of Trust Indenture Act (as defined herein) and Junior
Subordinated Indenture dated as of ________ __, ____ between TORCHMARK
CORPORATION and The First National Bank of Chicago, a national banking
association, as Trustee:
<TABLE>
<CAPTION>
SECTION OF THE ACT SECTION OF INDENTURE
- ------------------ --------------------
<S> <C>
310(a)(1) and (2) 6.9
310(a)(3) and (4) Inapplicable
310(b) 6.8 and 6.10(a), (b) and (d)
310(c) Inapplicable
311(a) 6.14
311(b) 6.14
311(c) Inapplicable
312(a) 4.1 and 4.2
312(b) 4.2
312(c) 4.2
313(a) 4.3
313(b)(1) Inapplicable
313(b)(2) 4.3
313(c) 4.3, 5.11, 6.10, 6.11, 8.2 and 12.2
313(d) 4.3
314(a) 3.5 and 4.2
314(b) Inapplicable
314(c)(1) and (2) 11.5
314(c)(3) Inapplicable
314(d) Inapplicable
314(e) 11.5
314(f) Inapplicable
315(a), (c) and (d) 6.1
315(b) 5.11
315(e) 5.12
316(a)(1) 5.9 and 5.10
316(a)(2) Not required
316(a) (last sentence) 7.4
316(b) 5.7
317(a) 5.2
317(b) 3.4(a) and (b)
318(a) 11.7
</TABLE>
*This Cross Reference Sheet is not part of the Indenture.
i
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
ARTICLE I
DEFINITIONS
<S> <C>
Section 1.1 Certain Terms Defined.................................................... 1
ARTICLE II
SECURITIES
Section 2.1 Forms Generally.......................................................... 7
Section 2.2 Form of Trustee's Certificate of Authentication.......................... 8
Section 2.3 Amount Unlimited; Issuable in Series..................................... 8
Section 2.4 Authentication and Delivery of Securities................................ 11
Section 2.5 Execution of Securities.................................................. 14
Section 2.6 Certificate of Authentication............................................ 14
Section 2.7 Denomination and Date of Securities; Payment of Interest................. 15
Section 2.8 Registration, Transfer and Exchange...................................... 15
Section 2.9 Mutilated, Defaced, Destroyed, Lost And Stolen Securities................ 18
Section 2.10 Cancellation of Securities; Destruction Thereof.......................... 19
Section 2.11 Temporary Securities..................................................... 20
Section 2.12 CUSIP Numbers............................................................ 20
ARTICLE III
COVENANTS OF THE ISSUER
Section 3.1 Payment of Principal and Interest........................................ 20
Section 3.2 Offices for Payments, Etc................................................ 21
Section 3.3 Appointment to Fill a Vacancy in Office of Trustee....................... 22
Section 3.4 Paying Agents............................................................ 22
Section 3.5 Compliance Certificates.................................................. 23
Section 3.6 Corporate Existence...................................................... 23
Section 3.7 Maintenance of Properties................................................ 23
Section 3.8 Payment of Taxes and Other Claims........................................ 24
ARTICLE IV
SECURITYHOLDER LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
Section 4.1 Issuer to Furnish Trustee Information As to Names and
Addresses of Securityholders............................................. 24
Section 4.2 Reports by the Issuer.................................................... 24
Section 4.3 Reports by the Trustee................................................... 24
</TABLE>
ii
<PAGE>
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
<TABLE>
<CAPTION>
<S> <C>
Section 5.1 Event of Default Defined, Acceleration of Maturity; Waiver of Default............. 26
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt..................... 29
Section 5.3 Application of Proceeds........................................................... 31
Section 5.4 Suits for Enforcement............................................................. 32
Section 5.5 Restoration of Rights on Abandonment of Proceedings............................... 32
Section 5.6 Limitations on Suits by Security Holders.......................................... 32
Section 5.7 Unconditional Right of Securityholders to Institute Certain Suits................. 33
Section 5.8 Powers and Remedies Cumulative; Delay or Omission
Not Waiver Of Default............................................................. 33
Section 5.9 Control by Holders of Securities.................................................. 33
Section 5.10 Waiver of past Defaults........................................................... 34
Section 5.11 Trustee to Give Notice of Default, But May Withhold in Certain
Circumstances..................................................................... 34
Section 5.12 Right of Court to Require Filing of Undertaking to Pay Costs...................... 35
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties and Responsibilities of the Trustee; During Default; Prior to Default...... 35
Section 6.2 Certain Rights of the Trustee..................................................... 36
Section 6.3 Trustee Not Responsible for Recitals, Disposition of Securities or
Application of Proceeds Thereof................................................... 38
Section 6.4 Trustee and Agents May Hold Securities or Coupons; Collections, Etc............... 38
Section 6.5 Moneys Held by Trustee............................................................ 38
Section 6.6 Compensation and Indemnification of Trustee and its Prior Claim................... 38
Section 6.7 Right of Trustee to Rely on Officer's Certificate, Etc............................ 38
Section 6.8 Indentures Not Creating Potential Conflicting Interests for the Trustee........... 39
Section 6.9 Qualification of Trustee: Conflicting Interests................................... 39
Section 6.10 Persons Eligible for Appointment as Trustee....................................... 39
Section 6.11 Resignation and Removal; Appointment of Successor Trustee......................... 39
Section 6.12 Acceptance of Appointment by Successor Trustee.................................... 41
Section 6.13 Merger, Conversion, Consolidation Or Succession to Business of Trustee............ 42
Section 6.14 Preferential Collection of Claims Against the Issuer.............................. 42
Section 6.15 Appointment of Authenticating Agent............................................... 42
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
Section 7.1 Evidence of Action Taken by Securityholders........................................ 43
Section 7.2 Proof of Execution of Instruments And of Holding of Securities..................... 44
Section 7.3 Holders to Be Treated as Owners.................................................... 44
</TABLE>
iii
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding.................................. 44
Section 7.5 Right of Revocation of Action Taken................................................ 45
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Securityholders......................... 45
Section 8.2 Supplemental Indentures with Consent of Securityholders............................ 46
Section 8.3 Effect of Supplemental Indenture................................................... 48
Section 8.4 Documents to Be Given to Trustee................................................... 48
Section 8.5 Notation on Securities in Respect of Supplemental Indentures....................... 48
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Issuer May Consolidate, Etc., Only On Certain Terms................................ 48
Section 9.2 Successor Corporation Substituted.................................................. 49
Section 9.3 Opinion of Counsel to Be Given Trustee............................................. 49
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
Section 10.1 Satisfaction and Discharge of Indenture........................................... 50
Section 10.2 Application by Trustee of Funds Deposited for Payment of Securities.............. 54
Section 10.3 Repayment of Moneys Held by Paying Agent.......................................... 55
Section 10.4 Return of Moneys Held by Trustee And Paying Agent Unclaimed
For Two Years..................................................................... 55
Section 10.5 Indemnity for U.S. Government Obligations......................................... 55
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Incorporators, Shareholders, Officers and Directors of Issuer Exempt
from Individual Liability......................................................... 55
Section 11.2 Provisions of Indenture for the Sole Benefit of Parties and Holders of
Securities and Coupons............................................................ 56
Section 11.3 Successors and Assigns of Issuer Bound by Indenture............................... 56
Section 11.4 Notices and Demands on Issuer, Trustee and Holders of Securities
And Coupons....................................................................... 56
Section 11.5 Officer's Certificates and Opinions of Counsel; Statements to Be
Contained Therein................................................................. 57
Section 11.6 Payments Due on Saturdays, Sundays And Holidays................................... 58
Section 11.7 Conflict of Any Provision of Indenture with Trust Indenture Act................... 58
Section 11.8 New York Law to Govern............................................................ 58
</TABLE>
iv
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Section 11.9 Counterparts..................................................................... 58
Section 11.10 Effect of Headings............................................................... 58
Section 11.11 Securities in a Composite Currency, Currency Unit, Foreign Currency
Or in ECU........................................................................ 58
Section 11.12 Judgment Currency................................................................ 59
ARTICLE XII
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.1 Applicability of Article......................................................... 60
Section 12.2 Notice of Redemption; Partial Redemptions........................................ 60
Section 12.3 Payment of Securities Called for Redemption...................................... 61
Section 12.4 Exclusion of Certain Securities from Eligibility for Selection for Redemption.... 62
Section 12.5 Mandatory and Optional Sinking Funds............................................. 62
ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1 Securities Subordinate to Senior Indebtedness.................................... 64
Section 13.2 No Payment When Senior Indebtedness in Default; Payment over of
Proceeds Upon Dissolution, Etc................................................... 64
Section 13.3 Payment Permitted If No Default.................................................. 66
Section 13.4 Subrogation to Rights of Holders of Senior Indebtedness.......................... 66
Section 13.5 Provisions Solely to Define Relative Rights...................................... 67
Section 13.6 Trustee to Effectuate Subordination.............................................. 67
Section 13.7 No Waiver of Subordination Provisions............................................ 67
Section 13.8 Notice to Trustee................................................................ 67
Section 13.9 Reliance on Judicial Order or Certificate of Liquidation Agent................... 68
Section 13.10 Trustee Not Fiduciary for Holders of Senior Indebtedness......................... 68
Section 13.11 Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights................................................................. 68
Section 13.12 Article Applicable to Paying Agents.............................................. 69
</TABLE>
v
<PAGE>
THIS JUNIOR SUBORDINATED INDENTURE (this "Indenture") is dated as of
________ __,1999, by and between TORCHMARK CORPORATION, a Delaware corporation
(the "Issuer"), and The First National Bank of Chicago, a national banking
association, as trustee (the "Trustee").
W I T N E S S E T H:
WHEREAS, the Issuer has duly authorized the issue from time to time of its
unsecured junior subordinated debentures, notes or other evidences of
indebtedness to be issued in one or more series (the "Securities") up to such
principal amount or amounts as may from time to time be authorized in accordance
with the terms of this Indenture, including Securities issued to evidence loans
made to the Issuer of the proceeds from the issuance from time to time by one or
more business trusts (each an "Issuer Trust") of undivided preferred beneficial
interests in the assets of such Issuer Trusts and undivided common beneficial
interests in the assets of such Issuer Trusts (collectively, the "Trust
Securities"), and to provide the terms and conditions upon which the Securities
are to be authenticated, issued and delivered;
WHEREAS, the Issuer has duly authorized the execution and delivery of this
Indenture to provide, among other things, for the authentication, delivery and
administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture and
agreement according to its terms have been done.
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by the
holders thereof, the Issuer and the Trustee mutually covenant and agree for the
equal and proportionate benefit of the respective holders from time to time of
the Securities and of the coupons, if any, appertaining thereto as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined. The terms set forth in this Section
---------------------
1.1 (except as otherwise expressly provided or unless the context otherwise
clearly requires) for all purposes of this Indenture and of any indenture
supplemental hereto shall have the respective meanings specified in this
Section. All other terms used in this Indenture that are defined in the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), or the
definitions of which in the Securities Act of 1933, as amended (the "Securities
Act"), are referred to in the Trust Indenture Act, including terms defined
therein by reference to the Securities Act (except as herein otherwise expressly
provided or unless the context otherwise requires), shall have the meaning
assigned to such terms in the Trust Indenture Act and in the Securities Act as
in effect from time to time. All accounting terms used herein and not expressly
defined shall have the meanings assigned to such terms in accordance with
generally accepted accounting principles, and the term "generally accepted
accounting principles" means such accounting principles as are generally
accepted at the time of any computation unless a
1
<PAGE>
different time shall be specified with respect to such series of Securities as
provided for in Section 2.3. The words "herein," "hereof" and "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision. The terms defined in this
Article have the meanings assigned to them in this Article and include the
plural as well as the singular.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor provision.
"Authenticating Agent" shall have the meaning set forth in Section 6.15.
"Authorized Newspaper" means a newspaper (which, in the case of The City of
New York, will, if practicable, be THE WALL STREET JOURNAL (Eastern Edition),
and in the case of the United Kingdom of Great Britain and Northern Ireland (the
"United Kingdom"), will, if practicable, be THE FINANCIAL TIMES (London
Edition)) published in an official or common language of the country of
publication customarily published at least once a day for at least five days in
each calendar week and of general circulation in The City of New York or the
United Kingdom, as applicable. If it shall be impractical in the opinion of the
Trustee to make any publication of any notice required hereby in an Authorized
Newspaper, any publication or other notice in lieu thereof which is made or
given with the approval of the Trustee shall constitute a sufficient publication
of such notice.
"Board of Directors" means either the Board of Directors of the Issuer or
any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified by
the secretary or an assistant secretary of the Issuer to have been duly adopted
or consented to by the Board of Directors and to be in full force and effect,
and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that is not a day
on which banking institutions in the city (or in any of the cities, if more than
one) in which amounts are payable, as specified in the form of such Security,
are authorized or required by any applicable law or regulation to be closed.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution and delivery of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, as of the date of this Indenture,
located at One North State, 9th Floor, Chicago, IL 60602.
"Coupon" means any interest coupon appertaining to an Unregistered
Security.
"Covenant Defeasance" shall have the meaning set forth in Section 10.1(C).
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"Debt" means, with respect to any Person, whether recourse is to all or a
portion of the assets of such Person and whether or not contingent and without
duplication, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
and (vi) every obligation of the type referred to in clauses (i) through (v) of
another Person and all dividends of another Person the payment of which, in
either case, such Person has guaranteed or is responsible or liable for,
directly or indirectly, as obligor or otherwise.
"Depositary" means, with respect to the Securities of any series issuable
or issued in the form of one or more Registered Global Securities, the Person
designated as Depositary by the Issuer pursuant to Section 2.3 until a successor
Depositary shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each Person who is
then a Depositary hereunder, and if at any time there is more than one such
Person, "Depositary" as used with respect to the Securities of any such series
shall mean the Depositary with respect to the Registered Global Securities of
that series.
"Distributions" means, with respect to the Trust Securities issued by an
Issuer Trust, amounts payable in respect of such Trust Securities as provided in
the related trust agreement or declaration of trust and referred to therein as
"Distributions."
"Dollar" or "$" means the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the European Monetary System of the European Community.
"Event of Default" means any event or condition specified as such in
Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Fair Value" when used with respect to any Voting Stock means the fair
value as determined in good faith by the Board of Directors of the Issuer.
"Foreign Currency" means a currency issued by the government of a country
other than the United States of America.
"Holder," "Holder of Securities," "Securityholder" or any other similar
term means (a) in the case of any Registered Security, the person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case
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of any Unregistered Security, the bearer of such Security, or any Coupon
appertaining thereto, as the case may be.
"Indenture" means this instrument as originally executed and delivered or,
if amended or supplemented as herein provided, as so amended or supplemented or
both, and shall include the forms and terms of particular series of Securities
established as contemplated hereunder.
"Interest Payment Date" means, as to each series of Securities the Stated
Maturity of an installment of interest on such Securities.
"IRS" means the Internal Revenue Service of the United States Department of
the Treasury, or any successor entity.
"Issuer" means (except as otherwise provided in Article IX) Torchmark
Corporation, a Delaware corporation, and, subject to Article IX, its successors
and assigns.
"Issuer Order" means a written statement, request or order of the Issuer
signed in its name by the chairman of the Board of Directors, the president, any
vice president or the treasurer of the Issuer.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Judgment Currency" has the meaning set forth in Section 11.12.
"Non-U.S. Person" means any person that is not a "U.S. person" as such term
is defined in Rule 902 of the Securities Act.
"Officer's Certificate" means a certificate signed by the chairman of the
Board of Directors, the president or any vice president or the treasurer of the
Issuer and delivered to the Trustee. Each such certificate shall comply with
Section 314 of the Trust Indenture Act and include the statements provided for
in Section 11.5.
"Opinion of Counsel" means an opinion in writing signed by legal counsel
who may be an employee of the Issuer or other counsel satisfactory to the
Trustee. Each such opinion shall comply with Section 314 of the Trust Indenture
Act and include the statements provided for in Section 11.5.
"Original Issue Date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.1.
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"Outstanding" (except as otherwise provided in Section 7.4), when used with
reference to Securities, means, subject to the provisions of Section 7.4, as of
any particular time, all Securities authenticated and delivered by the Trustee
under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in Section 10.1) in
the necessary amount shall have been deposited in trust with the Trustee or with
any paying agent (other than the Issuer) or shall have been set aside,
segregated and held in trust by the Issuer for the Holders of such Securities
(if the Issuer shall act as its own paying agent), PROVIDED, that if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein provided, or
provisions satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.9 (except with respect to any such Security as to which proof
satisfactory to the Trustee is presented that such Security is held by a person
in whose hands such Security is a legal, valid and binding obligation of the
Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.1.
"Periodic Offering" means an offering of Securities of a series from time
to time, the specific terms of which Securities, including, without limitation,
the rate or rates of interest, if any, thereon, the stated maturity or
maturities thereof and the redemption provisions, if any, with respect thereto,
are to be determined by the Issuer or its agents upon the issuance of such
Securities.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"Principal" whenever used with reference to the Securities or any Security
or any portion thereof, shall be deemed to include "and premium, if any,"
PROVIDED, HOWEVER, that such inclusion of premium, if any, shall under no
circumstances result in the double counting of such premium for the purpose of
any calculation required hereunder.
"Record date" shall have the meaning set forth in Section 2.7.
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"Registered Global Security" means a Security evidencing all or a part of a
series of Registered Securities, issued to the Depositary for such series in
accordance with Section 2.4, and bearing the legend prescribed in Section 2.4
and any other legend required by the Depositary for such series.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means any
officer of the Trustee assigned to administer corporate trust matters to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Rights Plan" means a plan of the Issuer providing for the issuance by the
Issuer to all holders of its Common Stock of rights entitling the holders
thereof to subscribe for or purchase shares of any class or series of capital
stock of the Issuer which rights (i) are deemed to be transferred with such
shares of such Common Stock, and (ii) are also issued in respect of future
issuance of such Common Stock, in each case until the occurrence of a specified
event or events.
"Security" or "Securities" (except as otherwise provided in Section 7.4)
has the meaning stated in the first recital of this Indenture, or, as the case
may be, Securities that have been authenticated and delivered under this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Indebtedness" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Issuer whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Issuer, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless in the instrument creating or evidencing the same
or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Securities or to other
Debt that is pari passu with, or subordinated to, the Securities, provided,
however, that Senior Indebtedness shall not be deemed to include (a) any Debt of
the Issuer that, when incurred and without respect to any election under Section
1111(b) of the Bankruptcy Reform Act of 1978, was without recourse to the
Issuer, (b) any Debt of the Issuer to any of its Subsidiaries, (c) Debt to any
employee of the Issuer, (d) any Securities, (e) trade accounts payable of the
Issuer, and (f) accrued liabilities arising in the ordinary course of business
of the Issuer.
"Stated Maturity" means, when used with respect to any Security or any
installment of principal thereof (or premium, if any) or interest (including any
additional interest payable pursuant to the terms of any Security) thereon, the
date specified pursuant to the terms of such Security as the fixed date on which
the principal of such Security or such installment of principal (or premium, if
any) or interest (including any additional interest payable pursuant to the
terms of any Security) is due and payable, as such date may, in the case of the
stated maturity of the principal on any security, be shortened or extended as
provided pursuant to the terms of such Security and this Indenture.
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"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having the voting power to elect a majority of the Board of
Directors of such corporation (irrespective of whether or not at the time stock
of any other class or classes of such corporation shall have or might have
voting power by reason of the happening of any contingency) is at the time of
determination directly or indirectly owned by the Issuer, or by one or more of
its Subsidiaries, or by the Issuer and one or more of its Subsidiaries.
"Trust Securities" has the meaning specified in the first recital of this
Indenture.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof and, subject to the provisions of Article VI, shall also include any
successor trustee. "Trustee" shall also mean or include each Person who is then
a trustee hereunder, and, if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" shall have the meaning set forth in Section
10.1(A).
"Voting Stock" means stock of any class or classes having general voting
power under ordinary circumstances to elect a majority of the board of
directors, managers or trustees of the corporation in question, PROVIDED, that,
for the purposes hereof, stock which carries only the right to vote
conditionally on the happening of an event shall not be considered voting stock
whether or not such event shall have happened.
"Yield to Maturity" means the yield to maturity on a series of securities,
calculated at the time of issuance of such series, or, if applicable, at the
most recent redetermination of interest on such series, and calculated in
accordance with accepted financial practice.
ARTICLE II
SECURITIES
Section 2.1 Forms Generally. The Securities of each series and the
---------------
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to but not set forth in a Board Resolution, an Officer's
Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
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The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
Section 2.2 Form of Trustee's Certificate of Authentication. The
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Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities referred to in the within-mentioned Junior
Subordinated Indenture.
The First National Bank of Chicago, as Trustee
Dated:_________________ By:_______________________________
Authorized Signatory"
If at any time there shall be an Authenticating Agent appointed with respect to
any series of Securities, then the Trustee's Certificate of Authentication to be
borne by the Securities of each such series shall be substantially as follows:
"This is one of the Securities referred to in the within-mentioned Junior
Subordinated Indenture.
[___________________________________]
as Authenticating Agent
Dated:________________ By:_______________________________
Authorized Signatory"
Section 2.3 Amount Unlimited; Issuable in Series. The aggregate
------------------------------------
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to one or more Board Resolutions (and to the extent
established pursuant to but not set forth in a Board Resolution, in an Officer's
Certificate detailing such establishment) or established in one or more
indentures supplemental hereto, prior to the initial issuance of Securities of
any series,
(1) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities
of all other series, and which may be part of a series of
Securities previously issued;
(2) any limit upon the aggregate principal amount of the
Securities of the series that may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in
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exchange for, or in lieu of, other Securities of the series
pursuant to Section 2.8, 2.9, 2.11, 8.5 or 12.3);
(3) if other than Dollars, the coin, currency or currencies in
which the Securities of the series are denominated (including,
but not limited to, any composite currency, currency units,
Foreign Currency or ECU);
(4) the Stated Maturity or Maturities on which the principal of
the Securities of such series is payable or the method of
determination thereof, and any dates on which or circumstances
under which, the Issuer shall have the right to extend or
shorten such Stated Maturity or Maturities;
(5) the rate or rates at which the Securities of the series shall
bear interest, if any, the date or dates from which such
interest shall accrue and on which such interest shall be
payable, the terms and conditions of any deferral of interest
and additional interest, if any, thereon, the right, if any,
of the Issuer to extend the interest payment periods and the
duration of the extensions and (in the case of Registered
Securities) the date or dates on which a record shall be taken
for the determination of Holders to whom interest is payable
and/or the method by which such rate or rates or date or dates
shall be determined;
(6) the place or places where and the manner in which, the
principal of and any interest on Securities of the series
shall be payable, if other than as provided in Section 3.2,
the place or places where the Securities of the series may be
presented for registration of transfer or exchange and the
place or places where notices and demands to or upon the
Issuer in respect of the Securities of the series may be made;
(7) the right, if any, of the Issuer to redeem Securities, in
whole or in part, at its option and the period or periods
within which, or the date or dates on which, the price or
prices at which and any terms and conditions upon which
Securities of the series may be so redeemed, pursuant to any
sinking fund or otherwise;
(8) the obligation, if any, of the Issuer to redeem, purchase or
repay Securities of the series pursuant to any mandatory
redemption, sinking fund or analogous provisions or at the
option of a Holder thereof, and the price or prices at which
and the period or periods within which or the date or dates on
which and any terms and conditions upon which Securities of
the series shall be redeemed, purchased or repaid, in whole or
in part, pursuant to such obligation;
(9) subject to Section 13.1, the relative degree, if any, to which
the Securities of the series shall be senior to or be
subordinated to other series of Securities in
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right of payment, whether such other series of Securities are
Outstanding or not;
(10) if other than denominations of $1,000 and any integral
multiple thereof in the case of Registered Securities, or
$1,000 and $5,000 in the case of Unregistered Securities, the
denominations in which Securities of the series shall be
issuable;
(11) the percentage of the principal amount at which the Securities
will be issued, and, if other than the principal amount
thereof, the portion of the principal amount of Securities of
the series which shall be payable upon declaration of
acceleration of the maturity thereof;
(12) if other than the coin, currency or currencies in which the
Securities of the series are denominated, the coin, currency
or currencies in which payment of the principal of or interest
on the Securities of such series shall be payable, including
composite currencies or currency units;
(13) if the principal of or interest on the Securities of the
series are to be payable, at the election of the Issuer or a
Holder thereof, in a coin or currency other than that in which
the Securities are denominated, the period or periods within
which, and the terms and conditions upon which, such election
may be made;
(14) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to
an index or formula based on a coin, currency, composite
currency or currency unit other than that in which the
Securities of the series are denominated, the manner in which
such amounts shall be determined;
(15) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will
be issuable as Registered Global Securities) or Unregistered
Securities (with or without Coupons), or any combination of
the foregoing, any restrictions applicable to the offer, sale
or delivery of Unregistered Securities or the payment of
interest thereon and, if other than as provided in Section
2.8, the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such
series and vice versa;
(16) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a
person who is not a U.S. person in respect of any tax,
assessment or governmental charge withheld or deducted and, if
so, whether the Issuer will have the option to redeem the
Securities of the series rather than pay such additional
amounts;
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(17) if the Securities of the series are to be issuable in
definitive form (whether upon original issue or upon exchange
of a temporary Security of such series) only upon receipt of
certain certificates or other documents or satisfaction of
other conditions, the form and terms of such certificates,
documents or conditions;
(18) any trustees, depositories, authenticating or paying agents,
transfer agents or registrars of any other agents with respect
to the Securities of such series;
(19) any deletion from modification of or addition to the Events of
Default or covenants with respect to the Securities of such
series;
(20) if the Securities of the series are to be convertible into or
exchangeable for any other security or property of the Issuer,
including, without limitation, securities of another Person
held by the Issuer or its Affiliates and, if so, the terms
thereof;
(21) any securities exchange or quotation system on which the
Securities of the series may be listed or quoted, as
applicable; and
(22) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture).
All Securities of any one series and Coupons, if any, appertaining thereto shall
be substantially identical, except in the case of Registered Securities as to
denomination and except as may otherwise be provided by or pursuant to the Board
Resolution or Officer's Certificate referred to above or as set forth in any
indenture supplemental hereto. All Securities of any one series need not be
issued at the same time and may be issued from time to time, consistent with the
terms of this Indenture, if so provided by or pursuant to such Board Resolution,
such Officer's Certificate or in any indenture supplemental hereto.
Section 2.4 Authentication and Delivery of Securities. The Issuer may
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deliver Securities of any series having attached thereto appropriate Coupons, if
any, executed by the Issuer to the Trustee for authentication together with the
applicable documents referred to below in this Section 2.4, and the Trustee
shall thereupon authenticate and deliver such Securities and Coupons, if any, to
or upon the order of the Issuer (contained in the Issuer Order referred to below
in this Section) or pursuant to such procedures acceptable to the Trustee and to
such recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto shall be
determined by or pursuant to such Issuer Order and procedures. If provided for
in such procedures, such Issuer Order may authorize authentication and delivery
pursuant to oral or electronic instructions from the Issuer or its duly
authorized agent or agents, which instructions, if oral, shall be promptly
confirmed in writing. In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive (in the case of subparagraphs (2), (3)
and (4) below only at or before the time of
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the first request of the Issuer to the Trustee to authenticate Securities of
such series) and (subject to Section 6.1) shall be fully protected in relying
upon, the following enumerated documents unless and until such documents have
been superseded or revoked:
(1) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities and Coupons, if any, are
not to be delivered to the Issuer, PROVIDED that, with respect to
Securities of a series subject to a Periodic Offering, (a) such
Issuer Order may be delivered by the Issuer to the Trustee prior
to the delivery to the Trustee of such Securities for
authentication and delivery, (b) the Trustee shall authenticate
and deliver Securities of such series for original issue from time
to time, in an aggregate principal amount not exceeding the
aggregate principal amount established for such series, pursuant
to an Issuer Order or pursuant to procedures acceptable to the
Trustee as may be specified from time to time by an Issuer Order,
(c) the maturity date or dates, original issue date or dates,
interest rate or rates and any other terms of Securities of such
series shall be determined by an Issuer Order or pursuant to such
procedures and (d) if provided for in such procedures, such Issuer
Order may authorize authentication and delivery pursuant to oral
or electronic instructions from the Issuer or its duly authorized
agent or agents, which instructions, if oral, shall be promptly
confirmed in writing ;
(2) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Section 2.1 and 2.3 by or
pursuant to which the forms and terms of the Securities and
Coupons, if any, were established;
(3) an Officer's Certificate setting forth the form or forms and terms
of the Securities and Coupons, if any, stating that the form or
forms and terms of the Securities and Coupons, if any, have been
established pursuant to Sections 2.1 and 2.3 and comply with this
Indenture, and covering such other matters as the Trustee may
reasonably request; and
(4) at the option of the Issuer, either one or more Opinions of
Counsel, or a letter addressed to the Trustee permitting it to
rely on one or more Opinions of Counsel, substantially to the
effect that:
(a) the form or forms of the Securities and Coupons, if any, have
been duly authorized and established in conformity with the
provisions of this Indenture;
(b) in the case of an underwritten offering, the terms of the
Securities have been duly authorized and established in
conformity with the provisions of this Indenture, and, in the
case of an offering that is not underwritten, certain terms of
the Securities have been established pursuant to a Board
Resolution, an Officer's Certificate or a
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supplemental indenture in accordance with this Indenture, and
when such other terms as are to be established pursuant to
procedures set forth in an Issuer Order shall have been
established, all such terms will have been duly authorized by
the Issuer and will have been established in conformity with
the provisions of this Indenture;
(c) such Securities and Coupons, if any, when executed by the
Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid
for by the purchasers thereof, and subject to any conditions
specified in such Opinion of Counsel, will have been duly
issued under this Indenture, will be entitled to the benefits
of this Indenture; and
(d) such Securities will be valid and binding obligations of the
Issuer, enforceable in accordance with their respective terms,
except as the enforceability thereof may be limited by (i)
bankruptcy, insolvency, reorganization, liquidation,
moratorium, fraudulent transfer or similar laws affecting
creditors' rights generally, (ii) rights of acceleration, if
any, and (iii) the availability of equitable remedies may be
limited by equitable principles of general applicability and
such counsel need express no opinion with regard to the
enforceability of Section 6.6 or of a judgment denominated in
a currency other than Dollars.
In rendering such opinions, any counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent transfer and
other similar laws affecting the rights and remedies of creditors and is subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Such counsel may rely upon
opinions of other counsel (copies of which shall be delivered to the Trustee)
reasonably satisfactory to the Trustee, in which case the opinion shall state
that such counsel believes he and the Trustee are entitled so to rely. Such
counsel may also state that, insofar as such opinion involves factual matters,
he has relied, to the extent he deems proper, upon certificates of officers of
the Issuer and its subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and
deliver any Securities under this section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken by the Issuer or
if the Trustee in good faith by its board of directors or board of trustees,
executive committee or a trust committee of directors or trustees or Responsible
Officers shall determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee's own rights, duties
or immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.3 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
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authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or delivered or held pursuant to
such Depositary's instructions and (iv) shall bear a legend substantially to the
following effect: "Unless and until it is exchanged in whole or in part for
Securities in definitive registered form, this Security may not be transferred
except as a whole by the Depositary to the nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the Depositary
or by the Depositary or any such nominee to a successor Depositary or a nominee
of such successor Depositary."
Each Depositary designated pursuant to Section 2.3 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Exchange Act and any other applicable statute or
regulation.
Section 2.5 Execution of Securities. The Securities and each Coupon
-----------------------
appertaining thereto, if any, shall be signed on behalf of the Issuer by the
chairman or vice chairman of its Board of Directors, its president, any vice
president or its treasurer, under its corporate seal (except in the case of
Coupons) which may, but need not, be attested. Such signatures may be the
manual or facsimile signatures of the present or any future such officers. The
seal of the Issuer may be in the form of a facsimile thereof and may be
impressed, affixed, imprinted or otherwise reproduced on the Securities.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Security that has been duly authenticated and delivered by the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
Section 2.6 Certificate of Authentication. Only such Securities as
-----------------------------
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
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Section 2.7 Denomination and Date of Securities; Payment of Interest.
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The Securities of each series shall be issuable as Registered Securities or
Unregistered Securities in denominations established as contemplated by Section
2.3 or, with respect to the Registered Securities of any series, if not so
established, in denominations of $1,000 and any integral multiple thereof. If
denominations of Unregistered Securities of any series are not so established,
such Securities shall be issuable in denominations of $1,000 and $5,000. The
Securities of each series shall be numbered, lettered or otherwise distinguished
in such manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as evidenced
by the execution and authentication thereof.
Each Registered Security shall be dated the date of its authentication.
Each Unregistered Security shall be dated as provided in the Board Resolution
referred to in Section 2.3. The Securities of each series shall bear interest,
if any, from the date, and such interest shall be payable on the dates,
established as contemplated by Section 2.3.
The person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of Registered Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.3, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the preceding calendar month or, if such interest payment
date is the fifteenth day of a calendar month, the first day of such calendar
month, whether or not such record date is a Business Day.
Section 2.8 Registration, Transfer and Exchange. The Issuer will keep
-----------------------------------
at each office or agency to be maintained for the purpose as provided in Section
3.2 for each series of Securities a register or registers in which, subject to
such reasonable regulations as the Issuer may prescribe, it will provide for the
registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.2, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
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new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any series
(other than a Registered Global Security, except as set forth below) may be
exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.2
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, at the option of the Holder thereof, except as otherwise
specified pursuant to Section 2.3, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.2, with, in the case
of Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. At the option of
the Holder thereof, if Unregistered Securities of any series, maturity date,
interest rate and original issue date are issued in more than one authorized
denomination, except as otherwise specified pursuant to Section 2.3, such
Unregistered Securities may be exchanged for Unregistered Securities of such
series having authorized denominations and an equal aggregate principal amount,
upon surrender of such Unregistered Securities to be exchanged at the agency of
the Issuer that shall be maintained for such purpose in accordance with Section
3.2 or as specified pursuant to Section 2.3, with, in the case of Unregistered
Securities that have Coupons attached, all unmatured Coupons and all matured
Coupons in default thereto appertaining, and upon payment, if the Issuer shall
so require, of the charges hereinafter provided. Registered Securities of any
series may not be exchanged for Unregistered Securities of such series unless
(1) otherwise specified pursuant to Section 2.3 and (2) the Issuer has delivered
to the Trustee an Opinion of Counsel that (x) the Issuer has received from the
IRS a ruling or (y) since the date hereof, there has been a change in the
applicable United States federal income tax law, in either case to the effect
that the inclusion of terms permitting Registered Securities to be exchanged for
Unregistered Securities would result in no United States federal income tax
effect adverse to the Issuer or to any Holder. Whenever any Securities are so
surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive. All Securities and Coupons, if any, surrendered upon any
exchange or transfer provided for in this Indenture shall be promptly cancelled
and disposed of by the Trustee, and the Trustee shall deliver a certificate of
disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer, exchange,
redemption or payment shall (if so required by the Issuer or the Trustee) be
duly endorsed, or be accompanied by a written instrument or instruments of
transfer in form satisfactory to the Issuer and the Trustee duly executed, by
the Holder or his attorney duly authorized in writing.
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The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of (a)
any Securities of any series for a period of 15 days preceding the first mailing
of notice of redemption of Securities of such series to be redeemed or (b) any
Securities selected, called or being called for redemption, in whole or in part,
except, in the case of any Security to be redeemed in part, the portion thereof
not so to be redeemed.
Notwithstanding any other provision of this Section 2.8, unless and until
it is exchanged in whole or in part for Securities in definitive registered
form, a Registered Global Security representing all or a portion of the
Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a series
represented by one or more Registered Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Registered
Securities or if at any time the Depositary for such Registered Securities shall
no longer be eligible under Section 2.4, the Issuer shall appoint a successor
Depositary eligible under Section 2.4 with respect to such Registered
Securities. If a successor Depositary eligible under Section 2.4 for such
Registered Securities is not appointed by the Issuer within 90 days after the
Issuer receives such notice or becomes aware of such ineligibility, the Issuer's
election pursuant to Section 2.3 that such Registered Securities be represented
by one or more Registered Global Securities shall no longer be effective and the
Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Registered
Global Security or Securities representing such Registered Securities in
exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that the
Registered Securities of any series issued in the form of one or more Registered
Global Securities shall no longer be represented by a Registered Global Security
or Securities. In such event the Issuer will execute, and the Trustee, upon
receipt of any Officer's Certificate for the authentication and delivery of
definitive Securities of such series, will authenticate and deliver, Securities
of such series in definitive registered form without coupons, in any authorized
denominations, in an aggregate principal amount equal to the principal amount of
the Registered Global Security or Securities representing such Registered
Securities, in exchange for such Registered Global Security or Securities.
If specified by the Issuer pursuant to Section 2.3 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary.
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Thereupon, the Issuer shall execute, and the Trustee shall authenticate and
deliver, without service charge,
(i) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized
denominations as requested by such Person, in an aggregate
principal amount equal to and in exchange for such Person's
beneficial interest in the Registered Global Security; and
(ii) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the
principal amount of the surrendered Registered Global Security
and the aggregate principal amount of Registered Securities
authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Registered Global Security for Securities in definitive
registered form without coupons, in authorized denominations, such Registered
Global Security shall be cancelled by the Trustee or an agent of the Issuer or
the Trustee. Securities in definitive registered form without coupons issued in
exchange for a Registered Global Security pursuant to this Section 2.8 shall be
registered in such names and in such authorized denominations as the Depositary
for such Registered Global Security, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee or an agent of
the Issuer or the Trustee. The Trustee or such agent shall deliver such
Securities to or as directed by the Persons in whose names such Securities are
so registered.
All Securities issued upon any transfer or exchange of Securities shall be
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Notwithstanding anything herein or in the terms of any series of Securities
to the contrary, none of the Issuer, the Trustee or any agent of the Issuer or
the Trustee (any of which, other than the Issuer, shall rely on an Officer's
Certificate and an Opinion of Counsel) shall be required to exchange any
Unregistered Security for a Registered Security if such exchange would result in
United States federal income tax consequences adverse to the Issuer (such as,
for example, the inability of the Issuer to deduct from its income, as computed
for United States federal income tax purposes, the interest payable on the
Unregistered Securities) under then applicable United States federal income tax
laws.
Section 2.9 Mutilated, Defaced, Destroyed, Lost and Stolen Securities.
---------------------------------------------------------
In case any temporary or definitive Security or any Coupon appertaining to any
Security shall be mutilated, defaced, destroyed, lost or stolen, the Issuer in
its discretion may execute and, upon the written request of any officer of the
Issuer, the Trustee shall authenticate and deliver, a new Security of the same
series, maturity date, interest rate and original issue date, bearing a number
or other distinguishing symbol not contemporaneously outstanding, in exchange
and substitution for the mutilated or defaced Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen with Coupons
corresponding to the Coupons appertaining to the Securities so mutilated,
defaced, destroyed, lost or stolen, or in exchange or substitution for the
Security to which such mutilated, defaced, destroyed, lost or stolen Coupon
appertained, with Coupons appertaining thereto corresponding to the Coupons so
mutilated, defaced, destroyed, lost or stolen. In every case, the
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applicant for a substitute Security or Coupon shall furnish to the Issuer and to
the Trustee and any agent of the Issuer or the Trustee such security or
indemnity as may be required by them to indemnify and defend and to save each of
them harmless and, in every case of destruction, loss or theft, evidence to
their satisfaction of the destruction, loss or theft of such Security or Coupon
and of the ownership thereof, and in the case of mutilation or defacement shall
surrender the Security and related Coupons to the Trustee or such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) of its agent connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Issuer may, instead of issuing a substitute Security, pay
or authorize the payment of the same or the relevant Coupon (without surrender
thereof except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or indemnity as any of them
may require to save each of them harmless, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security or Coupons and of the ownership
thereof.
Every substitute Security or Coupon of any series issued pursuant to the
provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered hereunder.
All Securities and Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced or destroyed,
lost or stolen Securities and Coupons and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
Section 2.10 Cancellation of Securities; Destruction Thereof. All
-----------------------------------------------
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if any, if surrendered to the Issuer or any agent of the
Issuer or the Trustee or any agent of the Trustee, shall be delivered to the
Trustee or its agent for cancellation or, if surrendered to the Trustee, shall
be cancelled by it; and no Securities or Coupons shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee or its agent shall dispose of cancelled Securities and Coupons held by
it and deliver a certificate of disposition to the Issuer. If the Issuer or its
agent shall acquire any of the Securities or Coupons, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Securities or Coupons unless and until the same are delivered to the Trustee or
its agent for cancellation.
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Section 2.11 Temporary Securities. Pending the preparation of
--------------------
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Registered Securities of such
series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.2
and, in the case of Unregistered Securities, at any agency maintained by the
Issuer for such purpose as specified pursuant to Section 2.3, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.3. The provisions of this Section are subject
to any restrictions or limitations on the issue and delivery of temporary
Unregistered Securities of any series that may be established pursuant to
Section 2.3 (including any provision that Unregistered Securities of such series
initially be issued in the form of a single global Unregistered Security to be
delivered to a depositary or agency located outside the United States and the
procedures pursuant to which definitive or global Unregistered Securities of
such series would be issued in exchange for such temporary global Unregistered
Security).
Section 2.12 CUSIP Numbers. The Issuer in issuing the Securities may use
-------------
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption and other similar or related materials
as a convenience to Holders; provided that any such notice or other materials
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of redemption
or other materials and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers.
ARTICLE III
COVENANTS OF THE ISSUER
Section 3.1 Payment of Principal and Interest. The Issuer covenants and
---------------------------------
agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, if any,
each of the Securities of such series (together with any additional amounts
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payable pursuant to the terms of such Securities) at the place or places, at the
respective time or times and in the manner provided in such Securities and in
the Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary Unregistered
Security provides that interest thereon may be paid while such Security is in
temporary form, the interest on any such temporary Unregistered Security
(together with any additional amounts payable pursuant to the terms of such
Security) shall be paid, as to the installments of interest evidenced by Coupons
attached thereto, if any, only upon presentation and surrender thereof, and, as
to the other installments of interest, if any, only upon presentation of such
Securities for notation thereon of the payment of such interest, in each case
subject to any restrictions that may be established pursuant to Section 2.3. The
interest, if any, on Registered Securities (together with any additional amounts
payable pursuant to the terms of such Securities) shall be payable only to or
upon the written order of the Holders thereof and, at the option of the Issuer,
may be paid by wire transfer or by mailing checks for such interest payable to
or upon the written order of such Holders at their last addresses as they appear
on the Securities register of the Issuer.
Section 3.2 Offices for Payments, Etc. So long as any Registered
--------------------------
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Registered Securities of each
series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable,
pursuant to Section 2.3 and where the Registered Securities of each series may
be presented for registration of transfer as in this Indenture provided.
The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States (including any city in which such an
agency is required to be maintained under the rules of any stock exchange on
which the Securities of such series are listed) where the Unregistered
Securities, if any, of each series and Coupons, if any, appertaining thereto may
be presented for payment. No payment on any Unregistered Security or Coupon will
be made upon presentation of such Unregistered Security or Coupon at an agency
of the Issuer within the United States nor will any payment be made by transfer
to an account in, or by mail to an address in, the United States unless pursuant
to applicable United States laws and regulations then in effect such payment can
be made without tax consequences adverse to the Issuer. Notwithstanding the
foregoing, payments in Dollars of Unregistered Securities of any series and
Coupons appertaining thereto which are payable in Dollars may be made at an
agency of the Issuer maintained in the Borough of Manhattan, The City of New
York if such payment in Dollars at each agency maintained by the Issuer outside
the United States for payment on such Unregistered Securities is illegal or
effectively precluded by exchange controls or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City of New York,
an office or agency where notices and demands to or upon the Issuer in respect
of the Securities of any series, the Coupons appertaining thereto or this
Indenture may be served.
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The Issuer will give to the Trustee written notice of the location of each
such office or agency and of any change of location thereof. In case the Issuer
shall fail to maintain any agency required by this Section to be located in the
Borough of Manhattan, The City of New York, or shall fail to give such notice of
the location or for any change in the location of any of the above agencies,
presentations and demands may be made and notices may be served at the Corporate
Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional offices
or agencies where the Securities of a series and any Coupons appertaining
thereto may be presented for payment, where the Securities of that series may be
presented for exchange as provided in this Indenture and pursuant to Section 2.3
and where the Registered Securities of that series may be presented for
registration of transfer as in this Indenture provided, and the Issuer may from
time to time rescind any such designation, as the Issuer may deem desirable or
expedient; PROVIDED, that no such designation or rescission shall in any manner
relieve the Issuer of its obligations to maintain the agencies provided for in
this Section. The Issuer shall give to the Trustee prompt written notice of any
such designation or rescission thereof.
Section 3.3 Appointment to Fill a Vacancy in Office of Trustee. The
--------------------------------------------------
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
Section 3.4 Paying Agents. Whenever the Issuer shall appoint a paying
-------------
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section,
(a) that it will hold all sums received by it as such agent for
the payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other obligor on
the Securities of such series) in trust for the benefit of the Holders of the
Securities of such series, or Coupons appertaining thereto, if any, or of the
Trustee;
(b) that it will give the Trustee notice of any failure by the
Issuer (or by any other obligor on the Securities of such series) to make any
payment of the principal of or interest on the Securities of such series when
the same shall be due and payable; and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the continuance of
the failure referred to in the foregoing clause (b).
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
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If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject to
Section 10.1, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement to
hold sums in trust as provided in this Section is subject to the provisions of
Sections 10.3 and 10.4.
Section 3.5 Compliance Certificates. The Issuer will furnish to the
-----------------------
Trustee on or before January 31 in each year (beginning with [ ]) a brief
certificate (which need not comply with Section 11.5) from the principal
executive, financial or accounting officer of the Issuer stating that, in the
course of the performance by the signer of his or her duties as an officer of
the Issuer, he or she would normally have knowledge of any default or non-
compliance by the Issuer in the performance of any covenants or conditions
contained in this Indenture, stating whether or not he or she has knowledge of
any such default or non-compliance and, if so, describing each such default or
non-compliance of which the signer has knowledge and the nature thereof.
Section 3.6 Corporate Existence. Subject to Article IX, the Issuer will
-------------------
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence and the rights (charter and statutory),
licenses and franchises of the Issuer and its Subsidiaries; PROVIDED, that the
Issuer shall not be required to preserve any such right, license or franchise,
if, in the judgment of the Issuer, the preservation thereof is no longer
desirable in the conduct of the business of the Issuer and its Subsidiaries
taken as a whole and the loss thereof is not disadvantageous in any material
respect to the Securityholders.
Section 3.7 Maintenance of Properties. The Issuer will cause all
-------------------------
properties used in or useful in the conduct of its business or the business of
any Subsidiary to be maintained and kept in good condition, repair, and working
order and supplied with all necessary equipment and will cause to be made all
necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Issuer may be necessary, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, except to the extent that the Issuer may be prevented from so
doing by circumstances beyond its control; PROVIDED, that nothing in this
Section shall prevent the Issuer from discontinuing the operation or maintenance
of any of such properties, or disposing of any of them, if such discontinuance
or disposal is, in the judgment of the Issuer desirable in the conduct of the
business of the Issuer or any Subsidiary and not disadvantageous in any material
respect to the Securityholders.
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Section 3.8 Payment of Taxes and Other Claims. The Issuer will pay or
---------------------------------
discharge or cause to be paid or discharged, before the same shall become
delinquent: (a) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Subsidiary or upon the income, profits or
property of the Issuer or any Subsidiary; and (b) all lawful claims for labor,
materials and supplies, which, if unpaid, might by law become a lien upon the
property of the Issuer or any Subsidiary; PROVIDED, that the Issuer shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim whose amount, applicability or validity is being
contested in good faith by appropriate proceedings; and PROVIDED FURTHER that
the Issuer shall not be required to cause to be paid or discharged any such tax,
assessment, charge or claim if the Issuer shall determine that such payment is
not advantageous to the conduct of the business of the Issuer and its
Subsidiaries taken as a whole and that the failure so to pay or discharge is not
disadvantageous in any material respect to the Securityholders.
ARTICLE IV
SECURITYHOLDER LISTS AND REPORTS BY THE
ISSUER AND THE TRUSTEE
Section 4.1 Issuer to Furnish Trustee Information as to Names and
-----------------------------------------------------
Addresses of Securityholders. If and so long as the Trustee shall not be the
- ----------------------------
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act:
(a) semi-annually not more than 5 days after each record date
for the payment of interest on such Registered Securities, as hereinabove
specified, as of such record date and on dates to be determined pursuant to
Section 2.3 for non-interest bearing Registered Securities in each year; and
(b) at such other times as the Trustee may reasonably request in
writing, within thirty days after receipt by the Issuer of any such request as
of a date not more than 15 days prior to the time such information is furnished.
Section 4.2 Reports by the Issuer. The Issuer covenants to file with
---------------------
the Trustee, within 15 days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the information, documents,
and other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act or pursuant to
Section 314 of the Trust Indenture Act.
Section 4.3 Reports by the Trustee.
----------------------
(a) On or before the first July 15 which occurs not less than 60
days after the earliest date of issuance of any Securities and on or before July
15 in each year thereafter, so long as any Securities are Outstanding hereunder,
the Trustee shall transmit by mail as provided below to the
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Securityholders of each series of outstanding Securities, as hereinafter in this
Section provided, a brief report dated as of the preceding May 15 with respect
to:
(i) its eligibility under Section 6.10 and its qualification
under Section 6.9, or in lieu thereof, if to the best of
its knowledge it has continued to be eligible and
qualified under such Sections, a written statement to
such effect;
(ii) the character and amount of any advances (and if the
Trustee elects to so state, the circumstances
surrounding the making thereof) made by the Trustee (as
such) which remain unpaid on the date of such report and
for the reimbursement of which it claims or may claim a
lien or charge, prior to that of the Securities of such
series, on any property or funds held or collected by it
as Trustee, except that the Trustee shall not be
required (but may elect) to report such advances if such
advances so remaining unpaid aggregate not more than
0.5% of the principal of the Securities of such series
outstanding on the date of such report;
(iii) the amount, interest rate and maturity date of all other
indebtedness owing by the Issuer (or any other obligor
on the Securities of such series) to the Trustee in its
individual capacity on the date of such report, with a
brief description of any property held as collateral
security therefor, except any indebtedness based upon a
creditor relationship;
(iv) the property and funds, if any, physically in the
possession of the Trustee (as such) in respect of the
Securities of such series on the date of such report;
(v) any additional issue of Securities of such series which
the Trustee has not previously reported; and
(vi) any action taken by the Trustee in the performance of
its duties under this Indenture which the Trustee has
not previously reported and which in the Trustee's
opinion materially affects the Securities of such
series, except action in respect of a default, notice of
which has been or is to be withheld by it in accordance
with the provisions of Section 5.11.
(b) The Trustee shall transmit to the Securityholders of each
series, as provided in subsection (c) of this Section, a brief report with
respect to the character and amount of any advances (and if the Trustee elects
so to state, the circumstances surrounding the making thereof) made by the
Trustee (as such) in respect of the Securities of such series since the date of
the last report transmitted pursuant to the provisions of subsection (a) of this
Section (or if no such report
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<PAGE>
has yet been so transmitted, since the date of this Indenture) for the
reimbursement of which it claims or may claim a lien or charge prior to that of
the Securities of such series on property or funds held or collected by it as
Trustee and which it has not previously reported pursuant to this subsection
(b), except that the Trustee shall not be required (but may elect) to report
such advances if such advances remaining unpaid at any time aggregate 10% or
less of the principal amount of Securities of such series outstanding at such
time, such report to be transmitted within 90 days after such time.
(c) Reports pursuant to this Section shall be transmitted by mail
to all Holders of Securities of such series, as the names and addresses of such
Holders appear upon the Securities register as of a date not more than 15 days
prior to the mailing thereof.
(d) A copy of each such report shall, at the time of such
transmission to Securityholders, be furnished to the Issuer and be filed by the
Trustee with each stock exchange upon which the Securities of such series are
listed and also with the Commission. The Issuer agrees to notify the Trustee
when and as Securities of any series become listed on any national securities
exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver
----------------------------------------------------------
of Default. "Event of Default" with respect to Securities of any series,
- ----------
wherever used herein, means any one of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any installment of interest upon any
of the Securities of such series as and when the same shall become due and
payable, and continuance of such default for a period of 30 days; provided that,
a valid extension of an interest payment period by the Issuer in accordance with
the terms of such Securities shall not constitute a default in the payment of
interest for this purpose; or
(b) default in the payment of all or any part of the principal on
any of the Securities of such series as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or otherwise; or
(c) default in the payment of any sinking fund installment as and
when the same shall become due and payable by the terms of the Securities of
such series; or
(d) failure on the part of the Issuer duly to observe or perform
any other of the covenants or agreements on the part of the Issuer in the
Securities of such series or contained in this Indenture (other than a covenant
or agreement included in this Indenture solely for the benefit of a
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series of Securities other than such series) for a period of 60 days after the
date on which written notice specifying such failure, stating that such notice
is a "Notice of Default" hereunder and demanding that the Issuer remedy the
same, shall have been given by registered or certified mail, return receipt
requested, to the Issuer by the Trustee, or to the Issuer and the Trustee by the
holders of at least 25% in aggregate principal amount of the Outstanding
Securities of the series to which such covenant or agreement relates; or
(e) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Issuer in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer for any substantial part of its
or their property or ordering the winding up or liquidation of its or their
affairs, and such decree or order shall remain unstayed and in effect for a
period of 60 consecutive days; or
(f) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or for any substantial part of its or their property, or make any
general assignment for the benefit of creditors; or
(g) failure by the Issuer to make any payment at maturity,
including any applicable grace period, in respect of indebtedness, which term as
used herein means obligations (other than the Securities of such series or non-
recourse obligations) of, or guaranteed or assumed by, the Issuer for borrowed
money or evidenced by bonds, debentures, notes or other similar instruments
("Indebtedness") in an amount in excess of $10,000,000 or the equivalent thereof
in any other currency or composite currency and such failure shall have
continued for a period of thirty days after written notice thereof shall have
been given by registered or certified mail, return receipt requested, to the
Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of not
less than 25% in aggregate principal amount of all the Securities then
Outstanding (treated as one class); or
(h) a default with respect to any Indebtedness, which default
results in the acceleration of Indebtedness in an amount in excess of
$10,000,000 or the equivalent thereof in any other currency or composite
currency without such Indebtedness having been discharged or such acceleration
having been cure, waived, rescinded or annulled for a period of thirty days
after written notice thereof shall have been given by registered or certified
mail, return receipt requested, to the Issuer by the Trustee, or to the Issuer
and the Trustee by the Holders of not less than 25% in aggregate principal
amount of all the Securities then Outstanding (treated as one class); or
(i) any other Event of Default provided in the supplemental
indenture or Board Resolution under which such series of Securities is issued or
in the form of Security for such series;
provided that if any such failure, default or acceleration referred to in
clauses (g) or (h) above shall cease or be cured, waived, rescinded or annulled,
then the Event of Default hereunder by reason thereof shall be deemed likewise
to have been thereupon cured.
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If an Event of Default described in clause (a), (b) or (c) occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(each such series voting as a separate class) by notice in writing to the Issuer
(and to the Trustee if given by Securityholders), may declare the entire
principal (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of such series, and the interest accrued
thereon, if any, to be due and payable immediately, and upon any such
declaration, the same shall become immediately due and payable.
Except as otherwise provided in the terms of any series of Securities
pursuant to Section 2.3, if an Event of Default described in clause (d) or (i)
above with respect to all series of Securities then Outstanding, occurs and is
continuing, then, and in each and every such case, unless the Principal of all
of the Securities shall have already become due and payable, either the Trustee
or the Holders of not less than 25% in aggregate principal amount of all of the
Securities then Outstanding hereunder (treated as one class) by notice in
writing to the Issuer (and to the Trustee if given by Securityholders), may
declare the entire principal (or, if the Securities of any series are Original
Issue Discount Securities, such portion of the principal amount as may be
specified in the terms of such series) of all of the Securities then
Outstanding, and the interest accrued thereon, if any, to be due and payable
immediately, and upon such declaration, the same shall become immediately due
and payable. If an Event of Default described in clause (e) or (f) above occurs
and is continuing, then the principal amount of all of the Securities then
Outstanding, and the interest accrued thereon, if any, shall become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder.
If an Event of Default described in clause (d) or (i) occurs and is
continuing, which Event of Default is with respect to less than all series of
Securities then Outstanding, then, and in each and every such case, except for
any series of Securities the principal of which shall have already become due
and payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of each such affected series then Outstanding
hereunder (each such series voting as a separate class) by notice in writing to
the Issuer (and to the Trustee if given by Securityholders), may declare the
entire principal (or, if the Securities of such series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) of all Securities of such series, and the interest
accrued thereon, if any, to be due and payable immediately, and upon any such
declaration, the same shall become immediately due and payable.
The foregoing provisions are subject to the condition that if, at any time
after the principal (or, if the Securities are Original Issue Discount
Securities, such portion of the principal as may be specified in the terms
thereof) of the Securities of any series (or of all the Securities, as the case
may be) shall have been so declared due and payable, and before any judgment or
decree for the payment of the moneys due shall have been obtained or entered as
hereinafter provided,
(A) the Issuer shall pay or shall deposit with the Trustee a sum
sufficient to pay
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(i) all matured installments of interest upon all the Securities
of such series (or all the Securities, as the case may be);
an
(ii) the principal of any and all Securities of such series (or
of all the Securities, as the case may be) which shall have
become due otherwise than by acceleration; and
(iii) interest upon such principal and, to the extent that payment
of such interest is enforceable under applicable law, on
overdue installments of interest, at the same rate as the
rate of interest or Yield to Maturity (in the case of
Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of
interest or Yields to Maturity of all the Securities, as the
case may be) to the date of such payment or deposit; and
(iv) all amounts payable to the Trustee pursuant to Section
6.6; and
(B) all Events of Default under the Indenture, other than the
non-payment of the principal of Securities which shall have
become due by acceleration, shall have been cured, waived or
otherwise remedied as provided herein, then and in every
such case the Holders of a majority in aggregate principal
amount of all the Securities of such series voting as a
separate class (or all the Securities, as the case may be,
voting as a single class), then Outstanding, by written
notice to the Issuer and to the Trustee, may waive all
defaults with respect to such series (or with respect to all
the Securities, as the case may be) and rescind and annul
such declaration and its consequences, but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal of any
Original Issue Discount Securities shall have been accelerated and declared due
and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove
--------------------------------------------------------
Debt. The Issuer covenants that (a) in case default shall be made in the
- ----
payment of any installment of interest on any of the Securities of any series
when such interest shall have become due and payable, and such default shall
have continued for a period of 30 days, or (b) in case default shall be made in
the payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise, then upon demand of the Trustee, the Issuer will pay to
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the Trustee for the benefit of the Holders of the Securities of such series the
whole amount that then shall have become due and payable on all Securities of
such series, and such Coupons, for principal and interest, as the case may be
(with interest to the date of such payment upon the overdue principal and, to
the extent that payment of such interest is enforceable under applicable law, on
overdue installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities) specified
in the Securities of such series); and in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses of collection, and such
other amount due the Trustee under Section 6.6 in respect of Securities of such
series.
Until such demand is made by the Trustee, the Issuer may pay the principal
of and interest on the Securities of any series to the registered Holders,
whether or not the Securities of such series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name as trustee of an express trust, shall be
entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated, all the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or any
other obligor upon the Securities under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) owing and unpaid in respect of the Securities of any
series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
amounts payable to the Trustee under Section 6.6) and of the Securityholders
allowed in any judicial proceedings relative to the Issuer or other obligor upon
the Securities, or to the creditors or property of the Issuer or such other
obligor; and
(b) unless prohibited by applicable law and regulations, to vote
on behalf of the holders of the Securities of any series in any election of a
receiver, assignee, trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings, custodian or other
person performing similar functions in respect of any such proceedings; and
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<PAGE>
(c) to collect and receive any moneys or other property payable
or deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official
performing similar functions in respect of any such proceedings is hereby
authorized by each of the Securityholders to make payments to the Trustee, and,
in the event that the Trustee shall consent to the making of payments directly
to the Securityholders, to pay to the Trustee its costs and expenses of
collection and all other amounts due to it pursuant to Section 6.6.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding, except as aforesaid in clause (b).
All rights of action and of asserting claims under this Indenture, or under
any of the Securities of any series or Coupons appertaining to such Securities,
may be enforced by the Trustee without the possession of any of the Securities
of such series or Coupons appertaining to such Securities or the production
thereof in any trial or other proceedings relative thereto, and any such action
or proceedings instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be awarded to
the Trustee for ratable distribution to the Holders of the Securities or Coupons
appertaining to such Securities in respect of which such action was taken, after
payment of all sums due to the Trustee under Section 6.6 in respect of such
Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such
proceedings.
Section 5.3 Application of Proceeds. Any moneys collected by the Trustee
-----------------------
pursuant to this Article in respect of any series shall be applied in the
following order at the date or dates fixed by the Trustee and, in case of the
distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to such series of
Securities in respect of which monies have been collected, including all
amounts due to the Trustee and each predecessor Trustee pursuant to Section
6.6 in respect to such series of Securities;
SECOND: In case the principal of the Securities of such series in respect
of which moneys have been collected shall not have become and be then due
and payable, to the payment of interest on the Securities of such series in
default in the order of the maturity of the installments on such interest,
with interest (to the extent that such interest has been collected
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by the Trustee and is permitted by applicable law) upon the overdue
installments of interest at the same rate as the rate of interest or Yield
to Maturity (in the case of Original Issue Discount Securities) specified
in such Securities, such payments to be made ratably to the persons
entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series in respect
of which moneys have been collected shall have become and shall be then due
and payable, to the payment of the whole amount then owing and unpaid upon
all the Securities of such series for principal and interest, with interest
upon the overdue principal, and (to the extent that such interest has been
collected by the Trustee and is permitted by applicable law) upon the
overdue installations of interest at the same rate as the rate of interest
or Yield to Maturity (in the case of Original Issue Discount Securities)
specified in the Securities of such series; and in case such moneys shall
be insufficient to pay in full the whole amount so due and unpaid upon the
Securities of such series, then to the payment of such principal and
interest or Yield to Maturity, without preference or priority of principal
over interest or Yield to Maturity, or of interest or Yield to Maturity
over principal, or of any installment of interest over any other
installment of interest or of any Security of such series over any other
Security of such series, ratably to the aggregate of such principal and
accrued and unpaid interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the Issuer or any other
person lawfully entitled thereto.
Section 5.4 Suits for Enforcement. In case an Event of Default has
---------------------
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
Section 5.5 Restoration of Rights on Abandonment of Proceedings. In
---------------------------------------------------
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
Section 5.6 Limitations on Suits by Security Holders. No Holder of any
----------------------------------------
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture or such Security, or for the
appointment of a trustee, receiver, liquidator, custodian or other similar
official or for any other remedy hereunder or thereunder, unless (a) such Holder
previously shall have given to the Trustee written notice of an Event of Default
with respect to Securities of such series and of the continuance thereof, as
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hereinbefore provided, and (b) the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding (treated as a
single class) shall have made written request upon the Trustee to institute such
action or proceedings in its own name as Trustee hereunder and shall have
offered to the Trustee such reasonable indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and (c) the
Trustee for 60 days after its receipt of such notice, request and offer of
indemnity shall have failed to institute any such action or proceeding, and (d)
no direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 5.9; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Security or Coupon with
every other taker and Holder and the Trustee, that no one or more Holders of
Securities of any series or Coupons appertaining to such Securities shall have
any right in any manner whatever by virtue or by availing of any provision of
this Indenture or any Security to affect, disturb or prejudice the rights of any
other such taker or Holder of Securities or Coupons appertaining to such
Securities, or to obtain or seek to obtain priority over or preference to any
other such taker or Holder or to enforce any right under this Indenture or any
Security, except in the manner herein provided and for the equal, ratable and
common benefit of all Holders of Securities of the applicable series and Coupons
appertaining to such Securities. For the protection and enforcement of the
provisions of this Section, each and every Securityholder and the Trustee shall
be entitled to such relief as can be given either at law or in equity.
Section 5.7 Unconditional Right of Securityholders to Institute Certain
-----------------------------------------------------------
Suits. Notwithstanding any other provision in this Indenture and any provision
- -----
of any Security, the right of any Holder of any Security or Coupon to receive
payment of the principal of and interest on such Security or Coupon on or after
the respective due dates expressed in such Security or Coupon or the applicable
redemption dates provided for in such Security, or to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.8 Powers and Remedies Cumulative; Delay or Omission Not Waiver
------------------------------------------------------------
of Default. Except as provided in Section 5.6, no right or remedy herein
- ----------
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein. Every power and remedy given by this Indenture, any
Security or law to the Trustee or to the Holders of Securities or Coupons may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or, subject to Section 5.6, by the Holders of Securities or Coupons.
Section 5.9 Control by Holders of Securities. The Holders of a majority
--------------------------------
in aggregate principal amount of the Securities of each series affected (with
each such series voting as a separate
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class) at the time Outstanding shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee with respect to the
Securities of such series by this Indenture; PROVIDED, that such direction shall
not be otherwise than in accordance with law and the provisions of this
Indenture; and PROVIDED, FURTHER, that (subject to the provisions of Section
6.1) the Trustee shall have the right to decline to follow any such direction if
(a) the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken; or (b) if the Trustee by its
board of directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee shall determine in good faith that the
action or proceedings so directed would involve the Trustee in personal
liability; or (c) if the Trustee in good faith shall so determine that the
actions or forbearance specified in or pursuant to such direction would be
unduly prejudicial to the interests of Holders of the Securities of all affected
series not joining in the giving of said direction, it being understood that
(subject to Section 6.1) the Trustee shall have no duty to ascertain whether or
not such actions or forbearance are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action deemed proper by the Trustee and which is not
inconsistent with such direction or directions by Securityholders.
Section 5.10 Waiver of Past Defaults. Prior to the declaration of
-----------------------
acceleration of the maturity of the Securities of any series as provided in
Section 5.1, the Holders of a majority in aggregate principal amount of the
Securities of such series at the time Outstanding (voting as a single class) may
on behalf of the Holders of all such Securities waive any past default or Event
of Default described in Section 5.1 and its consequences, except a default in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Security affected. In the case of any
such waiver, the Issuer, the Trustee and the Holders of all such Securities
shall be restored to their former positions and rights hereunder, respectively,
and such default shall cease to exist and be deemed to have been cured and not
to have occurred for purposes of this Indenture; but no such waiver shall extend
to any subsequent or other default or impair any right consequent thereon.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
Section 5.11 Trustee to Give Notice of Default, but May Withhold in
------------------------------------------------------
Certain Circumstances. The Trustee shall, within ninety days after the
- ---------------------
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of that series are then Outstanding, to the Holders
thereof, by publication at least once in an Authorized Newspaper in the Borough
of Manhattan, The City of New York and at least once in an Authorized Newspaper
in London and (ii) to all Holders of Securities of such series in the manner and
to the extent provided in Section 313(c) of the Trust Indenture Act, unless in
each case such defaults shall have been cured before the mailing or publication
of such notice (the term "default" for the purpose of this Section being hereby
defined to
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mean any event or condition which is, or with notice or lapse of time or both
would become, an Event of Default); PROVIDED, that, except in the case of
default in the payment of the principal of or interest on any of the Securities
of such series, or in the payment of any sinking fund installment on such
series, the Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee, or a trust committee of
directors or trustees and/or Responsible Officers of the Trustee in good faith
determines that the withholding of such notice is in the interests of the
Securityholders of such series.
Section 5.12 Right of Court to Require Filing of Undertaking to Pay
------------------------------------------------------
Costs. All parties to this Indenture agree, and each Holder of any Security or
- -----
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case of
any suit relating to or arising under clause (d) or (g) of Section 5.1 (if the
suit relates to Securities of more than one but less than all series), 10% in
aggregate principal amount of Securities then Outstanding and affected thereby,
or in the case of any suit relating to or arising under clause (d) or (g) (if
the suit under clause (d) or (g) relates to all the Securities then Outstanding)
or (e) or (f) of Section 5.1, 10% in aggregate principal amount of all
Securities then Outstanding, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of or interest on any Security
on or after the due date expressed in such Security or any date fixed for
redemption.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties and Responsibilities of the Trustee; During Default;
-----------------------------------------------------------
Prior to Default. Prior to the occurrence of an Event of Default with respect to
- ----------------
the Securities of a particular series and after the curing or waiving of all
Events of Default which may have occurred with respect to such series, the
Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture with respect to such series of
Securities. In case an Event of Default with respect to the Securities of a
series has occurred and has not been cured or waived, the Trustee shall exercise
with respect to such series of Securities such of the rights and powers vested
in it by this Indenture with respect to such series of Securities, 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.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
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(a) prior to the occurrence of an Event of Default with respect
to the Securities of any series and after the curing or waiving of all such
Events of Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect
to the Securities of any series shall be determined
solely by the express provisions of this Indenture, and
the Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions
expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any
such statements, certificates or opinions which by any
provision hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not
they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders pursuant to Section 5.9 relating to the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.1 are in furtherance of and subject to
Section 315 of the Trust Indenture Act.
Section 6.2 Certain Rights of the Trustee. In furtherance of and
-----------------------------
subject to the Trust Indenture Act, and subject to Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or
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document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request, direction, order or demand of the Issuer
mentioned herein shall be sufficiently evidenced by an Officer's Certificate
(unless other evidence in respect thereof is specifically prescribed herein or
in the terms established in respect of any series); and any resolution of the
Board of Directors may be evidenced to the Trustee by a copy thereof certified
by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with counsel and any written advice
or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in reliance thereon in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, appraisal, bond, debenture, note, coupon,
security or other paper or document unless (i) requested in writing so to do by
the Holders of not less than a majority in aggregate principal amount of the
Securities of all series affected then Outstanding (treated as one class) or
(ii) otherwise provided in the terms of any series of Securities pursuant to
Section 2.3; PROVIDED, that, if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such expenses or
liabilities as a condition to proceeding; the reasonable expenses of every such
investigation shall be paid by the Issuer or, if paid by the Trustee or any
predecessor trustee, shall be repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys not regularly in its employ and the Trustee shall not be
responsible for any misconduct or negligence on the part of any such agent or
attorney appointed with due care by it hereunder.
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Section 6.3 Trustee Not Responsible for Recitals, Disposition of
----------------------------------------------------
Securities or Application of Proceeds Thereof. The recitals contained herein
- ---------------------------------------------
and in the Securities, except the Trustee's certificates of authentication,
shall be taken as the statements of the Issuer, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representation as to the validity or sufficiency of this Indenture or of the
Securities or Coupons. The Trustee shall not be accountable for the use or
application by the Issuer of any of the Securities or of the proceeds thereof.
Section 6.4 Trustee and Agents May Hold Securities or Coupons;
--------------------------------------------------
Collections, Etc. The Trustee or any agent of the Issuer or of the Trustee, in
- ----------------
its individual or any other capacity, may become the owner or pledgee of
Securities or Coupons with the same rights it would have if it were not the
Trustee or such agent and may otherwise deal with the Issuer and receive,
collect, hold and retain collections from the Issuer with the same rights it
would have if it were not the Trustee or such agent.
Section 6.5 Moneys Held by Trustee. Subject to the provisions of Section
----------------------
10.4 hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Neither the Trustee nor any agent of the Issuer or
the Trustee shall be under any liability for interest on any moneys received by
it hereunder.
Section 6.6 Compensation and Indemnification of Trustee and its Prior
---------------------------------------------------------
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
- -----
and the Trustee shall be entitled to reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence or bad faith.
The Issuer also covenants to indemnify the Trustee and each predecessor trustee
for, and to hold it harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of this Indenture or the trusts hereunder
and its duties hereunder, including the costs and expenses of defending itself
against or investigating any claim of liability in the premises. The obligations
of the Issuer under this Section to compensate and indemnify the Trustee and
each predecessor trustee and to pay or reimburse the Trustee and each
predecessor trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture and the resignation or removal of the Trustee. Such
additional indebtedness shall be a senior claim to that of the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the Holders of particular Securities or
Coupons, and the Securities are hereby subordinated to such senior claim.
Section 6.7 Right of Trustee to Rely on Officer's Certificate, Etc.
-------------------------------------------------------
Subject to Sections 6.1 and 6.2, whenever in the administration of the trusts of
this Indenture the Trustee shall deem it
38
<PAGE>
necessary or desirable that a matter be proved or established prior to taking or
suffering or omitting any action hereunder, such matter (unless other evidence
in respect thereof be herein specifically prescribed) may, in the absence of
negligence or bad faith on the part of the Trustee, be deemed to be conclusively
proved and established by an Officer's Certificate delivered to the Trustee, and
such certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken, suffered or
omitted by it under the provisions of this Indenture upon the faith thereof.
Section 6.8 Indentures Not Creating Potential Conflicting Interests for
-----------------------------------------------------------
the Trustee. The following indentures are hereby specifically described for the
- -----------
purposes of Section 310(b)(1) of the Trust Indenture Act: this Indenture with
respect to series of Securities of any other series.
Section 6.9 Qualification of Trustee: Conflicting Interests. The Trustee
-----------------------------------------------
shall comply with Section 310(b) of the Trust Indenture Act.
Section 6.10 Persons Eligible for Appointment as Trustee. The Trustee for
-------------------------------------------
each series of Securities hereunder shall at all times be a corporation or
banking association organized and doing business under the laws of the United
States of America, any State thereof or the District of Columbia, having a
combined capital and surplus of at least $50,000,000, and which is authorized
under such laws to exercise corporate trust powers and is subject to supervision
or examination by Federal, state or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, 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. In case at any time the
Trustee shall cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and with the effect
specified in Section 6.11.
The provisions of this Section 6.10 are in furtherance of and subject to
Section 310(a) of the Trust Indenture Act.
Section 6.11 Resignation and Removal; Appointment of Successor Trustee.
---------------------------------------------------------
(a) The Trustee, or any trustee or trustees hereafter appointed,
may at any time resign with respect to one or more or all series of Securities
by giving written notice of resignation to the Issuer and (i) if any
Unregistered Securities of a series affected are then Outstanding, by giving
notice of such resignation to the Holders thereof, by publication at least once
in an Authorized Newspaper in the Borough of Manhattan, The City of New York,
and at least once in an Authorized Newspaper in London, (ii) if any Unregistered
Securities of a series affected are then Outstanding, by mailing notice of such
resignation to the Holders thereof who have filed their names and addresses with
the Trustee pursuant to Section 313(c)(2) of the Trust Indenture Act at such
addresses as were so furnished to the Trustee and (iii) by mailing notice of
such resignation to the Holders of then Outstanding Registered Securities of
each series affected at their addresses as they shall appear on the registry
books. Upon receiving such notice of resignation, the Issuer shall promptly
appoint a successor trustee or trustees with respect to the applicable series by
written instrument in duplicate,
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<PAGE>
executed by authority of the Board of Directors, one copy of which instrument
shall be delivered to the resigning Trustee and one copy to the successor
trustee or trustees. If no successor trustee shall have been so appointed with
respect to any series and have accepted appointment within 30 days after the
mailing of such notice of resignation, the resigning trustee may petition any
court of competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide Holder of a Security or Securities
of the applicable series for at least six months may, subject to the provisions
of Section 5.12, on behalf of himself and all others similarly situated,
petition any such court for the appointment of a successor trustee. Such court
may thereupon, after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of
Section 310(b) of the Trust Indenture Act with respect
to any series of Securities after written request
therefor by the Issuer or by any Securityholder who has
been a bona fide Holder of a Security or Securities of
such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 6.10 and Section 310(a)
of the Trust Indenture Act and shall fail to resign
after written request therefor by the Issuer or by any
Securityholder; or
(iii) the Trustee shall become incapable of acting with
respect to any series of Securities, or shall be
adjudged bankrupt or insolvent, or a receiver or
liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, the Issuer may remove the Trustee with
respect to the applicable series of Securities and appoint a successor trustee
for such series by written instrument, in duplicate, executed by order of the
Board of Directors of the Issuer, one copy of which instrument shall be
delivered to the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 315(e) of the Trust Indenture Act, any
Securityholder who has been a bona fide Holder of a Security or Securities of
such series for at least six months may on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor trustee with respect to such
series. Such court may thereupon, after such notice, if any, as it may deem
proper and so prescribe, remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering
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to the Trustee so removed, to the successor trustee so appointed and to the
Issuer the evidence provided for in Section 7.1 of the action in that regard
taken by the Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.11 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.12.
Section 6.12 Acceptance of Appointment by Successor Trustee. Any
----------------------------------------------
successor trustee appointed as provided in Section 6.11 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.4,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon request of any
such successor trustee, the Issuer shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a prior claim upon all property or funds held or collected
by such trustee to secure any amounts then due it pursuant to the provisions of
Section 6.6.
If a successor trustee is appointed with respect to the Securities of one
or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to be vested in the predecessor trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such trustees co-trustees of the same trust and that
each such trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall accept
appointment as provided in this Section 6.12 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act and eligible under the provisions of Section 6.10.
Upon acceptance of appointment by any successor trustee as provided in this
Section 6.12, the Issuer shall give notice thereof (a) if any Unregistered
Securities of a series affected are then Outstanding, to the Holders thereof, by
publication of such notice at least once in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and at least once in an Authorized
Newspaper in London, (b) if any Unregistered Securities of a series affected are
then Outstanding,
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to the Holders thereof who have filed their names and addresses with the Trustee
pursuant to Section 313(c)(2) of the Trust Indenture Act, by mailing such notice
to such Holders at such addresses as were so furnished to the Trustee (and the
Trustee shall make such information available to the Issuer for such purpose)
and (c) to the Holders of Registered Securities of each series affected, by
mailing such notice to such Holders at their addresses as they shall appear on
the registry books. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the
preceding sentence may be combined with the notice called for by Section 6.11.
If the Issuer fails to give such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Issuer.
Section 6.13 Merger, Conversion, Consolidation or Succession to Business
-----------------------------------------------------------
of Trustee. Any corporation into which the Trustee may be merged or converted
- ----------
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, PROVIDED, that such corporation shall
be qualified under Section 310(b) of the Trust Indenture Act and eligible under
the provisions of Section 6.10, without the execution or filing of any paper or
any further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any such successor
to the Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee; and in all such
cases such certificate of authentication shall have the full force which under
this Indenture or the Securities of such series it is provided that the
certificate of authentication of the Trustee shall have; PROVIDED, that the
right to adopt the certificate of authentication of any predecessor trustee or
to authenticate Securities of any series in the name of any predecessor trustee
shall apply only to its successor or successors by merger, conversion or
consolidation.
Section 6.14 Preferential Collection of Claims Against the Issuer. The
----------------------------------------------------
Trustee shall comply with Section 311(a) of the Trust Indenture Act, excluding
any creditor relationship listed in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent indicated.
Section 6.15 Appointment of Authenticating Agent. As long as any
-----------------------------------
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.9.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and
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delivery on behalf of the Trustee by an Authenticating Agent for such series and
a Certificate of Authentication executed on behalf of the Trustee by such
Authenticating Agent. Such Authenticating Agent shall at all times be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000
(determined as provided in Section 6.10 with respect to the Trustee) and subject
to supervision or examination by federal or state authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency business
of any Authenticating Agent, shall continue to be the Authenticating Agent with
respect to all series of Securities for which it served as Authenticating Agent
without the execution or filing of any paper or any further act on the part of
the Trustee or such Authenticating Agent. Any Authenticating Agent may at any
time, and if it shall cease to be eligible shall, resign by giving written
notice of resignation to the Trustee and to the Issuer.
Upon receiving such a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.15 with respect to one or more
series of Securities, the Trustee shall upon receipt of an Issuer Order appoint
a successor Authenticating Agent and the Issuer shall provide notice of such
appointment to all Holders of Securities of such series in the manner and to the
extent provided in Section 11.4. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. The Issuer agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.2, 6.3, 6.4, 6.6 and 7.3 shall be applicable to any
Authenticating Agent.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
Section 7.1 Evidence of Action Taken by Securityholders. Any request,
-------------------------------------------
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 6.1 and 6.2) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
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Section 7.2 Proof of Execution of Instruments and of Holding of
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Securities. Subject to Sections 6.1 and 6.2, the execution of any instrument by
- ----------
a Securityholder or his agent or proxy may be proved in accordance with such
reasonable rules and regulations as may be prescribed by the Trustee or in such
manner as shall be satisfactory to the Trustee. The holding of Registered
Securities shall be proved by the Security register or by a certificate of the
registrar thereof.
Section 7.3 Holders to Be Treated as Owners. The Issuer, the Trustee and
-------------------------------
any agent of the Issuer or the Trustee may deem and treat the person in whose
name any Security shall be registered upon the Security register for such series
as the absolute owner of such Security (whether or not such Security shall be
overdue and notwithstanding any notation of ownership or other writing thereon)
for the purpose of receiving payment of or on account of the principal of and,
subject to the provisions of this Indenture, interest on such Security and for
all other purposes; and neither the Issuer nor the Trustee nor any agent of the
Issuer or the Trustee shall be affected by any notice to the contrary. The
Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.
Section 7.4 Securities Owned by Issuer Deemed Not Outstanding. In
-------------------------------------------------
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any request,
demand, authorization, direction, notice, consent, waiver or other action by
Securityholders under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such action only Securities which
the Trustee knows are so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Issuer or
any other obligor upon the Securities or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer or any other obligor on the Securities. In case of a dispute as to such
right, the advice of counsel shall be full protection in respect of any decision
made by the Trustee in accordance with such advice. Upon request of the Trustee,
the Issuer shall furnish to the Trustee promptly an Officer's Certificate
listing and identifying all Securities, if any, known by the Issuer to be owned
or held by or for the account of any of the above-described persons; and,
subject to Sections 6.1 and 6.2, the Trustee shall be entitled to accept such
Officer's Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Securities not listed therein are Outstanding for the
purpose of any such determination.
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Section 7.5 Right of Revocation of Action Taken. At any time prior to (but
-----------------------------------
not after) the evidencing to the Trustee, as provided in Section 7.1, of the
taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid, any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Securityholders.
----------------------------------------------------------
The Issuer, when authorized by a resolution of its Board of Directors (which
resolution may provide general terms or parameters for such action and may
provide that the specific terms of such action may be determined in accordance
with or pursuant to an Issuer Order), and the Trustee may from time to time and
at any time enter into an indenture or indentures supplemental hereto for one or
more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Issuer pursuant to Article IX;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons, and
to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; PROVIDED, that in respect of any
such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount of
the Securities of such series to waive such an Event of Default;
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(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Issuer may deem necessary or
desirable, PROVIDED, that no such action shall adversely affect the interests of
the Holders of the Securities or Coupons;
(e) to establish the forms or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.1 and
2.3; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section
6.12.
The Trustee is hereby authorized to join with the Issuer in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed without the consent of the Holders of any of the Securities at the
time outstanding, notwithstanding any of the provisions of Section 8.2.
Section 8.2 Supplemental Indentures with Consent of Securityholders.
-------------------------------------------------------
(a) Except as set forth in paragraph (b) below, with the consent
(evidenced as provided in Article VII) of the Holders of not less than a
majority in aggregate principal amount of the Securities at the time Outstanding
of all series of Securities affected by such supplemental indenture (voting as
one class), the Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may, from
time to time and at any time, enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force and effect at the date of execution thereof) for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Securities of each such series or of the
Coupons appertaining to such Securities.
(b) No such supplemental indenture shall (i) extend the final
maturity of any Security, or reduce the principal amount thereof, or reduce the
rate or extend the time of payment of interest thereon, or reduce any amount
payable on redemption thereof, or make the principal thereof (including any
amount in respect of original issue discount), or interest thereon payable in
any coin or currency other than that provided in the Securities and Coupons or
in accordance with the
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terms thereof, or reduce the amount of the principal of an Original Issue
Discount Security that would be due and payable upon an acceleration of the
maturity thereof pursuant to Section 5.1 or the amount thereof provable in
bankruptcy pursuant to Section 5.2, or alter the provisions of Section 11.11 or
11.12 or impair or affect the right of any Securityholder to institute suit for
the payment thereof when due or, if the Securities provide therefor, any right
of repayment at the option of the Securityholder, in each case without the
consent of the Holder of each Security so affected, or (ii) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the Holders
of each Security so affected.
(c) A supplemental indenture which changes or eliminates any covenant
or other provision of this Indenture which has expressly been included solely
for the benefit of one or more particular series of Securities, or which
modifies the rights of Holders of Securities of such series, or of Coupons
appertaining to such Securities, with respect to such covenant or provision,
shall be deemed not to affect the rights under this Indenture of the Holders of
Securities of any other series or of the Coupons appertaining to such
Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution of
the Board of Directors (which resolution may provide general terms or parameters
for such action and may provide that the specific terms of such action may be
determined in accordance with or pursuant to an Issuer Order) certified by the
secretary or an assistant secretary of the Issuer authorizing the execution of
any such supplemental indenture, and upon the filing with the Trustee of
evidence of the consent of the Holders of the Securities as aforesaid and other
documents, if any, required by Section 7.1, the Trustee shall join with the
Issuer in the execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise, in which case the Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such consent shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) to the Holders of then Outstanding Registered
Securities of each series affected thereby, by mailing a notice thereof by
first-class mail to such Holders at their addresses as they shall appear on the
Security register, (ii) if any Unregistered Securities of a series affected
thereby are then Outstanding, to the Holders thereof who have filed their names
and addresses with the Trustee pursuant to Section 313(c)(2) of the Trust
Indenture Act, by mailing a notice thereof by first-class mail to such Holders
at such addresses as were so furnished to the Trustee and (iii) if any
Unregistered Securities of a series affected thereby are then Outstanding, to
all Holders thereof, by publication of a notice thereof at least once in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and at
least once in an Authorized Newspaper in London, and in each case such notice
shall set forth in general terms the substance of such supplemental indenture.
Any failure of the Issuer to give such notice, or any defect
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therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Upon the execution of any
--------------------------------
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee, subject to the
--------------------------------
provisions of Sections 6.1 and 6.2, may receive an Officer's Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
Section 8.5 Notation on Securities in Respect of Supplemental Indentures.
------------------------------------------------------------
Securities of any series authenticated and delivered after the execution of any
supplemental indenture pursuant to the provisions of this Article may bear a
notation in form approved by the Trustee for such series as to any matter
provided for by such supplemental indenture or as to any action taken by
Securityholders. If the Issuer or the Trustee shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Issuer, authenticated by the
Trustee and delivered in exchange for the Securities of such series then
Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Issuer May Consolidate, Etc., Only on Certain Terms. The
---------------------------------------------------
Issuer shall not consolidate with or merge into any other Person or transfer or
lease its properties and assets substantially as an entirety to any Person, and
the Issuer shall not permit any other Person to consolidate with or merge into
the Issuer, unless:
(a) either the Issuer shall be the continuing corporation, or the
successor corporation (if other than the Issuer) formed by such consolidation or
into which the Issuer is merged or to which the properties and assets of the
Issuer substantially as an entirety are transferred or leased shall be a
corporation organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of the Issuer
under the Securities and this Indenture; and
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(b) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the Issuer or a
Subsidiary as a result of such transaction as having been incurred by the Issuer
or such Subsidiary at the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would become an Event of
Default, shall have happened and be continuing.
Section 9.2 Successor Corporation Substituted. In case of any such
---------------------------------
consolidation, merger, sale, lease or conveyance, and following such an
assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein. Such successor corporation may cause to be signed, and may
issue either in its own name or in the name of the Issuer prior to such
succession any or all of the Securities issuable hereunder which together with
any Coupons appertaining thereto theretofore shall not have been signed by the
Issuer and delivered to the Trustee; and, upon the order of such successor
corporation, instead of the Issuer, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities together with any Coupons appertaining thereto
which previously shall have been signed and delivered by the officers of the
Issuer to the Trustee for authentication, and any Securities which such
successor corporation thereafter shall cause to be signed and delivered to the
Trustee for that purpose. All of the Securities so issued together with any
Coupons appertaining thereto shall in all respects have the same legal rank and
benefit under this Indenture as the Securities theretofore or thereafter issued
in accordance with the terms of this Indenture as though all of such Securities
had been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance such
changes in phrasing and form (but not in substance) may be made in the
Securities and Coupons thereafter to be issued as may be appropriate.
In the event of any such sale or conveyance (other than a conveyance by way
of lease) the Issuer or any successor corporation which shall theretofore have
become such in the manner described in this Article shall be discharged from all
obligations and covenants under this Indenture and the Securities and may be
liquidated and dissolved.
Section 9.3 Opinion of Counsel to Be Given Trustee. The Trustee, subject
--------------------------------------
to the provisions of Sections 6.1 and 6.2, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale or conveyance, and
any such assumption, complies with the provisions of this Article IX.
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ARTICLE X
SATISFACTION AND DISCHARGE
OF INDENTURE; UNCLAIMED MONEYS
Section 10.1 Satisfaction and Discharge of Indenture.
---------------------------------------
(a) If at any time (i) the Issuer shall have paid or caused to be
paid the principal of and interest on all the Securities of any series
Outstanding hereunder and all unmatured Coupons appertaining thereto (other than
Securities of such series and Coupons appertaining thereto which have been
destroyed, lost or stolen and which have been replaced or paid as provided in
Section 2.9) as and when the same shall have become due and payable, or (ii) the
Issuer shall have delivered to the Trustee for cancellation all Securities of
any series theretofore authenticated and all unmatured Coupons appertaining
thereto (other than any Securities of such series and Coupons appertaining
thereto which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.9) or (iii) in the case of any
series of Securities where the exact amount (including the currency of payment)
of principal of and interest due on which can be determined at the time of
making the deposit referred to in clause (b) below, (a) all the Securities of
such series and all unmatured Coupons appertaining thereto not theretofore
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and (b) the Issuer shall have
irrevocably deposited or caused to be deposited with the Trustee as trust funds
in trust the entire amount in (i) cash (other than moneys repaid by the Trustee
or any paying agent to the Issuer in accordance with Section 10.4), (ii) in the
case of any series of Securities the payments on which may only be made in
Dollars, direct obligations of the United States of America, backed by its full
faith and credit ("U.S. Government Obligations"), maturing as to principal and
interest at such times and in such amounts as will insure the availability of
cash sufficient to pay at such maturity or upon such redemption, as the case may
be, or (iii) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee, to pay (x) the principal and
interest on all Securities of such series and Coupons appertaining thereto on
each date that such principal or interest is due and payable and (y) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such
series; and if, in any such case, the Issuer shall also pay or cause to be paid
all other sums payable hereunder by the Issuer, then this Indenture shall cease
to be of further effect (except as to (i) rights of registration of transfer and
exchange of Securities of such Series and of Coupons appertaining thereto
pursuant to Section 2.8 and the Issuer's right of optional redemption, if any,
(ii) substitution of mutilated, defaced, destroyed, lost or stolen Securities or
Coupons, (iii) rights of holders of Securities and Coupons appertaining thereto
pursuant to Section 2.8 to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (iv) any optional redemption rights of such series of
Securities to the extent to be exercised to make such call for redemption within
one year, (v) the rights, obligations, duties and immunities of the Trustee
hereunder, including those under Section 6.6, (vi) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to
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the property so deposited with the Trustee payable to all or any of them, and
(vii) the obligations of the Issuer under Section 3.2) and the Trustee, on
demand of the Issuer accompanied by an Officer's Certificate and an Opinion of
Counsel and at the cost and expense of the Issuer, shall execute proper
instruments acknowledging such satisfaction of and discharging this Indenture;
PROVIDED, that the rights of Holders of the Securities and Coupons to receive
amounts in respect of principal of and interest on the Securities and Coupons
held by them shall not be delayed longer than required by then-applicable
mandatory rules or policies of any securities exchange upon which the Securities
are listed. The Issuer agrees to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred and to compensate the Trustee for
any services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Securities of such series.
(b) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.3.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (a) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the date of the deposit referred to in subparagraph (a) below, and the
provisions of this Indenture with respect to the Securities of such series and
Coupons appertaining thereto shall no longer be in effect (except as to (i)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto pursuant to Section 2.8 and the Issuer's right
of optional redemption, if any, (ii) substitution of mutilated, defaced,
destroyed, lost or stolen Securities or Coupons, (iii) rights of Holders of
Securities and Coupons appertaining thereto to receive payments of principal
thereof and interest thereon, upon the original stated due dates therefor (but
not upon acceleration), and remaining rights of the Holders to receive mandatory
sinking fund payments, if any, (iv) any optional redemption rights of such
series of Securities to the extent to be exercised to make such call for
redemption within one year, (v) the rights, obligations, duties and immunities
of the Trustee hereunder, (vi) the rights of the Holders of Securities of such
series and Coupons appertaining thereto as beneficiaries hereof with respect to
the property so deposited with the Trustee payable to all or any of them and
(vii) the obligations of the Issuer under Section 3.2) and the Trustee, at the
expense of the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if
(i) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the
Trustee as trust funds in trust, specifically pledged as
security for, and dedicated solely to, the benefit of the
Holders of the Securities of such series and Coupons
appertaining thereto (i) cash in an amount, or (ii) in the
case of any series of Securities the payments on which may
only be made in Dollars, U.S. Government Obligations,
maturing as to principal and interest at such times and in
such amounts as will insure the availability of cash or (iii)
a combination thereof, sufficient, in the opinion of a
nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to
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the Trustee, to pay (A) the principal and interest on all
Securities of such series and Coupons appertaining thereto
on each date that such principal or interest is due and
payable and (B) any mandatory sinking fund payments on the
dates on which such payments are due and payable in
accordance with the terms of the Indenture and the
Securities of such series;
(ii) such deposit will not result in a breach or violation of,
or constitute a default under, any agreement or instrument
to which the Issuer is a party or by which it is bound;
(iii) the Issuer has delivered to the Trustee an opinion of
counsel from a law firm experienced in such matters based
on the fact that (x) the Issuer has received from, or there
has been published by, the IRS a ruling or (y) since the
date hereof, there has been a change in the applicable
United States federal income tax law, in either case to the
effect that, and such opinion shall confirm that, the
Holders of the Securities of such series and Coupons
appertaining thereto will not recognize income, gain or
loss for United States federal income tax purposes as a
result of such deposit, defeasance and discharge and will
be subject to United States federal income tax on the same
amount and in the same manner and at the same times, as
would have been the case if such deposit, defeasance and
discharge had not occurred;
(iv) the Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following the
deposit, the trust funds will not be subject to avoidance
as a preferential transfer under Section 547(b) of the
United States Bankruptcy Code (except with respect to any
Holder that is an "insider" of the Issuer within the
meaning of the United States Bankruptcy Code);
(v) the Issuer has delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that
all conditions precedent provided for relating to the
defeasance contemplated by this provision have been
complied with; and
(vi) no event or condition shall exist that, pursuant to the
provisions of Section 13.2, would prevent the Issuer from
making payments of the principal of or interest on the
Securities of such series and Coupons appertaining thereto
on the date of such deposit or at any time during the
period ending on the 61/st/ day after the date of such
deposit (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
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(c) The Issuer shall be released from its obligations under Sections
3.6, 3.7 and 9.1 and unless otherwise provided for in the Board Resolution,
Officer's Certificate or Indenture supplemental hereto establishing such series
of Securities, from all covenants and other obligations referred to in Section
2.3(19) or 2.3(21) with respect to such series of Securities, and any Coupons
appertaining thereto, outstanding on and after the date the conditions set forth
below are satisfied (hereinafter, "covenant defeasance"). For this purpose, such
covenant defeasance means that, with respect to the Outstanding Securities of
any series, the Issuer may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in such Section, whether
directly or indirectly by reason of any reference elsewhere herein to such
Section or by reason of any reference in such Section to any other provision
herein or in any other document and such omission to comply shall not constitute
an Event of Default under Section 5.1, but the remainder of this Indenture and
such Securities and Coupons shall be unaffected thereby. The following shall be
the conditions to application of this subsection (c) of this Section 10.1:
(i) The Issuer has irrevocably deposited or caused to be
deposited with the Trustee as trust funds in trust for the
purpose of making the following payments, specifically
pledged as security for, and dedicated solely to, the
benefit of the holders of the Securities of such series and
coupons appertaining thereto, (i) cash in an amount, or
(ii) in the case of any series of Securities the payments
on which may only be made in Dollars, U.S. Government
Obligations maturing as to principal and interest at such
times and in such amounts as will insure the availability
of cash or (iii) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent
public accountants expressed in a written certification
thereof delivered to the Trustee, to pay (A) the principal
and interest on all Securities of such series and Coupons
appertaining thereof and (B) any mandatory sinking fund
payments on the day on which such payments are due and
payable in accordance with the terms of the Indenture and
the Securities of such series;
(ii) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default with respect
to the Securities shall have occurred and be continuing on
the date of such deposit or, insofar as subsections 5.1(d)
and 5.1(e) are concerned, at any time during the period
ending on the 61/st/ day after the date of such deposit (it
being understood that this condition shall not be deemed
satisfied until the expiration of such period );
(iii) Such covenant defeasance shall not cause the Trustee to
have a conflicting interest as defined in Section 6.9 and
for purposes of the Trust Indenture Act with respect to any
securities of the Issuer;
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(iv) Such covenant defeasance shall not result in a breach or
violation of, or constitute a default under any agreement
or instrument to which the Issuer is a party or by which
it is bound;
(v) Such covenant defeasance shall not cause any Securities
then listed on any registered national securities exchange
under the Exchange Act to be delisted;
(vi) The Issuer shall have delivered to the Trustee an
Officer's Certificate and an opinion of counsel from a law
firm experienced in such maters to the effect that the
Holders of the Securities of such series and Coupons
appertaining thereto will not recognize income, gain or
loss for United States federal income tax purposes as a
result of such covenant defeasance and 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 covenant defeasance had not occurred;
(vii) The Issuer has delivered to the Trustee an Opinion of
Counsel to the effect that after the 91st day following
the deposit, the trust funds will not be subject to
avoidance as a preferential transfer under Section 547(b)
of the United States Bankruptcy Code (except with respect
to any Holder that is an "insider" of the Issuer within
the meaning of the United States Bankruptcy Code);
(viii) The Issuer shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent provided for
relating to the covenant defeasance contemplated by this
provision have been complied with; and
(ix) No event or condition shall exist that, pursuant to the
provisions of Section 13.2, would prevent the Issuer from
making payments of the principal of or interest on the
Securities of such series and Coupons appertaining thereto
on the date of such deposit or at any time during the
period ending on the 61/st/ day after the date of such
deposit (it being understood that this condition shall not
be deemed satisfied until the expiration of such period).
Section 10.2 Application by Trustee of Funds Deposited for Payment of
--------------------------------------------------------
Securities. Subject to Section 10.4, all moneys deposited with the Trustee (or
- ----------
other trustee) pursuant to Section 10.1 shall be held in trust and applied by it
to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for
54
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principal and interest; but such money need not be segregated from other funds
except to the extent required by law.
Section 10.3 Repayment of Moneys Held by Paying Agent. In connection with
----------------------------------------
the satisfaction and discharge of this Indenture with respect to Securities of
any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
Section 10.4 Return of Moneys Held by Trustee and Paying Agent Unclaimed
-----------------------------------------------------------
for Two Years. Any moneys deposited with or paid to the Trustee or any paying
- -------------
agent for the payment of the principal of or interest on any Security of any
series and of any Coupons attached thereto and not applied but remaining
unclaimed for two years after the date upon which such principal or interest
shall have become due and payable, shall, upon the written request of the Issuer
and unless otherwise required by mandatory provisions of applicable escheat or
abandoned or unclaimed property law, be repaid to the Issuer by the Trustee for
such series or such paying agent, and the Holder of the Securities of such
series and of any Coupons appertaining thereto shall, unless otherwise required
by mandatory provisions of applicable escheat or abandoned or unclaimed property
laws, thereafter look only to the Issuer for any payment which such Holder may
be entitled to collect, and all liability of the Trustee or any paying agent
with respect to such moneys shall thereupon cease; PROVIDED, that the Trustee or
such paying agent, before being required to make any such repayment with respect
to moneys deposited with it for any payment (a) in respect of Registered
Securities of any series, shall at the expense of the Issuer, mail by first-
class mail to Holders of such Securities at their addresses as they shall appear
on the Security register, and (b) in respect of Unregistered Securities of any
series, shall at the expense of the Issuer cause to the published once, in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and once
in an Authorized Newspaper in London, notice, that such moneys remain and that,
after a date specified therein, which shall not be less than thirty days from
the date of such mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer.
Section 10.5 Indemnity for U.S. Government Obligations. The Issuer shall
-----------------------------------------
pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section
10.1 or the principal or interest received in respect of such obligations.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.1 Incorporators, Shareholders, Officers and Directors of
------------------------------------------------------
Issuer Exempt from Individual Liability. No recourse under or upon any
- ---------------------------------------
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such, or against any past, present or future shareholder,
officer or director, as such, of the Issuer or of any successor, either directly
or through the Issuer or any successor, under any rule of law, statute or
constitutional provision or by the enforcement of any
55
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assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance of the
Securities and the Coupons, if any, appertaining thereto by the Holders thereof
and as part of the consideration for the issue of the Securities and the Coupons
appertaining thereto.
Section 11.2 Provisions of Indenture for the Sole Benefit of Parties and
-----------------------------------------------------------
Holders of Securities and Coupons. Nothing in this Indenture, in the Securities
- ---------------------------------
or in the Coupons appertaining thereto, expressed or implied, shall give or be
construed to give to any person, firm or corporation, other than the parties
thereto and their successors and the Holders of the Securities or Coupons, if
any, any legal or equitable right, remedy or claim under this Indenture or under
any covenant or provision herein contained, all such covenants and provisions
being for the sole benefit of the parties hereto and their successors and of the
Holders of the Securities or Coupons, if any.
Section 11.3 Successors and Assigns of Issuer Bound by Indenture. All the
---------------------------------------------------
covenants, stipulations, promises and agreements in this Indenture contained by
or in behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
Section 11.4 Notices and Demands on Issuer, Trustee and Holders of
-----------------------------------------------------
Securities and Coupons. Any notice or demand which by any provision of this
- ----------------------
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons, if any, to or on the Issuer may be given
or served by being deposited postage prepaid, first-class mail (except as
otherwise specifically provided herein) addressed (until another address of the
Issuer is filed by the Issuer with the Trustee) to Torchmark Corporation, 2001
Third Avenue South, Birmingham, Alabama 35233, Attention: General Counsel. Any
notice, direction, request or demand by the Issuer or any Holder of Securities
or Coupons, if any, to or upon the Trustee shall be deemed to have been
sufficiently given or served by being deposited postage prepaid, first-class
mail (except as otherwise specifically provided herein) addressed (until another
address of the Trustee is filed by the Trustee with the Issuer) to The First
National Bank of Chicago, One First National Plaza, Suite 0126, Chicago,
Illinois 60670-0126, Attention: Corporate Trust Services.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class mail, postage prepaid,
to each Holder entitled thereto, at his last address as it appears in the
Security register.
Where this Indenture provides for notice to holders of Unregistered
Securities, such notice shall be sufficiently given (unless otherwise expressly
provided herein) by giving notice to such Holders (a) by publication of such
notice at least once in an Authorized Newspaper in the Borough of Manhattan, The
City of New York, and at least once in an Authorized Newspaper in London, and
(ii) by mailing such notice to the Holders of Unregistered Securities who have
filed their names and addresses with the Trustee pursuant to Section 313(c)(2)
of the Trust Indenture Act at such addresses as were so furnished to the
Trustee.
In any case where notice to such Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of
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such notice with respect to other Holders. Where this Indenture provides for
notice in any manner, such notice may be waived in writing by the person
entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Issuer when such notice
is required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be reasonably satisfactory to the Trustee
shall be deemed to be a sufficient giving of such notice.
Section 11.5 Officer's Certificates and Opinions of Counsel; Statements
----------------------------------------------------------
to Be Contained Therein. Upon any application or demand by the Issuer to the
- -----------------------
Trustee to take any action under any of the provisions of this Indenture, the
Issuer shall furnish to the Trustee an Officer's Certificate stating that all
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition, (b) a brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an
57
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accountant or firm of accountants in the employ of the Issuer, unless such
officer or counsel, as the case may be, knows that the certificate or opinion of
or representations with respect to the accounting matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such firm
is independent.
Section 11.6 Payments Due on Saturdays, Sundays and Holidays. If the date
-----------------------------------------------
of maturity of interest on or principal of the Securities of any series or any
Coupons appertaining thereto or the date fixed for redemption or repayment of
any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
Section 11.7 Conflict of Any Provision of Indenture with Trust Indenture
-----------------------------------------------------------
Act. If any provision of this Indenture limits, qualifies or conflicts with the
- ---
duties imposed by any of Sections 310 to 318, inclusive, of the Trust Indenture
Act through operation of Section 318(c) thereof, such imposed duties shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act which may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 11.8 New York Law to Govern. THIS INDENTURE AND EACH SECURITY
-----------------------
AND COUPON SHALL BE DEEMED TO BE A CONTRACT UNDER THE LAWS OF THE STATE OF NEW
YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE INCLUDING, WITHOUT LIMITATION, SECTION 5-140 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
Section 11.9 Counterparts. This Indenture may be executed in any number
------------
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 11.10 Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
Section 11.11 Securities in a Composite Currency, Currency Unit, Foreign
----------------------------------------------------------
Currency or in ECU. Unless otherwise specified in an Officer's Certificate
- ------------------
delivered pursuant to Section 2.3 of this Indenture with respect to a particular
series of Securities, whenever for purposes of this Indenture any action may be
taken by the Holders of a specified percentage in aggregate principal amount of
Securities of all series or all series affected by a particular action at the
time Outstanding and, at such time, there are Outstanding Securities of any
series which are denominated in a coin, currency or currencies other than
Dollars (including, but not limited to, any composite currency, currency units,
Foreign Currency or ECUs), then the principal amount of Securities of such
series which shall be deemed to be Outstanding for the purpose of taking such
action shall be that amount
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of Dollars that could be obtained for such amount at the Market Exchange Rate.
For purposes of this Section 11.11, Market Exchange Rate shall mean the noon
Dollar buying rate in The City of New York for cable transfers of such currency
or currencies as published by the Federal Reserve Bank of New York as of the
most recent available date; PROVIDED THAT, in the case of ECUs, Market Exchange
Rate shall mean the rate of exchange determined by the Commission of the
European Communities (or any successor thereto) as published in the Official
Journal of the European Communities (such publication or any successor
publication, the "Journal") as of the most recent available date. If such Market
Exchange Rate is not so available for any reason with respect to such currency,
the Trustee shall use, in its sole discretion and without liability on its part,
such quotation of the Federal Reserve Bank of New York or, in the case of ECUs,
the rate of exchange as published in the Journal, as of the most recent
available date, or quotations or, in the case of ECUs, rates of exchange from
one or more major banks in The City of New York or in the country of issue of
the currency in question, which for purposes of the ECU shall be Brussels,
Belgium, or such other quotations or, in the case of ECU, rates of exchange as
the Trustee shall deem appropriate. The provisions of this paragraph shall apply
in determining the equivalent principal amount in respect of Securities of a
series denominated in a currency other than Dollars in connection with any
action taken by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
Section 11.12 Judgment Currency. The Issuer agrees, to the fullest extent
-----------------
that it may effectively do so under applicable law, that (a) if for the purpose
of obtaining judgment in any court it is necessary to convert the sum due in
respect of the principal of or interest on the Securities of any series (the
"Required Currency") into a currency in which a judgment will be rendered (the
"Judgment Currency"), the rate of exchange used shall be the rate at which in
accordance with normal banking procedures the Trustee could purchase in The City
of New York the Required Currency with the Judgment Currency on the day on which
final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York
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or a day on which banking institutions in The City of New York are authorized or
required by law or executive order to close.
ARTICLE XII
REDEMPTION OF SECURITIES AND SINKING FUNDS
Section 12.1 Applicability of Article. The provisions of this Article
------------------------
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.3 for
Securities of such series.
Section 12.2 Notice of Redemption; Partial Redemptions. Notice of
-----------------------------------------
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, at least 30 days
and not more than 60 days prior to the date fixed for redemption to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books. Notice of redemption to the Holders of Unregistered
Securities to be redeemed as a whole or in part, who have filed their names and
addresses with the Trustee pursuant to Section 313(c)(2) of the Trust Indenture
Act shall be given by mailing notice of such redemption, by first class mail,
postage prepaid, at least 30 days and not more than 60 prior to the date fixed
for redemption, to such Holders at such addresses as were so furnished to the
Trustee (and, in the case of any such notice given by the Issuer, the Trustee
shall make such information available to the Issuer for such purpose). Notice of
redemption to all other Holders of Unregistered Securities shall be published in
an Authorized Newspaper in the Borough of Manhattan, The City of New York and in
an Authorized Newspaper in London, in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30 nor more
than 60 days prior to the date fixed for redemption. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Failure to give notice by
mail, or any defect in the notice to the Holder of any Security of a series
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of such Security of such series.
The notice of redemption to each such Registered Holder shall specify the
principal amount of each Security of such series held by such Registered Holder
to be redeemed, the date fixed for redemption, the redemption price, the place
or places of payment, that payment will be made upon presentation and surrender
of such Securities and, in the case of Securities with Coupons attached thereto,
of all Coupons appertaining thereto maturing after the date fixed for
redemption, that such redemption is pursuant to the mandatory or optional
sinking fund, or both, if such be the case, that interest accrued to the date
fixed for redemption will be paid as specified in such notice and that on and
after said date interest thereon or on the portions thereof to be redeemed will
cease to accrue. In case any Security of a series is to be redeemed in part
only, the notice of redemption to Registered Holders of Securities of the series
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
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The notice of redemption of Securities of any series to be redeemed at the
option of the Issuer shall be given by the Issuer or, at the Issuer's request,
by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.4) an
amount of money sufficient to redeem on the redemption date all the Securities
of such series so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption. The Issuer will
deliver to the Trustee at least 70 days prior to the date fixed for redemption,
or such shorter period as shall be acceptable to the Trustee, an Officer's
Certificate stating the aggregate principal amount of Securities to be redeemed.
In case of a redemption at the election of the Issuer prior to the expiration of
any restriction on such redemption, the Issuer shall deliver to the Trustee,
prior to the giving of any notice of redemption to Holders pursuant to this
Section, an Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the Trustee
shall select, in such manner as it shall deemed appropriate and fair, in its
sole discretion, Securities of such series to be redeemed in whole or in part.
Securities may be redeemed in part in multiples equal to the minimum authorized
denomination for Securities of such series or any multiple thereof. The Trustee
shall promptly notify the Issuer in writing of the Securities of such series
selected for redemption and, in the case of any Securities of such series
selected for partial redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
Section 12.3 Payment of Securities Called for Redemption. If notice of
-------------------------------------------
redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.5 and 10.4, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; PROVIDED, that
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holder of such Registered
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Securities registered as such on the relevant record date, subject to the terms
and provisions of Section 2.3 and 2.7 hereof.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal shall, until paid or duly provided for,
bear interest from the date fixed for redemption at the rate of interest or
Yield to Maturity (in the case of an Original Issue Discount Security) borne by
such Security.
If any Security with Coupons attached thereto is surrendered for redemption
and is not accompanied by all appurtenant Coupons maturing after the date fixed
for redemption, the surrender of such missing Coupon or Coupons may be waived by
the Issuer and the Trustee, if there be furnished to each of them such security
or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer shall
execute and the Trustee shall authenticate and deliver to or on the order of the
Holder thereof, at the expense of the Issuer, a new Security or Securities of
such series, of authorized denominations, in principal amount equal to the
unredeemed portion of the Security so presented.
Section 12.4 Exclusion of Certain Securities from Eligibility for
----------------------------------------------------
Selection for Redemption. Securities shall be excluded from eligibility for
- ------------------------
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by, either (a)
the Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
Section 12.5 Mandatory and Optional Sinking Funds. The minimum amount of
------------------------------------
any sinking fund payment provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking fund payment," and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment." The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date."
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.10, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c) receive credit for
Securities of such series (not previously so credited) redeemed by the Issuer
through any optional redemption provision contained in the terms of such series.
Securities so delivered or credited shall be received or credited by the Trustee
at the sinking fund redemption price specified in such Securities.
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On or before the 60th day next preceding each sinking fund payment date for
any series, the Issuer will deliver to the Trustee an Officer's Certificate
(which need not contain the statements required by Section 11.5) (a) specifying
the portion of the mandatory sinking fund payment to be satisfied by payment of
cash and the portion to be satisfied by credit of Securities of such series and
the basis for such credit, (b) stating that none of the Securities of such
series has theretofore been so credited, (c) stating that no defaults in the
payment of interest or Events of Default with respect to such series have
occurred (which have not been waived or cured) and are continuing and (d)
stating whether or not the Issuer intends to exercise its right to make an
optional sinking fund payment with respect to such series and, if so, specifying
the amount of such optional sinking fund payment which the Issuer intends to pay
on or before the next succeeding sinking fund payment date. Any Securities of
such series to be credited and required to be delivered to the Trustee in order
for the Issuer to be entitled to credit therefor as aforesaid which have not
theretofore been delivered to the Trustee shall be delivered for cancellation
pursuant to Section 2.10 to the Trustee with such Officer's Certificate (or
reasonably promptly thereafter if acceptable to the Trustee). Such Officer's
Certificate shall be irrevocable and upon its receipt by the Trustee, the Issuer
shall become unconditionally obligated to make all the cash payments or payments
therein referred to, if any, on or before the next succeeding sinking fund
payment date. Failure of the Issuer, on or before any such 60th day, to deliver
such Officer's Certificate and Securities specified in this paragraph, if any,
shall not constitute a default but shall constitute, on and as of such date, the
irrevocable election of the Issuer (i) that the mandatory sinking fund payment
for such series due on the next succeeding sinking fund payment date shall be
paid entirely in cash without the option to deliver or credit Securities of such
series in respect thereof and (ii) that the Issuer will make no optional sinking
fund payment with respect to such series as provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both) to
be made in cash on the next succeeding sinking fund payment date plus any unused
balance of any preceding sinking fund payments made in cash shall exceed $50,000
(or the equivalent thereof in any composite currency, currency units, Foreign
Currency or ECU) or a lesser sum in Dollars (or the equivalent thereof in any
composite currency, currency units, Foreign Currency or ECU) if the Issuer shall
so request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption. If such amount
shall be $50,000 (or the equivalent thereof in any composite currency, currency
units, Foreign Currency or ECU) or less and the Issuer makes no such request
then it shall be carried over until a sum in excess of $50,000 (or the
equivalent thereof in any composite currency, currency units, Foreign Currency
or ECU) is available. The Trustee shall select, in the manner provided in
Section 12.2, for redemption on such sinking fund payment date a sufficient
principal amount of Securities of such series to absorb said cash, as nearly as
may be, and shall (if requested in writing by the Issuer) inform the Issuer of
the serial numbers of the Securities of such series (or portions thereof) so
selected. Securities shall be excluded from eligibility for redemption under
this Section if they are identified by registration and certificate number in an
Officer's Certificate delivered to the Trustee at least 60 days prior to the
sinking fund payment date as being owned of record and beneficially by, and not
pledged or hypothecated by, either (a) the Issuer or (b) an entity specifically
identified in such Officer's Certificate as directly or indirectly controlling
or controlled by or under direct or indirect common control with the Issuer. The
Trustee, in the name and at the expense of the Issuer (or the
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Issuer, if it shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 12.2 (and with the effect provided in Section 12.3)
for the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated to
the redemption of Securities of such series shall be added to the next cash
sinking fund payment for such series and, together with such payment, shall be
applied in accordance with the provisions of this Section. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any particular
series (or earlier, if such maturity is accelerated), which are not held for the
payment or redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the
payment of the principal of, and interest on, the Securities of such series at
maturity.
On or before each sinking fund payment date, the Issuer shall pay to the
Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of a
series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default be deemed to have been collected
under Article Five and held for the payment of all such Securities. In case such
Event of Default shall have been waived as provided in Section 5.10 or the
default cured on or before the sixtieth day preceding the sinking fund payment
date in any year, such moneys shall thereafter be applied on the next succeeding
sinking fund payment date in accordance with this Section to the redemption of
such Securities.
ARTICLE XIII
SUBORDINATION OF SECURITIES
Section 13.1 Securities Subordinate to Senior Indebtedness. The Issuer
---------------------------------------------
covenants and agrees, and each Holder of Securities, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article, the payment of the principal of (and premium, if any)
and interest on each and all of the Securities of each and every series are
hereby expressly made subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness.
Section 13.2 No Payment When Senior Indebtedness in Default; Payment over
------------------------------------------------------------
of Proceeds Upon Dissolution , Etc. If the Issuer shall default in the payment
- ----------------------------------
of any principal of (or premium, if any) or interest on any Senior Indebtedness
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration of acceleration or otherwise,
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then, upon written notice of such default to the Issuer by the holders of Senior
Indebtedness or any trustee therefore, unless and until such default shall have
been cured or waived or shall have ceased to exist, no direct or indirect
payment (in cash, property, securities, by set-off or otherwise) shall be made
or agreed to be made on account of the principal of (or premium, if any) or
interest on any of the Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Securities.
In the event of (a) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceedings relating
to the Issuer, its creditors or its property, (b) any proceeding for the
liquidation, dissolution, or other winding up of the Issuer, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (c)
any assignment by the Issuer for the benefit of creditors or (d) any other
marshalling of the assets of the Issuer (each such event, if any, herein
sometimes referred to as a "Proceeding"), all Senior Indebtedness (including any
interest thereon accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution, whether in cash,
securities or other property (other than securities of the Issuer or any other
corporation provided for by a plan of reorganization or readjustment the payment
of which is subordinate, at least to the extent provided in these subordination
provisions with respect to the indebtedness evidenced by the Securities, to the
payment of all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination provisions) be
payable or deliverable in respect of the Securities of any series shall be paid
or delivered directly to the holders of Senior Indebtedness in accordance with
the priorities then existing among such holders until all Senior Indebtedness
(including any interest thereon accruing after the commencement of any
Proceeding) shall have been paid in full.
In the event of any Proceeding, after payment in full of all sums owing
with respect to Senior Indebtedness, the Holders of Securities, together with
the holders of any obligations of the Issuer ranking on a parity with the
Securities, shall be entitled to be paid form the remaining assets of the Issuer
the amounts at the time due and owing on account of unpaid principal of (and
premium, if any) and interest on the Securities and such other obligations
before any payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or any obligations of
the Issuer ranking junior to the Securities and such other obligations. If,
notwithstanding the foregoing any payment or distribution of any character or
any security, whether in cash, securities or other property (other than
securities of the Issuer or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in these subordination provisions with respect to the
indebtedness evidenced by the Securities, to the payment of all Senior
Indebtedness at the time outstanding and to any securities issued in respect
thereof under any such plan of reorganization or readjustment), shall be
received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Indebtedness shall have been paid in full, such
payment or distribution or security shall be received in trust for the benefit
of, and shall be paid over or delivered and transferred to, the holders of the
Senior Indebtedness at the time outstanding in accordance with the priorities
then existing among such holders for application to the payment of all Senior
Indebtedness in full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or
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security, each holder of Senior Indebtedness is hereby irrevocably authorized to
endorse or assign the same.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Indebtedness or consent to the filing of a financing statement with respect
hereto) as may, in the opinion of counsel designated by the holders of a
majority in principal amount of the Senior Indebtedness at the time outstanding,
be necessary or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights, interests,
remedies or powers of any secured creditor of the Issuer in respect of any
security interest the creation of which is not prohibited by the provisions of
this Indenture.
The securing of any obligations of the Issuer, otherwise ranking on a
parity with the Securities or ranking junior to the Securities, shall not be
deemed to prevent such obligations from constituting, respectively, obligations
ranking on a parity with the Securities or ranking junior to the Securities.
Section 13.3 Payment Permitted If No Default. Nothing contained in this
-------------------------------
Article or elsewhere in this Indenture or in any of the Securities shall prevent
(a) the Issuer, at any time, except during the pendency of the conditions
described in the first paragraph of Section 13.2 or of any Proceeding referred
to in Section 13.2, from making payments at any time of principal of (and
premium, if any) or interest on the Securities, or (b) the application by the
Trustee of any moneys deposited with it hereunder to the payment of or on
account of the principal of (and premium, if any) or interest on the Securities
or the retention of such payment by the Holders, if, at the time of such
application by the Trustee, it did not have knowledge that such payment would
have been prohibited by the provisions of this Article.
Section 13.4 Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all amounts due or to become due on all Senior
Indebtedness, or the provision for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Indebtedness, the
Holders of Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Indebtedness pursuant to the
provisions of this Article (equally and ratably with the holders of all
indebtedness of the Issuer that by its express terms is subordinated to Senior
Indebtedness of the Issuer that to substantially the same extent as the
Securities are subordinated to the Senior Indebtedness and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Indebtedness) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the Holders of
Securities or the Trustee would be entitled except for the provisions of this
Article to the holders of Senior Indebtedness by Holders of the Securities or
the Trustee, shall, as among the Issuer, its creditors other than holders of
Senior Indebtedness, and the Holders of Securities, be deemed to be a payment or
distribution by the Issuer to or on account of the Senior Indebtedness.
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Section 13.5 Provisions Solely to Define Relative Rights. The provisions
-------------------------------------------
of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of Securities on the one hand and the holders of
Senior Indebtedness on the other hand. Nothing contained in this Article or
elsewhere in this Indenture or in the Securities is intended to or shall (a)
impair, as between the Issuer and the Holders of Securities, the obligations of
the Issuer, which are absolute and unconditional, to pay to the Holders of
Securities the principal of (and premium, if any) and interest on the Securities
as and when the same shall become due and payable in accordance with their
terms; or (b) affect the relative rights against the Issuer of the Holders
Securities and creditors of the Issuer other than their rights in relation to
the holders of Senior Indebtedness, or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, including filing and voting claims in any
Proceeding, subject to the rights, if any, under this Article of the holders of
Senior Indebtedness to receive cash, property and securities otherwise payable
or deliverable to the Trustee or such Holder.
Section 13.6 Trustee to Effectuate Subordination. Each Holder of a
-----------------------------------
Security by his or her acceptance thereof authorizes and directs the Trustee on
his or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Section 13.7 No Waiver of Subordination Provisions. No right or any
-------------------------------------
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Issuer or by any act or failure to act,
in good faith, by any such holder, or by any noncompliance by the Issuer with
the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of Senior Indebtedness may, at any time and from time to
tome, without the consent of or notice to the Trustee or the Holders of
Securities of any series, without incurring responsibility to such Holders of
Securities and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of such Holders of Securities to the
holders of Senior Indebtedness, do any one or more of the following: (i) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Senior Indebtedness , or otherwise amend or supplement in any manner
Senior Indebtedness or any instrument evidencing the same or any agreement under
which Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Issuer and any other Person.
Section 13.8 Notice to Trustee. The Issuer shall give prompt written
-----------------
notice to the Trustee of any fact known to the Issuer that would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Issuer or a holder of Senior
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Indebtedness or from any trustee, agent or representative therefor; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section at least two Business Days prior to the date upon which by the
terms hereof any monies may become payable for any purpose (including, the
payment of the principal of (and premium, if any, on) or interest on any
Security), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
or herself to be a holder of Senior Indebtedness (or a trustee of attorney-in-
fact therefor) to establish that such notice has been given by a holder of
Senior Indebtedness (or a trustee or attorney-in-fact thereof). In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Senior Indebtedness to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness held by such Person, the
extent to which such Person is entitled to participate in such payment or
distribution and any other facts pertinent to the rights of such Person under
this Article, and if such evidence is not furnished, the Trustee may defer any
payment to such Person pending judicial determination as to the right of such
Person to receive such payment.
Section 13.9 Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets of the Issuer referred to in
- -----
this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of Securities shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such Proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Indebtedness and
other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article.
Section 13.10 Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee, in its capacity as trustee under this Indenture, shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and shall
not be liable to any such holders if it shall in good faith mistakenly pay over
or distribute to Holders of Securities or to the Issuer or to any other Person
cash, property or securities to which any holders of Senior Indebtedness shall
be entitled by virtue of this Article or otherwise.
Section 13.11 Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
- --------------------------------
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness that may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness, and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
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Section 13.12 Article Applicable to Paying Agents. If at any time any
-----------------------------------
Paying Agent other than the Trustee shall have been appointed by the Issuer and
be then acting hereunder, the term "Trustee" as used in this Article shall in
such case (unless the context otherwise requires) be construed as extending to
and including such Paying Agent within its meaning as fully for all intents and
purposes as if such Paying Agent were named in this Article in addition to or in
place of the Trustee.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed and attested as of the date first written above.
TORCHMARK CORPORATION
By:__________________________________________
Name:
Title:
Attest:
By:____________________________
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By:__________________________________________
Name:
Title:
Attest:
By:____________________________
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Exhibit 4.9
FORM
OF
PREFERRED SECURITIES GUARANTEE AGREEMENT
TORCHMARK CAPITAL TRUST /(1)/
DATED AS OF __________________, _____
(1) Insert I or II, as applicable.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C>
Section 1.1 Definitions and Interpretation.............................. 1
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application............................ 5
Section 2.2 Lists of Holders............................................ 5
Section 2.3 Reports by The Preferred Guarantee Trustee.................. 5
Section 2.4 Periodic Reports to Preferred Guarantee Trustee............. 5
Section 2.5 Evidence of Compliance With Conditions Precedent............ 6
Section 2.6 Events of Default; Waiver................................... 6
Section 2.7 Event of Default; Notice.................................... 6
Section 2.8 Conflicting Interests....................................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers And Duties of The Preferred Guarantee Trustee........ 7
Section 3.2 Certain Rights of Preferred Guarantee Trustee............... 9
Section 3.3 Not Responsible For Recitals or Issuance of
Preferred Securities Guarantee......................... 11
ARTICLE IV
PREFERRED GUARANTEE TRUSTEE
Section 4.1 Preferred Guarantee Trustee: Eligibility.................... 11
Section 4.2 Appointment, Removal And Resignation of Preferred
Guarantee Trustee...................................... 12
ARTICLE V
GUARANTEE
Section 5.1 Guarantee................................................... 13
Section 5.2 Waiver of Notice and Demand................................. 13
Section 5.3 Obligations Not Affected.................................... 13
Section 5.4 Rights of Holders........................................... 14
Section 5.5 Guarantee of Payment........................................ 14
Section 5.6 Subrogation................................................. 15
Section 5.7 Action Against Guarantor.................................... 15
</TABLE>
i
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<TABLE>
<S> <C>
Section 5.8 Independent Obligations..................................... 15
Section 5.9 Taxes....................................................... 15
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions.................................. 16
Section 6.2 Subordination............................................... 16
ARTICLE VII
TERMINATION
Section 7.1 Termination................................................. 17
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Exculpation................................................. 17
Section 8.2 Indemnification............................................. 17
ARTICLE IX
MISCELLANEOUS
Section 9.1 Successors and Assigns...................................... 18
Section 9.2 Amendments.................................................. 18
Section 9.3 Notices..................................................... 18
Section 9.4 Benefit..................................................... 19
Section 9.5 Governing Law............................................... 19
</TABLE>
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities Guarantee"), dated as
of _______________________, 1999, is executed and delivered by Torchmark
Corporation, a Delaware 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 Torchmark Capital Trust/(2)/, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"Declaration"), dated as of ______________________, 1999, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof up to [ ] preferred securities (the
"Preferred Securities"), having a liquidation amount of $[ ] per
Preferred Security designated the [ ] Preferred Securities.
WHEREAS, as incentive for the Holders to purchase the Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Preferred Securities Guarantee, to pay to the Holders of the
Preferred Securities the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein.
WHEREAS, as of the date hereof, the Guarantor is also executing and
delivering a guarantee agreement (the "Common Securities Guarantee") in
substantially identical terms to this Preferred Securities Guarantee for the
benefit of the holders of the Common Securities (as defined herein), except that
if an Event of Default (as defined in the Indenture) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.
(2) Insert I or II, as applicable.
1
<PAGE>
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1 Definitions and Interpretation. In this Preferred
------------------------------
Securities Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Preferred Securities Guarantee
but not defined in the preamble above have the respective meanings assigned to
them in this Section 1.1;
(b) terms defined in the Declaration as at the date of execution
of this Preferred Securities Guarantee have the same meaning when used in this
Preferred Securities Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
(c) a term defined anywhere in this Preferred Securities Guarantee
has the same meaning throughout;
(d) all references to "the Preferred Securities Guarantee" or
"this Preferred Securities Guarantee" are to this Preferred Securities Guarantee
as modified, supplemented or amended from time to time;
(e) all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee, unless otherwise specified; 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.
"AUTHORIZED OFFICER" of a Person means any Person that is authorized to
legally bind such Person; provided, however, that the Authorized Officer signing
-------- -------
an Officers' Certificate given pursuant to Section 314(a)(4) of the Trust
Indenture Act shall be the principal executive, financial or accounting officer
of such Person.
"COMMON SECURITIES" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"COMMON SECURITIES GUARANTEE" has the meaning assigned thereto in the
recitals hereto.
"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,
2
<PAGE>
be principally administered, which office at the date of execution of this
Agreement is located at, The First National Bank of Chicago, One First National
Plaza, Suite 0126 Chicago, IL 60670-0126 Attention: Corporate Trust Services
Division
"COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.
"DECLARATION" has the meaning assigned thereto in the recitals hereto.
"EVENT OF DEFAULT" means (a) a failure by the Guarantor to perform any of
its payment or other obligations under this Preferred Securities Guarantee or
(b) if applicable, the failure by the Guarantor to deliver the designated
securities upon an appropriate election by a Holder of Preferred Securities to
convert or exchange the Preferred Securities into such designated security.
"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 accumulated 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 (the "Redemption Price"), and all accumulated and unpaid Distributions to
the date of redemption, 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 redemption of all of the
Preferred Securities or the distribution of the Debt Securities to the Holders
in exchange for Preferred Securities as provided in the Declaration), the lesser
of (a) the aggregate of the liquidation amount and all accumulated 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 of Preferred
Securities then outstanding upon the 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 Agreement
are subordinated to the rights of Holders of Preferred Securities to receive
Guarantee Payments.
"GUARANTOR" has the meaning assigned thereto in the recitals hereto.
"HOLDER" shall mean any holder, as registered on the books and records of
the Issuer, of any Preferred Securities; provided, however, that, in determining
-------- -------
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.
"INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any Affiliate
of the Preferred Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Preferred Guarantee Trustee.
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"INDENTURE" means the Indenture dated as of ______________, ____ between
the Guarantor and The First National Bank of Chicago, as trustee, or, if amended
or supplemented as provided herein, as so amended or supplemented or both, and
shall include the forms and terms of a particular series of securities
established as contemplated thereunder.
"ISSUER" has the meaning assigned thereto in the recitals hereto.
"LIST OF HOLDERS" shall have the meaning set forth in Section 2.2.
"MAJORITY IN LIQUIDATION AMOUNT OF THE PREFERRED SECURITIES" means, except
as provided in the terms of the Preferred Securities, or except as provided by
the Trust Indenture Act, a vote by Holder(s), voting separately as a class, of
more than 50% of the liquidation amount (including the stated amount that would
be paid on redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are determined) of
all Preferred Securities.
"PERSON" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
"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.
"PREFERRED SECURITIES" has the meaning assigned thereto in the recitals
hereto.
"PREFERRED SECURITIES GUARANTEE" has the meaning assigned thereto in the
recitals hereto.
"RELEVANT JURISDICTION" means the United States and, during any period any
Intercompany Security other than the Initial Intercompany Security is
outstanding, the jurisdiction of residence of any obligor on any such
Intercompany Security.
"RELEVANT TAX" means any present or future taxes, duties, assessments or
governmental charges of whatever nature, imposed or levied by or on behalf of
any Relevant Jurisdiction or any authority therein or thereof having the power
to tax.
"RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, any officer within the Corporate Trust Office of the Preferred
Guarantee Trustee, including any vice president, any assistant vice president,
any assistant secretary, the treasurer, any assistant treasurer or other officer
of the Corporate Trust Office of the Preferred Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers, and also
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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 SECURITIES" means the Common Securities and the Preferred
Securities.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
--------------------------------
(a) Upon its public offering pursuant to the registration
requirements of the Securities Act, this Preferred Securities Guarantee will be
subject to the provisions of the Trust Indenture Act that will be required to be
part of this Preferred Securities Guarantee and shall, to the extent applicable,
be governed by such provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
Section 2.2 Lists of Holders.
----------------
(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 ("List of Holders") (i)
within 14 days after each record date for payment of Distributions, as of such
record date, and (ii) at any other time, within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee,
provided that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by the Guarantor. The
Preferred Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by The Preferred Guarantee Trustee. Within 60 days
------------------------------------------
after May 15 of each year, the Preferred Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided
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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 (if any) as are required by Section 314 and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, the manner and at the times required by Section 314 of the Trust Indenture
Act.
Delivery of such reports, information and documents to the Preferred
Guarantee Trustee is for informational purposes only and the Preferred Guarantee
Trustee's receipt of such shall not constitute constructive notice of any
information contained therein, including the Guarantor's compliance with any of
its covenants hereunder (as to which the Preferred Guarantee Trustee is entitled
to rely exclusively on Officers' Certificates).
Section 2.5 Evidence of Compliance with Conditions Precedent. The
------------------------------------------------
Guarantor shall provide to the Preferred Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Preferred
Securities Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
Section 2.6 Events of Default; Waiver. The Holders of a Majority in
-------------------------
liquidation amount of Preferred Securities may, by vote, on behalf of the
Holders of all of the Preferred Securities, waive any past Event of Default and
its consequences except an Event of Default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of each
Holder of Preferred Securities. 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 actually known to a Responsible Officer of
the Preferred Guarantee Trustee, transmit by mail, first class postage prepaid,
to the Holders of the Preferred Securities, notices of all such Events of
Default unless such defaults have been cured before the giving of such notice,
provided that the Preferred Guarantee Trustee shall be protected in withholding
such notice if and so long as a Responsible Officer of the Preferred Guarantee
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or a Responsible Officer of the Preferred
Guarantee Trustee charged with the administration of this Preferred Securities
Guarantee shall have obtained actual knowledge, of such Event of Default..
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Section 2.8 Conflicting Interests. The Declaration shall be deemed to
---------------------
be specifically described in this Preferred Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section 310(b) of the
Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
Section 3.1 Powers and Duties of the Preferred Guarantee Trustee.
----------------------------------------------------
(a) This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders and the Preferred
Guarantee Trustee shall not transfer this Preferred Securities Guarantee to any
Person except a Holder exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Preferred Guarantee Trustee on acceptance by such Successor
Preferred Guarantee Trustee of its appointment to act as Successor Preferred
Guarantee Trustee. The right, title and interest of the Preferred Guarantee
Trustee shall automatically vest in any Successor Preferred Guarantee Trustee,
and such vesting and succession 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.
(c) The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing or waiver 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 shall use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of
Default that may have occurred:
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(A) the duties and obligations of the Preferred Guarantee
Trustee shall be determined solely by the express
provisions of this Preferred Securities Guarantee, and
the Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants
or obligations shall be read into this Preferred
Securities Guarantee against the Preferred Guarantee
Trustee; and
(B) in the absence of bad faith on the part of the Preferred
Guarantee Trustee, the Preferred Guarantee Trustee may
conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed 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
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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 re-registration thereof).
(v) The Preferred Guarantee Trustee may at the expense of the
Guarantor consult with counsel of its selection, and the
advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any
of its employees. The Preferred Guarantee Trustee shall
have the right at any time to seek instructions concerning
the administration of this Preferred Securities Guarantee
from any court of competent jurisdiction.
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(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
but shall incur no liability of any kind by reason of such
inquiry or investigation.
(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.
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(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 written instructions are received and (iii)
shall be protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Preferred Securities Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it
in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Preferred Securities Guarantee.
(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 Preferred
-----------------------------------------------------
Securities 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 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
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Securities and Exchange Commission to act as an
institutional trustee under the Trust Indenture Act,
authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by federal, state, territorial
or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant
to law or to the requirements of the supervising or
examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital
and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Preferred Guarantee Trustee shall cease to
be eligible to so act under Section 4.1(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.2(c).
(c) If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
Section 4.2 Appointment, Removal and Resignation of Preferred Guarantee
-----------------------------------------------------------
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 except during
an Event of Default.
(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 of an instrument of resignation or removal, the Preferred
Guarantee Trustee resigning or being removed may petition,
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at the expense of the Guarantor, 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 to which it is entitled 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. The Guarantor will honor
all obligations, if any, relating to the conversion or exchange of the Preferred
Securities into the designated security as set forth in the Declaration and the
Indenture.
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 or
remedy to require a proceeding first against the Issuer or any other Person
before proceeding directly against the Guarantor, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
Section 5.3 Obligations Not Affected. The obligations, covenants,
------------------------
agreements and duties of the Guarantor under this Preferred Securities Guarantee
shall in no way be affected or impaired by reason of the happening from time to
time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or
any portion of the Distributions, Redemption Price, Liquidation Distribution or
any other sums payable under the terms of the Preferred Securities or the
extension of time for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than an extension of
time for
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payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debt Securities);
(c) any failure, omission, delay or lack of diligence on the part
of the Holders to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain consent
of, the Guarantor with respect to the happening of any of the foregoing.
Section 5.4 Rights of Holders.
-----------------
(a) The Holders of a Majority in Liquidation Amount of the
Preferred Securities then outstanding have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Preferred
Guarantee Trustee in respect of this Preferred Securities Guarantee or to direct
the exercise of 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, any Holder of Preferred Securities may institute
a legal proceeding directly against the Guarantor to enforce the Preferred
Guarantee Trustee's rights under this Preferred Securities Guarantee, without
first instituting a legal proceeding against the Issuer, the Preferred Guarantee
Trustee or any other person or entity. The Guarantor waives any right or remedy
to require that any action be brought first against the Issuer or any other
person or entity before proceeding directly against the Guarantor.
Notwithstanding the foregoing, if the Guarantor has failed to make a guarantee
payment, a Holder of Preferred Securities may directly institute a proceeding
against the Guarantor for enforcement of this Preferred Securities Guarantee for
such payment.
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Section 5.5 Guarantee of Payment. This Preferred Securities Guarantee
--------------------
creates a guarantee of payment and not of collection.
Section 5.6 Subrogation. The Guarantor shall be subrogated to all (if any)
-----------
rights of the Holders of Preferred Securities against the Issuer in respect of
any amounts paid to such Holders by the Guarantor under this Preferred
Securities Guarantee; provided, however, that the Guarantor shall not (except to
-------- -------
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any right that it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement, in all cases as a result of payment under this
Preferred Securities Guarantee, if, at the time of any such payment, any amounts
are due and unpaid under this Preferred Securities Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
Section 5.7 Action Against Guarantor. The Guarantor waives any right or
------------------------
remedy to require that any action be brought first against the Issuer or any
other person or entity before proceeding directly against the Guarantor.
Section 5.8 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.
Section 5.9 Taxes. All payments in respect of the Guarantee Payments
-----
(including interest accrued thereon, if any) by the Guarantor shall be made
without withholding or deduction for or on account of any Relevant Tax, unless
the withholding or deduction of such Relevant Tax is required by law. In that
event, the Guarantor shall pay, as further Guarantee Payments, such additional
amounts as may be necessary in order that the net amounts received by a Holder
(or a third party on its behalf) after such withholding or deduction will equal
the amount which would have been received in respect of the Guarantee Payments
(including interest accrued thereon, if any) in the absence of such withholding
or deduction ("Guarantee Additional Amounts"), except that no such Guarantee
Additional Amounts shall be payable to a Holder (or a third party on its behalf)
with respect to any Guarantee Payments (including interest accrued thereon, if
any (i) to the extent that such Relevant Tax is imposed or levied by virtue of
such Holder (or the beneficial owner of Preferred Securities to which such
Guarantee Payments relate) having some connection with the Relevant
Jurisdiction, other than being a Holder (or beneficial owner Preferred
Securities) or (ii) to the extent that such the Relevant Tax is imposed or
levied by virtue of such Holder (or beneficial owner) not having made a
declaration of non-residence in, or other lack of connection with, the Relevant
Jurisdiction of any similar claim for exemption, if the Guarantor or its agent
has provided the beneficial owner of such Preferred Securities or its nominee
with at least 60 days' prior written notice of any opportunity to make such a
declaration or claim.
ARTICLE VI
15
<PAGE>
LIMITATION OF TRANSACTIONS; SUBORDINATION
Section 6.1 Limitation of Transactions. So long as any Preferred Securities
--------------------------
remain outstanding, if (i) the Guarantor has exercised its option to defer
interest payments on the Debt Securities by extending the interest payment
period and such extension period, or any extension thereof, shall be continuing,
(ii) the Guarantor shall be in default with respect to its payment or other
obligations under this Preferred Securities Guarantee or (iii) there shall have
occurred and be continuing an Event of Default under the Declaration or any
event that, with the giving of notice or lapse of time or both, would constitute
an Event of Default under the Declaration, then the Guarantor shall not (a)
declare or pay any dividend on, make any distributions with respect to, or
redeem, purchase, acquire, or make any liquidation payment with respect to, any
of its capital stock or (b) make any payment of interest, principal or premium,
if any, on or repay, repurchase or redeem any debt securities of the Guarantor
that rank PARI PASSU with or junior in interest to the Debt Securities or make
any guarantee payment with respect to any guarantee by the Guarantor of the debt
securities of any subsidiary of the Guarantor if such guarantee ranks PARI PASSU
with or junior in interest to the Debt Securities (other than (i) as a result of
a reclassification of the capital stock of the Guarantor or the exchange or
conversion of one class or series of the capital stock of the Guarantor for
another class or series of the capital stock of the Guarantor, (ii) the purchase
of fractional interests in shares of the capital stock of the Guarantor pursuant
to the conversion or exchange provisions of such capital stock or the security
being converted into or exchanged for such capital stock, (iii) dividends or
distributions in common stock of the Guarantor, (iv) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (v) payments under the Guarantee
and Common Securities Guarantee, (vi) purchases of common stock of the Guarantor
related to the issuance of common stock of the Guarantor or rights under any of
the Guarantor's benefit plans for its directors, officers or employees and (vii)
obligations under any dividend reinvestment and stock purchase plans).
Section 6.2 Subordination. 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 (except any liabilities that may be PARI PASSU expressly by their
terms), (ii) PARI PASSU with the most senior preferred or preference stock now
or hereafter issued by the Guarantor and with any guaranty 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 as to each Holder upon, and be of no force and effect from the earlier
of (i) full payment of the Redemption
16
<PAGE>
Price and accumulated and unpaid distributions with respect to all Preferred
Securities, (ii) the distribution of the underlying securities to such Holder
upon the conversion or exchange of such Holder's Preferred Securities into the
designated security, (iii) the distribution of the Debt Securities to the
Holders of the Preferred Securities or (iv) full payment of the amounts payable
in accordance with the Declaration upon liquidation of the Issuer. This
Preferred Securities Guarantee shall terminate completely upon full payment of
the amounts payable in accordance with the Declaration. 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 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, liability, expense 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 provisions of this
Section 8.2 shall survive the termination of this Preferred Securities Guarantee
or the resignation or removal of the Preferred Guarantee Trustee.
17
<PAGE>
When the Preferred Guarantee Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(d) or Section
5.1(e) of the Indenture, the expenses (including the reasonable charges and
expenses of its counsel) and the compensation for services are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or other similar law.
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. Except in
connection with any merger or consolidation of the Guarantor with or into
another entity permitted by Section 9.1 of the Indenture or any sale, transfer
or lease of the Guarantor's assets to another entity permitted by Section 9.1 of
the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Preferred Securities Guarantee without the prior approval
of the holders of at least a Majority in Liquidation Amount of the Preferred
Securities then outstanding.
Section 9.2 Amendments. Except with respect to any changes that do not
----------
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accumulated and unpaid Distributions to the date upon which the
voting percentages are determined) of the Preferred Securities then outstanding.
The provisions of the Declaration with respect to meetings of Holders apply to
the giving of such approval.
Section 9.3 Notices. All notices provided for in this Preferred Securities
-------
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, IL 60670-0126
Attention: Corporate Trust Services Division
18
<PAGE>
(b) If given to the Guarantor, at the Guarantor's mailing address
set forth below (or such other address as the Guarantor may give notice of to
the Holders of the Preferred Securities):
Torchmark Corporation
2001 Third Avenue South
Birmingham, Alabama 35233
Attention: General Counsel
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or mailed by first class mail, postage
prepaid, except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
Section 9.4 Benefit. This Preferred Securities Guarantee is solely for the
-------
benefit of the Holders of the Preferred Securities and, subject to Section
3.1(a), is not separately transferable from the Preferred Securities.
Section 9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK
AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
19
<PAGE>
THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.
TORCHMARK CORPORATION,
as Guarantor
By:____________________________________
Name:_____________________________
Title:____________________________
THE FIRST NATIONAL BANK OF CHICAGO,
As Preferred Guarantee Trustee
By:____________________________________
Name:_____________________________
Title:____________________________
20
<PAGE>
Exhibit 4.10
TORCHMARK CORPORATION
and
_________________________________,
As Depositary
and
HOLDERS OF DEPOSITARY RECEIPTS
DEPOSIT AGREEMENT
Dated as of ____________ ___, ___
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I
DEFINITIONS................................. 1
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION OF RECEIPTS..................... 3
Section 2.01. Form and Transfer of Receipts................................... 3
Section 2.02. Temporary Receipts.............................................. 3
Section 2.03. Deposit of Stock; Execution and Delivery of Receipts
In Respect Thereof.............................................. 4
Section 2.04. Redemption and Conversion of Stock.............................. 4
Section 2.05. Register of Transfer of Receipts................................ 7
Section 2.06. Combination and Split-ups of Receipts........................... 7
Section 2.07. Surrender of Receipts and Withdrawal of Stock................... 7
Section 2.08. Limitations on Execution and Delivery, Transfer, Split-up,
Combination, Surrender and Exchange of Receipts And
Withdrawal or Deposit of Stock.................................. 8
Section 2.09. Lost Receipts, Etc.............................................. 9
Section 2.10. Cancellation and Destruction of Surrendered Receipts............ 9
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY......................... 9
Section 3.01. Filing Proofs, Certificates and Other Information............... 9
Section 3.02. Payment of Taxes or Other Governmental Charges.................. 9
Section 3.03. Withholding..................................................... 10
Section 3.04. Representations and Warranties as to Stock...................... 10
ARTICLE IV
THE STOCK, NOTICES.............................. 10
Section 4.01. Cash Distributions.............................................. 10
Section 4.02. Distributions Other than Cash................................... 10
Section 4.03. Subscription Rights, Preferences or Privileges.................. 11
Section 4.04. Notice of Dividends, Fixing of Record Date for
Holders of Receipts............................................. 12
Section 4.05. Voting Rights................................................... 12
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 4.06. Changes Affecting Stock and Reclassifications,
Recapitalizations, Etc............................................ 12
Section 4.07. Reports........................................................... 13
Section 4.08. Lists of Receipt Holders.......................................... 13
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY........................... 13
Section 5.01. Maintenance of Offices, Agencies, Transfer Books by
The Depositary; the Registrar..................................... 13
Section 5.02. Prevention or Delay in Performance by the Depositary,
The Depositary's Agents, the Registrar or the Company............. 14
Section 5.03. Obligations of the Depositary, the Depositary's Agents,
The Registrar and the Company..................................... 14
Section 5.04. Resignation and Removal of the Depositary, Appointment of
Successor Depositary.............................................. 16
Section 5.05. Corporate Notices and Reports..................................... 16
Section 5.06. Deposit of Stock by the Company................................... 17
Section 5.07. Indemnification by the Company.................................... 17
Section 5.08. Fees, Charges and Expenses........................................ 17
ARTICLE VI
AMENDMENT AND TERMINATION............................. 17
Section 6.01. Amendment......................................................... 17
Section 6.02. Termination....................................................... 18
ARTICLE VII
MISCELLANEOUS.................................... 19
Section 7.01. Counterparts...................................................... 19
Section 7.02. Exclusive Benefits of Parties..................................... 19
Section 7.03. Invalidity of Provisions.......................................... 19
Section 7.04. Notices........................................................... 19
Section 7.05. Depositary's Agents............................................... 20
Section 7.06. Holders of Receipts Are Parties................................... 20
Section 7.07. Governing Law..................................................... 20
Section 7.08. Headings.......................................................... 20
EXHIBIT A....................................................................... A-1
Parties......................................................................... 1
Recitals........................................................................ 1
</TABLE>
ii
<PAGE>
DEPOSIT AGREEMENT
This DEPOSIT AGREEMENT is dated as of ________ ___, ____, by and among
Torchmark Corporation, a Delaware corporation, ___________________________, a
________ banking corporation, as Depositary, and all holders from time to time
of Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide as hereinafter set forth in this
Deposit Agreement, for the deposit of shares of Stock with the Depositary, as
agent for the beneficial owners of the Stock, for the purposes set forth in this
Deposit Agreement and for the issuance hereunder of the Receipts evidencing
Depositary Shares representing an interest in the Stock so deposited; and
WHEREAS, the Receipts are to be substantially in the form annexed as
Exhibit A to this Deposit Agreement, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises contained herein, it is
agreed by and among the parties hereto as follows:
ARTICLE I
DEFINITIONS
The following definitions shall apply to the respective terms (in the
singular and plural forms of such terms) used in this Deposit Agreement and the
Receipts:
"Certificate of Determination" shall mean the Certificate of Determination
establishing and setting forth the rights, preferences, privileges and
limitations of the Stock.
"Certificate of Incorporation" shall mean the Certificate of Incorporation,
as amended and restated from time to time, of the Company.
"Common Stock" shall mean the Company's common stock.
"Company" shall mean Torchmark Corporation, a Delaware corporation, and its
successors.
"Corporate Office" shall mean the office of the Depositary in __________,
______________ at which at any particular time its business in respect of
matters governed by this Deposit Agreement shall be administered, which at the
date of this Deposit Agreement is located at ______________________.
1
<PAGE>
"Deposit Agreement" shall mean this agreement, as the same may be amended,
modified or supplemented from time to time.
"Depositary" shall mean _________________________________, as Depositary
hereunder, and any successor as Depositary hereunder.
"Depositary Share" shall mean the rights evidenced by the Receipts executed
and delivered hereunder, including the interests in Stock granted to holders of
Receipts pursuant to the terms and conditions of the Deposit Agreement. Each
Depositary Share shall represent an interest in __________ of a share of Stock
deposited with the Depositary hereunder and the same proportionate interest in
any and all other property received by the Depositary in respect of such share
of Stock and held under this Deposit Agreement. Subject to the terms of this
Deposit Agreement, each record holder of a Receipt evidencing a Depositary Share
or Shares is entitled, proportionately, to all the rights, preferences and
privileges of the Stock represented by such Depositary Share or Shares,
including the dividend, voting and liquidation rights contained in the
Certificate of Determination, and to the benefits of all obligations and duties
of the Company in respect of the Stock under the Certificate of Determination
and the Certificate of Incorporation.
"Depositary's Agent" shall mean an agent appointed by the Depositary as
provided, and for the purposes specified, in Section 7.05.
"New York Office" shall mean the facility maintained by the Depositary in
the Borough of Manhattan, The City of New York, for accepting, executing and
delivering Receipts and other instruments prior to processing such instruments
at the Corporate Office, which facility at the date of this Deposit Agreement is
located at ______________________.
"Receipt" shall mean a Depositary Receipt executed and delivered hereunder,
in substantially the form of Exhibit A hereto, evidencing a Depositary Share or
Depositary Shares, as the same may be amended from time to time in accordance
with the provisions hereof.
"Record Holder" or "Holder" as applied to a Receipt shall mean the person
in whose name a Receipt is registered on the books maintained by or on behalf of
the Depositary for such purpose.
"Registrar" shall mean any bank or trust company appointed to register
ownership and transfers of Receipts as herein provided.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Stock" shall mean shares of the Company's ___________ Series Preferred
Stock.
2
<PAGE>
ARTICLE II
FORM OF RECEIPTS, DEPOSIT OF STOCK,
EXECUTION AND DELIVERY, TRANSFER, SURRENDER,
REDEMPTION AND CONVERSION OF RECEIPTS
Section 2.01. Form and Transfer of Receipts. Receipts shall be engraved
-----------------------------
or printed or lithographed on steel-engraved borders and shall be substantially
in the form set forth in Exhibit A annexed to this Deposit Agreement, with
appropriate insertions, modifications and omissions, as hereinafter provided.
Receipts shall be executed by the Depositary by the manual signature of a duly
authorized signatory of the Depositary; provided, however, that such signature
may be a facsimile if a Registrar (other than the Depositary) shall have
countersigned the Receipts by manual signature of a duly authorized signatory of
the Registrar. No Receipt shall be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose unless it shall have been
executed as provided in the preceding sentence. The Depositary shall record on
its books each Receipt executed as provided above and delivered as hereinafter
provided. Receipts bearing the facsimile signature of anyone who was at any time
a duly authorized officer of the Depositary shall bind the Depositary,
notwithstanding that such officer has ceased to hold such office prior to the
delivery of such Receipts.
Receipts may be issued in denominations of any number of whole Depositary
Shares. All Receipts shall be dated the date of their execution.
Receipts may be endorsed with or have incorporated in the text thereof such
legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required by the Depositary or required to comply
with any applicable law or regulation or with the rules and regulations of any
securities exchange upon which the Stock or the Depositary Shares may be listed
or to conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Receipts are subject by
reason of the date of issuance of the Stock or otherwise.
Title to any Receipt (and to the Depositary Shares evidenced by such
Receipt) that is properly endorsed or accompanied by a properly executed
instrument of transfer shall be transferable by delivery with the same effect as
in the case of a negotiable instrument; provided, however, that the Depositary
may, notwithstanding any notice to the contrary, treat the record holder thereof
at such time as the absolute owner thereof for the purpose of determining the
person entitled to distributions of dividends or other distributions or to any
notice provided for in this Deposit Agreement and for all other purposes.
Section 2.02. Temporary Receipts. Pending the preparation of definitive
------------------
Receipts, the Depositary may, upon written order of the Company, issue temporary
Receipts substantially identical to (and entitling the holders thereof to all
the rights pertaining to) the definitive Receipts but not in definitive form.
Definitive Receipts will be prepared thereafter without unreasonable delay, and
such temporary Receipts will be exchangeable for definitive Receipts at the
Company's expense.
3
<PAGE>
Section 2.03. Deposit of Stock; Execution and Delivery of Receipts in
-------------------------------------------------------
Respect Thereof. Subject to the terms and conditions of this Deposit Agreement,
- ---------------
the Company or any holder of Stock may deposit such Stock under this Deposit
Agreement by delivery to the Depositary of a certificate or certificates for the
Stock to be deposited, properly endorsed or accompanied, if required by the
Depositary, by a properly executed instrument of transfer in form satisfactory
to the Depositary, together with (a) all such certifications as may be required
by the Depositary in accordance with the provisions of this Deposit Agreement
and (b) a written order of the Company or such holder, as the case may be,
directing the Depositary to execute and deliver to or upon the written order of
the person or persons stated in such order a Receipt or Receipts for the number
of Depositary Shares representing such deposited Stock.
Upon receipt by the Depositary of a certificate or certificates for Stock
to be deposited hereunder, together with the other documents specified above,
the Depositary shall, as soon as transfer and registration can be accomplished,
present such certificate or certificates to the registrar and transfer agent of
the Stock for transfer and registration in the name of the Depositary or its
nominee of the Stock being deposited. Deposited Stock shall be held by the
Depositary in an account to be established by the Depositary at the Corporate
Office.
Upon receipt by the Depositary of a certificate or certificates for Stock
to be deposited hereunder, together with the other documents specified above,
the Depositary, subject to the terms and conditions of this Deposit Agreement,
shall execute and deliver, to or upon the order of the person or persons named
in the written order delivered to the Depositary referred to in the first
paragraph of this Section 2.03, a Receipt or Receipts for the number of whole
Depositary Shares representing the Stock so deposited and registered in such
name or names as may be requested by such person or persons. The Depositary
shall execute and deliver such Receipt or Receipts at the New York Office,
except that, at the request, risk and expense of any person requesting such
delivery and for the account of such person, such delivery may be made at such
other place as may be designated by such person. In each case, delivery will be
made only upon payment by such person to the Depositary of all taxes and other
governmental charges and any fees payable in connection with such deposit and
the transfer of the deposited Stock.
The Company shall deliver to the Depositary from time to time such
quantities of Receipts as the Depositary may request to enable the Depositary to
perform its obligations under this Deposit Agreement.
Section 2.04. Redemption and Conversion of Stock./1/ Whenever the Company
----------------------------------
shall elect to redeem or be required to convert shares of Stock into shares of
Common Stock in accordance with the Certificate of Determination, it shall
(unless otherwise agreed in writing with the Depositary) give the Depositary in
its capacity as Depositary not less than 5 business days' prior notice of the
proposed date of the mailing of a notice of redemption or conversion of Stock
and the simultaneous redemption or conversion of the Depositary Shares
representing the Stock to be redeemed or converted and of
____________________
/1/ This section to be modified to discuss specific redemption or
conversion terms of the Stock, if any,
4
<PAGE>
the number of such shares of Stock held by the Depositary to be redeemed or
converted. The Depositary shall, as directed by the Company in writing, mail,
first class postage prepaid, notice of the redemption or conversion of Stock and
the proposed simultaneous redemption or conversion of the Depositary Shares
representing the Stock to be redeemed or converted, not less than 30 days and
not more than 60 days prior to the date fixed for redemption or conversion of
such Stock and Depositary Shares, to the record holders of the Receipts
evidencing the Depositary Shares to be so redeemed or converted, at the
addresses of such holders as the same appear on the records of the Depositary;
provided, that if the effectiveness of a Merger or Consolidation (as defined in
the Certificate of Determination) makes it impracticable to provide at least 30
days' notice, the Depositary shall provide such notice as soon as practicable
prior to such effectiveness. Any such notice shall also be published in the same
manner as notices of redemption or conversion of Stock are required to be
published pursuant to the Certificate of Determination. Notwithstanding the
foregoing, neither failure to mail or publish any such notice to one or more
such holders nor any defect in any notice shall affect the sufficiency of the
proceedings for redemption or conversion. The Company shall provide the
Depositary with such notice, and each such notice shall state: the redemption or
conversion date; the number of Depositary Shares to be redeemed or converted; if
fewer than all the Depositary Shares held by any holder are to be redeemed, the
number of such Depositary Shares held by such holder to be so redeemed; in the
case of a call for redemption, the call price payable upon redemption and the
Current Market Price (as defined in the Certificate of Determination) to be used
to calculate the number of shares of Common Stock deliverable upon redemption;
whether the Company is exercising any option to deliver shares of Common Stock
in lieu of any cash consideration pursuant to the Certificate of Determination
and the Current Market Price to be used to calculate the number of such shares;
the place or places where Receipts evidencing Depositary Shares to be redeemed
or converted are to be surrendered for redemption or conversion; whether the
Company is depositing with a bank or trust company on or before the redemption
or conversion date, the shares of Common Stock and cash, if any, payable by the
Company and the proposed date of such deposit; the amount of accrued and unpaid
dividends payable per share of Stock to be redeemed or converted to and
including such redemption or conversion date, as the case may be, and that
dividends in respect of the Stock represented by the Depositary Shares to be
redeemed or converted will cease to accrue on such redemption or conversion date
(unless the Company shall default in delivering shares of Common Stock and cash,
if any, at the time and place specified in such notice). On the date of any such
redemption or conversion, the Depositary shall surrender the certificate or
certificates held by the Depositary evidencing the number of shares of Stock to
be redeemed or converted in the manner specified in the notice of redemption or
conversion of Stock provided by the Company pursuant to the Certificate of
Determination. The Depositary shall, thereafter, redeem or convert the number of
Depositary Shares representing such redeemed or converted Stock upon the
surrender of Receipts evidencing such Depositary Shares in the manner provided
in the notice sent to record holders of Receipts; provided, that the Depositary
shall have received, upon surrendering such certificate or certificates as
aforesaid, a sufficient number of shares of Common Stock to convert or redeem
such number of Depositary Shares (including, in the event that the Company
elects pursuant to the Certificate of Determination to exercise any option to
deliver shares of Common Stock in lieu of any cash consideration payable on the
Effective Date (as defined in the Certificate of Determination) of any Merger or
Consolidation, a number of shares of Common Stock equal to such cash
consideration
5
<PAGE>
(as determined in the manner set forth in the Certificate of Determination)),
plus any accrued and unpaid dividends payable with respect thereto to and
including the date of any such redemption or conversion and any other cash
consideration payable on the Effective Date of a Merger or Consolidation (other
than any dividends or other cash consideration payable on the Effective Date of
a Merger or Consolidation that the Company has elected to pay in shares of
Common Stock pursuant to the Certificate of Determination) as instructed and
calculated by the Company. In case fewer than all the outstanding Depositary
Shares are to be redeemed, the Depositary Shares to be redeemed shall be
selected by the Depositary by lot or on a pro rata basis.
Notice having been mailed by the Depositary as aforesaid, from and after
the redemption or conversion date (unless the Company shall have failed to
redeem or convert the shares of Stock to be redeemed or converted by it upon the
surrender of the certificate or certificates therefor by the Depositary as
described in the preceding paragraph), the Depositary Shares called for
redemption or subject to conversion shall be deemed no longer to be outstanding
and all rights of the holders of Receipts evidencing such Depositary Shares
(except the right to receive the shares of Common Stock and cash, if any,
payable upon redemption or conversion upon surrender of such Receipts) shall, to
the extent of such Depositary Shares, cease and terminate. Upon surrender in
accordance with said notice of the Receipts evidencing such Depositary Shares
(properly endorsed or assigned for transfer, if the Depositary shall so
require), such Depositary Shares shall be converted into or redeemed for shares
of Common Stock at a rate equal to ______________ of the number of shares of
Common Stock delivered, and the holders thereof shall be entitled to
______________ of the cash, if any, payable, in respect of the shares of Stock
pursuant to the Certificate of Determination. The foregoing shall be subject
further to the terms and conditions of the Certificate of Determination.
If fewer than all of the Depositary Shares evidenced by a Receipt are
called for redemption, the Depositary will deliver to the holder of such Receipt
upon its surrender to the Depositary, together with the shares of Common Stock
and all accrued and unpaid dividends to and including the date fixed for
redemption payable in respect of the Depositary Shares called for redemption, a
new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and
not called for redemption.
To the extent that Depositary Shares are converted into or redeemed for
shares of Common Stock and all of such shares of Common Stock cannot be
distributed to the record holders of Receipts converted or called for redemption
without creating fractional interests in such shares, the Depositary may, with
the consent of the Company, adopt such method as it deems equitable and
practicable for the purpose of effecting such distribution, including the sale
(at public or private sale) of such shares of Common Stock at such place or
places and upon such terms as it may deem proper, and the net proceeds of any
such sale shall, subject to Section 3.02, be distributed or made available for
distribution to such record holders that would otherwise receive fractional
interests in such shares of Common Stock.
The Depositary shall not be required (a) to issue, transfer or exchange any
Receipts for a period beginning at the opening of business 15 days next
preceding any selection of Depositary Shares
6
<PAGE>
and Stock to be redeemed and ending at the close of business on the day of the
mailing of notice of redemption of Depositary Shares or (b) to transfer or
exchange for another Receipt any Receipt evidencing Depositary Shares called or
being called for redemption, in whole or in part, or subject to conversion
except as provided in the second preceding paragraph of this Section 2.04.
Any funds deposited by the Company with the Depositary for any Depositary
Shares that are not claimed after a period of two years from the date such funds
are so deposited will be returned to the Company.
Section 2.05. Register of Transfer of Receipts. Subject to the terms and
--------------------------------
conditions of this Deposit Agreement, the Depositary shall register on its books
from time to time transfers of Receipts upon any surrender thereof at the
Corporate Office, the New York Office or such other office as the Depositary may
designate for such purpose, by the record holder in person or by a duly
authorized attorney, properly endorsed or accompanied by a properly executed
instrument of transfer, together with evidence of the payment of any transfer
taxes as may be required by law. Upon such surrender, the Depositary shall
execute a new Receipt or Receipts and deliver the same to or upon the order of
the person entitled thereto evidencing the same aggregate number of Depositary
Shares evidenced by the Receipt or Receipts surrendered.
Section 2.06. Combination and Split-ups of Receipts. Upon surrender of a
-------------------------------------
Receipt or Receipts at the Corporate Office, the New York Office or such other
office as the Depositary may designate for the purpose of effecting a split-up
or combination of Receipts, subject to the terms and conditions of this Deposit
Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in
the authorized denominations requested evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not issue any Receipt evidencing a fractional
Depositary Share.
Section 2.07. Surrender of Receipts and Withdrawal of Stock./2/ Any
---------------------------------------------
holder of a Receipt or Receipts may withdraw any or all of the Stock (but only
in whole shares of Stock) represented by the Depositary Shares evidenced by such
Receipts and all money and other property, if any, represented by such
Depositary Shares by surrendering such Receipt or Receipts at the Corporate
Office, the New York Office or at such other office as the Depositary may
designate for such withdrawals. After such surrender, without unreasonable
delay, the Depositary shall deliver to such holder, or to the person or persons
designated by such holder as hereinafter provided, the whole number of shares of
Stock and all such money and other property, if any, represented by the
Depositary Shares evidenced by the Receipt or Receipts so surrendered for
withdrawal. If the Receipt or Receipts delivered by the holder to the Depositary
in connection with such withdrawal shall evidence a number of Depositary Shares
in excess of the number of whole Depositary Shares representing the whole number
of shares of Stock to be withdrawn, the Depositary shall at the same time, in
addition to such whole number of shares of Stock and such money and other
property, if any, to be withdrawn, deliver to such holder, or (subject to
Section 2.05) upon his order, a new Receipt
_______________
/2/ This section to be modified to reflect any restriction on withdrawal
of underlying securities.
7
<PAGE>
or Receipts evidencing such excess number of whole Depositary Shares. Delivery
of the Stock and such money and other property being withdrawn may be made by
the delivery of such certificates, documents of title and other instruments as
the Depositary may deem appropriate, which, if required by the Depositary, shall
be properly endorsed or accompanied by proper instruments of transfer.
If the Stock and the money and other property being withdrawn are to be
delivered to a person or persons other than the record holder of the Receipt or
Receipts being surrendered for withdrawal of Stock, such holder shall execute
and deliver to the Depositary a written order so directing the Depositary and
the Depositary may require that the Receipt or Receipts surrendered by such
holder for withdrawal of such shares of Stock be properly endorsed in blank or
accompanied by a properly executed instrument of transfer in blank and that the
signature on such instrument of transfer be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations and credit
unions with membership in an approved signature guarantee medallion program)
pursuant to Rule 17Ad-15 of the Securities Exchange Act of 1934, as amended.
The Depositary shall deliver the Stock and the money and other property, if
any, represented by the Depositary Shares evidenced by Receipts surrendered for
withdrawal, without unreasonable delay, at the office at which such Receipts
were surrendered, except that, at the request, risk and expense of the holder
surrendering such Receipt or Receipts and for the account of the holder thereof,
such delivery may be made, without unreasonable delay, at such other place as
may be designated by such holder.
Section 2.08. Limitations on Execution and Delivery, Transfer, Split-up,
----------------------------------------------------------
Combination, Surrender and Exchange of Receipts and Withdrawal or Deposit of
- ----------------------------------------------------------------------------
Stock. As a condition precedent to the execution and delivery, registration of
- -----
transfer, split-up, combination, surrender or exchange of any Receipt, the
delivery of any distribution thereon or the withdrawal or deposit of Stock, the
Depositary, any of the Depositary's Agents or the Company may require any or all
of the following: (a) payment to it of a sum sufficient for the payment (or, in
the event that the Depositary or the Company shall have made such payment, the
reimbursement to it) of any tax or other governmental charge with respect
thereto (including any such tax or charge with respect to the Stock being
deposited or withdrawn or with respect to the Common Stock or other securities
or property of the Company being issued upon conversion or redemption); (b)
production of proof satisfactory to it as to the identity and genuineness of any
signature; and (c) compliance with such reasonable regulations, if any, as the
Depositary or the Company may establish not inconsistent with the provisions of
this Deposit Agreement.
The deposit of Stock may be refused, the delivery of Receipts against Stock
or the registration of transfer, split-up, combination, surrender or exchange of
outstanding Receipts and the withdrawal of deposited Stock may be suspended (a)
during any period when the register of shareholders of the Company is closed,
(b) if any such action is deemed necessary or advisable by the Depositary, any
of the Depositary's Agents or the Company at any time or from time to time
because of any requirement of law or of any government or governmental body or
commission, or under any provision of this Deposit Agreement, or (c) with the
approval of the Company, for any other reason.
8
<PAGE>
Without limitation of the foregoing, the Depositary shall not knowingly accept
for deposit under this Deposit Agreement any shares of Stock that are required
to be registered under the Securities Act unless a registration statement under
the Securities Act is in effect as to such shares of Stock.
Section 2.09. Lost Receipts, Etc. In case any Receipt shall be mutilated
------------------
or destroyed or lost or stolen, the Depositary shall execute and deliver a
Receipt of like form and tenor in exchange and substitution for such mutilated
Receipt or in lieu of and in substitution for such destroyed, lost or stolen
Receipt unless the Depositary has notice that such Receipt has been acquired by
a bona fide purchaser; provided, however, that the holder thereof provides the
Depositary with (a) evidence satisfactory to the Depositary of such destruction,
loss or theft of such Receipt, of the authenticity thereof and of his ownership
thereof, (b) reasonable indemnification satisfactory to the Depositary or the
payment of any charges incurred by the Depositary in obtaining insurance in lieu
of such indemnification and (c) payment of any expense (including fees, charges
and expenses of the Depositary) in connection with such execution and delivery.
Section 2.10. Cancellation and Destruction of Surrendered Receipts. All
----------------------------------------------------
Receipts surrendered to the Depositary or any Depositary's Agent shall be
cancelled by the Depositary. Except as prohibited by applicable law or
regulation, the Depositary is authorized to destroy such Receipts so cancelled.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
OF RECEIPTS AND THE COMPANY
Section 3.01. Filing Proofs, Certificates and Other Information. Any
-------------------------------------------------
person presenting Stock for deposit or any holder of a Receipt may be required
from time to time to file such proof of residence or other information, to
execute such certificates and to make such representations and warranties as the
Depositary or the Company may reasonably deem necessary or proper. The
Depositary or the Company may withhold or delay the delivery of any Receipt, the
registration of transfer, redemption, conversion or exchange of any Receipt, the
withdrawal of the Stock represented by the Depositary Shares evidenced by any
Receipt or the distribution of any dividend or other distribution until such
proof or other information is filed, such certificates are executed or such
representations and warranties are made.
Section 3.02. Payment of Taxes or Other Governmental Charges. If any tax
----------------------------------------------
or other governmental charge shall become payable by or on behalf of the
Depositary with respect to (a) any Receipt, (b) the Depositary Shares evidenced
by such Receipt, (c) the Stock (or fractional interest therein) or other
property represented by such Depositary Shares, or (d) any transaction referred
to in Section 4.06, such tax (including transfer, issuance or acquisition taxes,
if any) or governmental charge shall be payable by the holder of such Receipt,
who shall pay the amount thereof to the Depositary. Until such payment is made,
registration of transfer of any Receipt or any split-up or combination thereof
or any withdrawal of the Stock or money or other property, if any, represented
9
<PAGE>
by the Depositary Shares evidenced by such Receipt may be refused, any dividend
or other distribution may be withheld and any part or all of the Stock or other
property (including Common Stock received in connection with a conversion or
redemption of Stock) represented by the Depositary Shares evidenced by such
Receipt may be sold for the account of the holder thereof (after attempting by
reasonable means to notify such holder prior to such sale). Any dividend or
other distribution so withheld and the proceeds of any such sale may be applied
to any payment of such tax or other governmental charge, the holder of such
Receipt remaining liable for any deficiency.
Section 3.03. Withholding. The Depositary shall act as the tax
-----------
withholding agent for any payments, distributions and exchanges made with
respect to the Depositary Shares and Receipts, and the Stock, Common Stock or
other securities or assets represented thereby (collectively, the "Securities").
The Depositary shall be responsible with respect to the Securities for the
timely (a) collection and deposit of any required withholding or backup
withholding tax, and (b) filing of any information returns or other documents
with federal (and other applicable) taxing authorities.
Section 3.04. Representations and Warranties as to Stock. In the case of
------------------------------------------
the initial deposit of the Stock, the Company and, in the case of subsequent
deposits thereof, each person so depositing Stock under this Deposit Agreement
shall be deemed thereby to represent and warrant that such Stock and each
certificate therefor are duly issued and that the person making such deposit is
duly authorized to do so. Such representations and warranties shall survive the
deposit of the Stock and the issuance of Receipts therefor.
ARTICLE IV
THE STOCK, NOTICES
Section 4.01. Cash Distributions. Whenever the Depositary shall receive
------------------
any cash dividend or other cash distribution on the Stock, the Depositary shall,
subject to Section 3.02, distribute to record holders of Receipts on the record
date fixed pursuant to Section 4.04 such amounts of such sum as are, as nearly
as practicable, in proportion to the respective numbers of Depositary Shares
evidenced by the Receipts held by such holders; provided, however, that in case
the Company or the Depositary shall be required by law to withhold and does
withhold from any cash dividend or other cash distribution in respect of the
Stock an amount on account of taxes, the amount made available for distribution
or distributed in respect of Depositary Shares shall be reduced accordingly. The
Depositary shall distribute or make available for distribution, as the case may
be, only such amount, however, as can be distributed without attributing to any
owner of Depositary Shares a fraction of one cent and any balance not so
distributable shall be held by the Depositary (without liability for interest
thereon) and shall be added to and be treated as part of the next sum received
by the Depositary for distribution to record holders of Receipts then
outstanding.
Section 4.02. Distributions Other than Cash. Whenever the Depositary shall
-----------------------------
receive any distribution other than cash, rights, preferences or privileges upon
the Stock, the Depositary shall, subject to Section 3.02, distribute to record
holders of Receipts on the record date fixed pursuant to
10
<PAGE>
Section 4.04 such amounts of the securities or property received by it as are,
as nearly as practicable, in proportion to the respective numbers of Depositary
Shares evidenced by the Receipts held by such holders, in any manner that the
Depositary and the Company may deem equitable and practicable for accomplishing
such distribution. If, in the opinion of the Depositary after consultation with
the Company, such distribution cannot be made proportionately among such record
holders, or if for any other reason (including any tax withholding or securities
law requirement), the Depositary deems, after consultation with the Company,
such distribution not to be feasible, the Depositary may, with the approval of
the Company which approval shall not be unreasonably withheld, adopt such method
as it deems equitable and practicable for the purpose of effecting such
distribution, including the sale (at public or private sale) of the securities
or property thus received, or any part thereof, at such place or places and upon
such terms as it may deem proper. The net proceeds of any such sale shall,
subject to Section 3.02, be distributed or made available for distribution, as
the case may be, by the Depositary to record holders of Receipts as provided by
Section 4.01 in the case of a distribution received in cash.
Section 4.03. Subscription Rights, Preferences or Privileges. If the
----------------------------------------------
Company shall at any time offer or cause to be offered to the persons in whose
names Stock is registered on the books of the Company any rights, preferences or
privileges to subscribe for or to purchase any securities or any rights,
preferences or privileges of any other nature, such rights, preferences or
privileges shall in each such instance be made available by the Depositary to
the record holders of Receipts in such manner as the Company shall instruct
(including by the issue to such record holders of warrants representing such
rights, preferences or privileges); provided, however, that (a) if at the time
of issue or offer of any such rights, preferences or privileges the Company
determines and instructs the Depositary that it is not lawful or feasible to
make such rights, preferences or privileges available to some or all holders of
Receipts (by the issue of warrants or otherwise) or (b) if and to the extent
instructed by holders of Receipts who do not desire to exercise such rights,
preferences or privileges, the Depositary shall then, in each case, and if
applicable laws or the terms of such rights, preferences or privileges so
permit, sell such rights, preferences or privileges of such holders at public or
private sale, at such place or places and upon such terms as it may deem proper.
The net proceeds of any such sale shall be distributed by the Depositary to the
record holders of Receipts entitled thereto as provided by Section 4.01 in the
case of a distribution received in cash.
If registration under the Securities Act of the securities to which any
rights, preferences or privileges relate is required in order for holders of
Receipts to be offered or sold, the Company shall promptly file a registration
statement pursuant to the Securities Act with respect to such securities and use
its best efforts and take all steps available to it to cause such registration
statement to become effective sufficiently in advance of the expiration of such
rights, preferences or privileges to enable such holders to exercise such
rights, preferences or privileges. In no event shall the Depositary make
available to the holders of Receipts any right, preference or privilege to
subscribe for or to purchase any securities unless and until such registration
statement shall have become effective or unless the offering and sale of such
securities to such holders are exempt from registration under the provisions of
the Securities Act.
11
<PAGE>
If any other action under the law of any jurisdiction or any governmental
or administrative authorization, consent or permit is required in order for such
rights, preferences or privileges to be made available to holders of Receipts,
the Company agrees with the Depositary that the Company will use its reasonable
best efforts to take such action or obtain such authorization, consent or permit
sufficiently in advance of the expiration of such rights, preferences or
privileges to enable such holders to exercise such rights, preferences or
privileges.
Section 4.04. Notice of Dividends, Fixing of Record Date for Holders Of
---------------------------------------------------------
Receipts. Whenever (a) any cash dividend or other cash distribution shall become
- --------
payable, or any distribution other than cash shall be made, or any rights,
preferences or privileges shall at any time be offered, with respect to the
Stock, or (b) the Depositary shall receive notice of any meeting at which
holders of Stock are entitled to vote or of which holders of Stock are entitled
to notice or of the mandatory conversion of, or any election on the part of the
Company to call for the redemption of, any shares of Stock, the Depositary shall
in each such instance fix a record date (which shall be the same date as the
record date fixed by the Company with respect to the Stock) for the
determination of the holders of Receipts (i) who shall be entitled to receive
such dividend, distribution, rights, preferences or privileges or the net
proceeds of the sale thereof, or (ii) who shall be entitled to give instructions
for the exercise of voting rights at any such meeting or to receive notice of
such meeting or of such conversion or redemption.
Section 4.05. Voting Rights. Upon receipt of notice of any meeting at
-------------
which the holders of Stock are entitled to vote, the Depositary shall, as soon
as practicable thereafter, mail to the record holders of Receipts a notice,
which shall be provided by the Company and which shall contain (a) such
information as is contained in such notice of meeting, (b) a statement that the
holders of Receipts at the close of business on a specified record date fixed
pursuant to Section 4.04 will be entitled, subject to any applicable provision
of law, the Certificate of Incorporation or the Certificate of Determination, to
instruct the Depositary as to the exercise of the voting rights pertaining to
the Stock represented by their respective Depositary Shares and (c) a brief
statement as to the manner in which such instructions may be given. Upon the
written request of a holder of a Receipt on such record date, the Depositary
shall endeavor insofar as practicable to vote or cause to be voted the Stock
represented by the Depositary Shares evidenced by such Receipt in accordance
with the instructions set forth in such request. The Company hereby agrees to
take all reasonable action that may be deemed necessary by the Depositary in
order to enable the Depositary to vote such Stock or cause such Stock to be
voted. In the absence of specific instructions from the holder of a Receipt, the
Depositary will abstain from voting to the extent of the Stock represented by
the Depositary Shares evidenced by such Receipt.
Section 4.06. Changes Affecting Stock and Reclassifications,
----------------------------------------------
Recapitalizations, Etc. Upon any split-up, consolidation or any other
- ----------------------
reclassification of Stock, or upon any recapitalization, reorganization, merger,
amalgamation or consolidation affecting the Company or to which it is a party
(other than a Merger or Consolidation) or sale of all or substantially all of
the Company's assets, the Depositary shall treat any shares of stock or other
securities or property (including cash) that shall be received by the Depositary
in exchange for or upon conversion of or in respect of the Stock as new
12
<PAGE>
deposited property under this Deposit Agreement, and Receipts then outstanding
shall thenceforth represent the proportionate interests of holders thereof in
the new deposited property so received in exchange for or upon conversion or in
respect of such Stock. In any such case the Depositary may, in its discretion,
with the approval of the Company, execute and deliver additional Receipts, or
may call for the surrender of all outstanding Receipts to be exchanged for new
Receipts specifically describing such new deposited property.
Section 4.07. Reports. The Depositary shall make available for inspection
-------
by holders of Receipts at the Corporate Office, the New York Office and at such
other places as it may from time to time deem advisable during normal business
hours any reports and communications received from the Company that are received
by the Depositary as the holder of Stock.
Section 4.08. Lists of Receipt Holders. Promptly upon request from time to
------------------------
time by the Company, the Depositary shall furnish to it a list, as of a recent
date, of the names, addresses and holdings of Depositary Shares of all persons
in whose names Receipts are registered on the books of the Depositary. At the
expense of the Company, the Company shall have the right to inspect transfer and
registration records of the Depositary, any Depositary's Agent or the Registrar,
take copies thereof and require the Depositary, any Depositary's Agent or the
Registrar to supply copies of such portions of such records as the Company may
request.
ARTICLE V
THE DEPOSITARY, THE DEPOSITARY'S AGENTS,
THE REGISTRAR AND THE COMPANY
Section 5.01. Maintenance of Offices, Agencies, Transfer Books by the
-------------------------------------------------------
Depositary; the Registrar. Upon execution of this Deposit Agreement in
- -------------------------
accordance with its terms, the Depositary shall maintain (a) at the New York
Office facilities for the execution and delivery, registration, registration of
transfer, surrender and exchange, split-up, combination, redemption and
conversion of Receipts and deposit and withdrawal of Stock and (b) at the
Corporate Office and at the offices of the Depositary's Agents, if any,
facilities for the delivery, registration, registration of transfer, surrender
and exchange, split-up, combination, conversion and redemption of Receipts and
deposit and withdrawal of Stock, all in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at the Corporate Office for the
registration and transfer of Receipts, which books at all reasonable times shall
be open for inspection by the record holders of Receipts; provided that any such
holder requesting to exercise such right shall certify to the Depositary that
such inspection shall be for a proper purpose reasonably related to such
person's interest as a holder of Depositary Shares. The Depositary shall consult
with the Company upon receipt of any request for inspection. The Depositary may
close such books, at any time or from time to time, when deemed necessary by it
in connection with the performance of its duties hereunder.
13
<PAGE>
If the Receipts or the Depositary Shares evidenced thereby or the Stock
represented by such Depositary Shares shall be listed on one or more stock
exchanges, the Depositary shall, with the approval of the Company, appoint a
Registrar for registry of such Receipts or Depositary Shares in accordance with
the requirements of such exchange or exchanges. Such Registrar (which may be the
Depositary if so permitted by the requirements of such exchange or exchanges)
may be removed and a substitute registrar appointed by the Depositary upon the
request or with the approval of the Company. In addition, if the Receipts, such
Depositary Shares or such Stock are listed on one or more stock exchanges, the
Depositary will, at the request of the Company, arrange such facilities for the
delivery, registration, registration of transfer, surrender and exchange, split-
up, combination, redemption or conversion of such Receipts, such Depositary
Shares or such Stock as may be required by law or applicable stock exchange
regulations.
Section 5.02. Prevention or Delay in Performance by the Depositary, the
---------------------------------------------------------
Depositary's Agents, the Registrar or the Company. Neither the Depositary nor
- -------------------------------------------------
any Depositary's Agent nor the Registrar nor the Company shall incur any
liability to any holder of any Receipt, if by reason of any provision of any
present or future law or regulation thereunder of the United States of America
or of any other governmental authority or, in the case of the Depositary, the
Registrar or any Depositary's Agent, by reason of any provision, present or
future, of the Certificate of Incorporation or the Certificate of Determination
or, in the case of the Company, the Depositary, the Registrar or any
Depositary's Agent, by reason of any act of God or war or other circumstances
beyond the control of the relevant party, the Depositary, any Depositary's
Agent, the Registrar or the Company shall be prevented or forbidden from doing
or performing any act or thing that the terms of this Deposit Agreement provide
shall be done or performed; nor shall the Depositary, any Depositary's Agent,
the Registrar or the Company incur any liability to any holder of a Receipt (a)
by reason of any nonperformance or delay, caused as aforesaid, in the
performance of any act or thing that the terms of this Deposit Agreement provide
shall or may be done or performed, or (b) by reason of any exercise of, or
failure to exercise, any discretion provided for in this Deposit Agreement
except, in the case of the Depositary, any Depositary's Agent or the Registrar,
if any such exercise or failure to exercise discretion is caused by its
negligence or bad faith.
Section 5.03. Obligations of the Depositary, the Depositary's Agents, the
-----------------------------------------------------------
Registrar and the Company. The Company assumes no obligation and shall be
- -------------------------
subject to no liability under this Deposit Agreement or the Receipts to holders
or other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in this Deposit
Agreement. Each of the Depositary, the Depositary's Agents and the Registrar
assumes no obligation and shall be subject to no liability under this Deposit
Agreement or the Receipts to holders or other persons, except to perform such
obligations as are specifically set forth and undertaken by it to perform in
this Deposit Agreement without negligence or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Stock, Depositary Shares,
Receipts or Common Stock that in its opinion may involve it
14
<PAGE>
in expense or liability, unless indemnity satisfactory to it against all expense
and liability be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company shall be liable for any action or any failure to act by it in reliance
upon the advice of or information from legal counsel, accountants, any person
presenting Stock for deposit, any holder of a Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
The Depositary, any Depositary's Agent, the Registrar and the Company may each
rely and shall each be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
The Depositary, the Registrar and any Depositary's Agent may own and deal
in any class of securities of the Company and its affiliates and in Receipts or
Depositary Shares. The Depositary may also act as transfer agent or registrar of
any of the securities of the Company and its affiliates.
It is intended that neither the Depositary nor any Depositary's Agent shall
be deemed to be an "issuer" of the Stock, the Depositary Shares, the Receipts or
the Common Stock issued upon conversion or redemption of the Stock under the
federal securities laws or applicable state securities laws, it being expressly
understood and agreed that the Depositary and any Depositary's Agent are acting
only in a ministerial capacity as Depositary for the Stock; provided, however,
that the Depositary agrees to comply with all information reporting and
withholding requirements applicable to it under law or this Deposit Agreement in
its capacity as Depositary.
Neither the Depositary (or its officers, directors, employees or agents)
nor any Depositary's Agent makes any representation or has any responsibility as
to the validity of any Registration Statement pursuant to which the Depositary
Shares are registered under the Securities Act, the Stock, the Depositary Shares
or any instruments referred to therein or herein, or as to the correctness of
any statement made therein or herein; provided, however, that the Depositary is
responsible for its representations in this Deposit Agreement.
The Depositary assumes no responsibility for the correctness of the
description that appears in the Receipts, which can be taken as a statement of
the Company summarizing certain provisions of this Deposit Agreement.
Notwithstanding any other provision herein or in the Receipts, the Depositary
makes no warranties or representations as to the validity, genuineness or
sufficiency of any Stock at any time deposited with the Depositary hereunder or
of the Depositary Shares, as to the validity or sufficiency of this Deposit
Agreement, as to the value of the Depositary Shares or as to any right, title or
interest of the record holders of Receipts in and to the Depositary Shares
except that the Depositary hereby represents and warrants as follows: (a) the
Depositary has been duly organized and is validly existing and in good standing
under the laws of the State of ____________, with full power, authority and
legal right under such law to execute, deliver and carry out the terms of this
Deposit Agreement; (b) this Deposit Agreement has been duly authorized, executed
and delivered by the Depositary; and (c) this Deposit Agreement constitutes a
valid and binding obligation of the Depositary, enforceable against the
Depositary in accordance with its terms, except as enforcement
15
<PAGE>
thereof may be limited by bankruptcy, insolvency, reorganization or other
similar laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law). The
Depositary shall not be accountable for the use or application by the Company of
the Depositary Shares or the Receipts or the proceeds thereof.
Section 5.04. Resignation and Removal of the Depositary; Appointment Of
---------------------------------------------------------
Successor Depositary. The Depositary may at any time resign as Depositary
- --------------------
hereunder by written notice via registered mail of its election to do so
delivered to the Company, such resignation to take effect upon the appointment
of a successor depositary and its acceptance of such appointment as hereinafter
provided.
The Depositary may at any time be removed by the Company by written notice
of such removal delivered to the Depositary, such removal to take effect upon
the appointment of a successor depositary and its acceptance of such appointment
as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall, within 60 days after the delivery of the notice of
resignation or removal, as the case may be, appoint a successor depositary,
which shall be a bank or trust company, or an affiliate of a bank or trust
company, having its principal office in the United States of America and having
a combined capital and surplus of at least $50,000,000. If a successor
depositary shall not have been appointed in 60 days, the resigning or removed
Depositary may petition a court of competent jurisdiction to appoint a successor
depositary. Every successor depositary shall execute and deliver to its
predecessor and to the Company an instrument in writing accepting its
appointment hereunder, and thereupon such successor depositary, without any
further act or deed, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor and for all purposes shall be the
Depositary under this Deposit Agreement, and such predecessor, upon payment of
all sums due it and on the written request of the Company, shall promptly
execute and deliver an instrument transferring to such successor all rights and
powers of such predecessor hereunder, shall duly assign, transfer and deliver
all rights, title and interest in the Stock and any moneys or property held
hereunder to such successor and shall deliver to such successor a list of the
record holders of all outstanding Receipts. Any successor depositary shall
promptly mail notice of its appointment to the record holders of Receipts.
Any corporation into or with which the Depositary may be merged,
consolidated or converted shall be the successor of such Depositary without the
execution or filing of any document or any further act. Such successor
depositary may execute the Receipts either in the name of the predecessor
depositary or in the name of the successor depositary.
Section 5.05. Corporate Notices and Reports. The Company agrees that it
-----------------------------
will deliver to the Depositary, and the Depositary will, promptly after receipt
thereof, transmit to the record holders of Receipts, in each case at the address
recorded in the Depositary's books, copies of all notices and reports (including
financial statements) required by law, by the rules of any national securities
16
<PAGE>
exchange upon which the Stock, the Depositary Shares or the Receipts are listed
or by the Certificate of Incorporation and the Certificate of Determination to
be furnished by the Company to holders of Stock. Such transmission will be at
the Company's expense and the Company will provide the Depositary with such
number of copies of such documents as the Depositary may reasonably request. In
addition, the Depositary will transmit to the record holders of Receipts at the
Company's expense such other documents as may be requested by the Company.
Section 5.06. Deposit of Stock by the Company. The Company agrees with the
-------------------------------
Depositary that neither the Company nor any company controlled by the Company
will at any time deposit any Stock if such Stock is required to be registered
under the provisions of the Securities Act and no registration statement is at
such time in effect as to such Stock.
Section 5.07. Indemnification by the Company. The Company agrees to
------------------------------
indemnify the Depositary, any Depositary's Agent and any Registrar against, and
hold each of them harmless from, any liability, costs and expenses (including
reasonable fees and expenses of counsel) that may arise out of or in connection
with its acting as Depositary, Depositary's Agent or Registrar, respectively,
under this Deposit Agreement and the Receipts, except for any liability arising
out of negligence, bad faith or willful misconduct on the part of any such
person or persons.
Section 5.08. Fees, Charges and Expenses. No fees, charges and expenses of
--------------------------
the Depositary or any Depositary's Agent hereunder or of any Registrar shall be
payable by any person other than the Company, except for any taxes and other
governmental charges and except as provided in this Deposit Agreement. If, at
the request of a holder of a Receipt, the Depositary incurs fees, charges or
expenses for which it is not otherwise liable hereunder, such holder or other
person will be liable for such fees, charges and expenses. All other fees,
charges and expenses of the Depositary and any Depositary's Agent hereunder and
of any Registrar (including, in each case, reasonable fees and expenses of
counsel) incident to the performance of their respective obligations hereunder
will be paid from time to time upon consultation and agreement between the
Depositary and the Company as to the amount and nature of such fees, charges and
expenses.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01. Amendment. The form of the Receipts and any provision of
---------
this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect that they may
deem necessary or desirable. Any amendment that shall impose or increase any
fees, taxes or charges payable by holders of Receipts (other than taxes and
other governmental charges, fees and other expenses payable by holders pursuant
to the terms hereof or of the Receipts), or that otherwise prejudices any
substantial existing right of holders of Receipts, shall not become effective as
to outstanding Receipts until the expiration of 30 days after notice of such
amendment shall have been mailed to the record holders of outstanding Receipts.
Every holder of an outstanding Receipt at the time any such amendment becomes
effective shall be
17
<PAGE>
deemed, by continuing to hold such Receipt, to consent and agree to such
amendment and to be bound by this Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to the provisions of
Sections 2.04, 2.07 and 2.08 and Article III, of any owner of any Depositary
Shares to surrender the Receipt evidencing such Depositary Shares with
instructions to the Depositary to deliver to the holder the Stock and all money
and other property, if any, represented thereby, except in order to comply with
mandatory provisions of applicable law.
Section 6.02. Termination. Whenever so directed by the Company, the
-----------
Depositary will terminate this Deposit Agreement by mailing notice of such
termination to the record holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notice for such termination. The Depositary
may likewise terminate this Deposit Agreement if at any time 90 days shall have
expired after the Depositary shall have delivered to the Company a written
notice of its election to resign and a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.04. In either
case, on a date not less than 90 days after such notice, the Depositary shall
deliver or make available for delivery to holders of Receipts, upon surrender of
such Receipts evidencing Depositary Shares, such number of whole or fractional
shares of the Stock as are represented by the Depositary Shares.
This Deposit Agreement shall automatically terminate after all outstanding
Depositary Shares have been redeemed or there has been a final distribution in
respect of the Stock in connection with any liquidation, dissolution or winding
up of the Company and such distribution has been distributed to the holders of
the Receipts.
If any Receipts shall remain outstanding after the date of termination of
this Deposit Agreement, the Depositary thereafter shall discontinue the transfer
of Receipts, shall suspend the distribution of dividends to the holders thereof
and shall not give any further notices (other than notice of such termination)
or perform any further acts under this Deposit Agreement, except as provided
below and that the Depositary shall continue to collect dividends and other
distributions pertaining to Stock, shall sell rights, preferences or privileges
as provided in this Deposit Agreement and shall continue to deliver the Stock
and any money and other property represented by Receipts, without liability for
interest thereon, upon surrender thereof by the holders thereof. At any time
after the expiration of two years from the date of termination, the Depositary
may sell Stock then held hereunder at public or private sale, at such places and
upon such terms as it deems proper and may thereafter hold in a segregated
account the net proceeds of any such sale, together with any money and other
property held by it hereunder, without liability for interest, for the benefit,
pro rata in accordance with their holdings, of the holders of Receipts that have
not heretofore been surrendered. After making such sale, the Depositary shall be
discharged from all obligations under this Deposit Agreement except to account
for such net proceeds and money and other property. Upon the termination of this
Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary, any
Depositary's Agent and any Registrar under Sections 5.07 and 5.08.
ARTICLE VII
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<PAGE>
MISCELLANEOUS
Section 7.01. Counterparts. This Deposit Agreement may be executed by the
------------
Company and the Depositary in separate counterparts, each of which counterparts,
when so executed and delivered, shall be deemed an original, but all such
counterparts taken together shall constitute one and the same instrument.
Delivery of an executed counterpart of a signature page to this Deposit
Agreement by telecopier shall be effective as delivery of a manually executed
counterpart of this Deposit Agreement. Copies of this Deposit Agreement shall be
filed with the Depositary and the Depositary's Agents and shall be open to
inspection during business hours at the Corporate Office and the New York Office
and the respective offices of the Depositary's Agents, if any, by any holder of
a Receipt.
Section 7.02. Exclusive Benefits of Parties. This Deposit Agreement is
-----------------------------
for the exclusive benefit of the parties hereto, and their respective successors
hereunder, and shall not be deemed to give any legal or equitable right, remedy
or claim to any other person whatsoever.
Section 7.03. Invalidity of Provisions. In case any one or more of the
------------------------
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
Section 7.04. Notices. Any notices to be given to the Company hereunder
-------
or under the Receipts shall be in writing and shall be deemed to have been duly
given if personally delivered or sent by mail, or by telegram or telex or
telecopier confirmed by letter, addressed to the Company at 2001 Third Avenue
South, Birmingham, Alabama 35233, Attention: General Counsel, or at any other
place to which the Company may have transferred its principal executive office.
Any notices to be given to the Depositary hereunder or under the Receipts
shall be in writing and shall be deemed to have been duly given if personally
delivered or sent by mail, or by telegram or telex or telecopier confirmed by
letter, addressed to the Depositary at the Corporate Office.
Any notices given to any record holder of a Receipt hereunder or under the
Receipts shall be in writing and shall be deemed to have been duly given if
personally delivered or sent by mail, or by telegram or telex or telecopier
confirmed by letter, addressed to such record holder at the address of such
record holder as it appears on the books of the Depositary or, if such holder
shall have filed with the Depositary a written request that notices intended for
such holder be mailed to some other address, at the address designated in such
request.
Delivery of a notice sent by mail, or by telegram or telex or telecopier
shall be deemed to be effected at the time when a duly addressed letter
containing the same (or a duly addressed letter confirming an earlier notice in
the case of a telegram or telex or telecopier message) is deposited, postage
prepaid, in a post office letter box. The Depositary or the Company may,
however, act upon any telegram or telex or telecopier message received by it
from the other or from any holder of a
19
<PAGE>
Receipt, notwithstanding that such telegram or telex or telecopier message shall
not subsequently be confirmed by letter as aforesaid.
Section 7.05. Depositary's Agents. The Depositary may, with the approval
-------------------
of the Company which approval shall not be unreasonably withheld, from time to
time appoint one or more Depositary's Agents to act in any respect for the
Depositary for the purposes of this Deposit Agreement and may vary or terminate
the appointment of such Depositary's Agents.
Section 7.06. Holders of Receipts Are Parties. Notwithstanding that
-------------------------------
holders of Receipts have not executed and delivered this Deposit Agreement or
any counterpart thereof, the holders of Receipts from time to time shall be
deemed to be parties to this Deposit Agreement and shall be bound by all of the
terms and conditions, and be entitled to all of the benefits, hereof and of the
Receipts by acceptance of delivery of Receipts.
Section 7.07. Governing Law. THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND
-------------
ALL RIGHTS HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK,
INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW.
Section 7.08. Headings. The headings of articles and sections in this
--------
Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto
have been inserted for convenience only and are not to be regarded as a part of
this Deposit Agreement or to have any bearing upon the meaning or interpretation
of any provision contained herein or in the Receipts.
20
<PAGE>
IN WITNESS WHEREOF, Torchmark Corporation and ________________ have duly
executed this Deposit Agreement as of the day and year first above set forth and
all holders of Receipts shall become parties hereto by and upon acceptance by
them of delivery of Receipts issued in accordance with the terms hereof.
TORCHMARK CORPORATION
Attest:
By:___________________________ By:___________________________
Name:
Title:
Attest:
By:___________________________ By:___________________________
Name:
Title:
21
<PAGE>
EXHIBIT A
DEPOSITARY RECEIPT
FOR
DEPOSITARY SHARES
EACH REPRESENTING ______________ OF A SHARE OF
_______________ SERIES PREFERRED
STOCK
OF
TORCHMARK CORPORATION
(Incorporated under the Laws of the State of Delaware)
No._____________
_________________________________ (the "Depositary") hereby certifies that
____________ is the registered owner of ___________ Depositary Shares (the
"Depositary Shares"), each Depositary Share representing _____________ of a
share of ____________________________ Preferred Stock (the "Stock"), of
Torchmark Corporation, a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and the same proportionate interest in
any and all other property received by the Depositary in respect of such shares
of Stock and held by the Depositary under the Deposit Agreement (as defined
below). Subject to the terms of the Deposit Agreement, each owner of a
Depositary Share is entitled, proportionately, to all the rights, preferences
and privileges of the Stock represented thereby, including the dividend, voting,
liquidation and other rights contained in the Certificate of Determination
establishing the rights, preferences, privileges and limitations of the Stock
(the "Certificate of Determination"), copies of which are on file at the office
of the Depositary at which at any particular time its business in respect of
matters governed by the Deposit Agreement shall be administered, which at the
time of the execution of the Deposit Agreement is located at ________________,
______________, ____ ______ (the "Corporate Office").
This Depositary Receipt ("Receipt") shall not be entitled to any benefits
under the Deposit Agreement or be valid or obligatory for any purpose unless
this Receipt shall have been executed manually or, if a Registrar for the
Receipts (other than the Depositary) shall have been appointed, by facsimile by
the Depositary by the signature of a duly authorized signatory and, if executed
by facsimile signature of the Depositary, shall have been countersigned manually
by such Registrar by the signature of a duly authorized signatory.
THE DEPOSITARY IS NOT RESPONSIBLE FOR THE VALIDITY OF ANY DEPOSITED STOCK.
THE DEPOSITARY ASSUMES NO RESPONSIBILITY FOR THE CORRECTNESS OF THE DESCRIPTION
SET FORTH IN THIS RECEIPT, WHICH CAN BE TAKEN AS A STATEMENT OF THE COMPANY
SUMMARIZING CERTAIN
A-1
<PAGE>
PROVISIONS OF THE DEPOSIT AGREEMENT. UNLESS EXPRESSLY SET FORTH IN THE DEPOSIT
AGREEMENT, THE DEPOSITARY MAKES NO WARRANTIES OR REPRESENTATIONS AS TO THE
VALIDITY, GENUINENESS OR SUFFICIENCY OF ANY STOCK AT ANY TIME DEPOSITED WITH THE
DEPOSITARY UNDER THE DEPOSIT AGREEMENT OR OF THE DEPOSITARY SHARES, AS TO THE
VALIDITY OR SUFFICIENCY OF THE DEPOSIT AGREEMENT, AS TO THE VALUE OF THE
DEPOSITARY SHARES OR AS TO ANY RIGHT, TITLE OR INTEREST OF THE RECORD HOLDERS OF
THE DEPOSITARY RECEIPTS IN AND TO THE DEPOSITARY SHARES.
The Company will furnish to any holder of this Receipt without charge, upon
request addressed to its executive office, a full statement of the designations,
relative rights, preferences and limitations of the shares of each authorized
class, and of each class of preferred stock authorized to be issued, so far as
the same may have been fixed, and a statement of the authority of the Board of
Directors of the Company to designate and fix the relative rights, preferences
and limitations of other classes.
This Receipt is continued on the reverse hereof and the additional
provisions therein set forth for all purposes have the same effect as if set
forth at this place.
Dated:
____________________________,
as Depositary and Registrar
By:_________________________
Authorized Signatory
A-2
<PAGE>
[FORM OF REVERSE
OF DEPOSITARY RECEIPT]
1. THE DEPOSIT AGREEMENT. Depositary Receipts (the "Receipts"), of which
this Receipt is one, are made available upon the terms and conditions set forth
in the Deposit Agreement, dated as of _________ ____, _____ (the "Deposit
Agreement"), among the Company, the Depositary and all holders from time to time
of Receipts. The Deposit Agreement (copies of which are on file at the Corporate
Office, the office maintained by the Depositary in the Borough of Manhattan, The
City of New York, which at the time of the execution of the Deposit Agreement is
located at ________________________ (the "New York Office") and at the office of
any agent of the Depositary) sets forth the rights of holders of Receipts and
the rights and duties of the Depositary. The statements made on the face and the
reverse of this Receipt are summaries of certain provisions of the Deposit
Agreement and are subject to the detailed provisions thereof, to which reference
is hereby made. In the event of any conflict between the provisions of this
Receipt and the provisions of the Deposit Agreement, the provisions of the
Deposit Agreement will govern.
2. DEFINITIONS. Unless otherwise expressly herein provided, all defined
terms used herein shall have the meanings ascribed thereto in the Deposit
Agreement.
3. REDEMPTION AND CONVERSION OF STOCK./3/ Whenever the Company shall
elect to redeem or be required to convert shares of Stock into shares of Common
Stock in accordance with the Certificate of Determination, it shall (unless
otherwise agreed in writing with the Depositary) give the Depositary in its
capacity as Depositary not less than 5 business days' prior notice of the
proposed date of the mailing of a notice of redemption or conversion of Stock
and the simultaneous redemption or conversion of the Depositary Shares
representing the Stock to be redeemed or converted and of the number of such
shares of Stock held by the Depositary to be redeemed or converted. The
Depositary shall, as directed by the Company in writing, mail, first class
postage prepaid, notice of the redemption or conversion of Stock and the
proposed simultaneous redemption or conversion of Depositary Shares representing
the Stock to be redeemed or converted, not less than 30 and not more than 60
days prior to the date fixed for redemption or conversion of such Stock and
Depositary Shares, to the record holders of the Receipts evidencing the
Depositary Shares to be so redeemed or converted, at the addresses of such
holders as the same appear on the records of the Depositary; provided, that if
the effectiveness of a Merger or Consolidation (as defined in the Certificate of
Determination) makes it impracticable to provide at least 30 days' notice, the
Depositary shall provide such notice as soon as practicable prior to such
effectiveness. Any such notice shall also be published in the same manner as
notices of redemption or conversion of the Stock are required to be published
pursuant to the Certificate of Determination. On the date of any such redemption
or conversion, the Depositary shall surrender the certificate or certificates
held by the Depositary evidencing the number of shares of Stock to be redeemed
or converted in the manner specified in the notice of redemption or conversion
of Stock provided by the Company pursuant to the Certificate of Determination.
The Depositary shall, thereafter, redeem or convert the number of Depositary
_______________
/3/ This section to be modified to discuss specific redemption or
conversion terms of the Stock, if any.
A-3
<PAGE>
Shares representing such redeemed or converted Stock upon the surrender of
Receipts evidencing such Depositary Shares in the manner provided in the notice
sent to record holders of Receipts; provided, that the Depositary shall have
received, upon surrendering such certificate or certificates as aforesaid, a
sufficient number of shares of Common Stock to convert or redeem such number of
Depositary Shares (including, in the event that the Company elects pursuant to
the Certificate of Determination to exercise any option to deliver shares of
Common Stock in lieu of any cash consideration payable on the Effective Date (as
defined in the Certificate of Determination) of any Merger or Consolidation, a
number of shares of Common Stock equal to such cash consideration (as determined
in the manner set forth in the Certificate of Determination)), plus any accrued
and unpaid dividends payable with respect thereto to and including the date of
any such redemption or conversion and any other cash consideration payable on
the Effective Date of a Merger or Consolidation (other than any dividends or
other cash consideration payable on the Effective Date of a Merger or
Consolidation that the Company has elected to pay in shares of Common Stock
pursuant to the Certificate of Determination). In case fewer than all the
outstanding Depositary Shares are to be redeemed, the Depositary Shares to be
redeemed shall be selected by the Depositary by lot or on a pro rata basis.
Notice having been mailed and published as aforesaid, from and after the
redemption or conversion date (unless the Company shall have failed to redeem or
convert the shares of Stock to be redeemed or converted by it upon the surrender
of the certificate or certificates therefor by the Depositary as described
above), the Depositary Shares called for redemption or subject to conversion
shall be deemed no longer to be outstanding and all rights of the holders of
Receipts evidencing such Depositary Shares (except the right to receive the
shares of Common Stock and cash, if any, payable upon redemption or conversion
upon surrender of such Receipts) shall, to the extent of such Depositary Shares,
cease and terminate. Upon surrender in accordance with said notice of the
Receipts evidencing such Depositary Shares (properly endorsed or assigned for
transfer, if the Depositary shall so require), such Depositary Shares shall be
converted into or redeemed for shares of Common Stock at a rate equal to
______________ of the number of shares of Common Stock delivered, and the
holders thereof shall be entitled to ______________ of the cash, if any,
payable, in respect of the shares of Stock pursuant to the Certificate of
Determination. The foregoing is subject further to the terms and conditions of
the Certificate of Determination. If fewer than all of the Depositary Shares
evidenced by this Receipt are called for redemption, the Depositary will deliver
to the holder of this Receipt upon its surrender to the Depositary, together
with shares of Common Stock and all accrued and unpaid dividends to and
including the date fixed for redemption payable in respect of the Depositary
Shares called for redemption, a new Receipt evidencing the Depositary Shares
evidenced by such prior Receipt and not called for redemption.
4. SURRENDER OF RECEIPTS AND WITHDRAWAL OF STOCK. Upon surrender of this
Receipt to the Depositary at the Corporate Office, the New York Office or at
such other offices as the Depositary may designate, and subject to the
provisions of the Deposit Agreement, the holder hereof is entitled to withdraw,
and to obtain delivery, without unreasonable delay, to or upon the order of such
holder, any or all of the Stock (but only in whole shares of Stock) and all
money and other property, if any, at the time represented by the Depositary
Shares evidenced by this Receipt;
A-4
<PAGE>
provided, however, that, in the event this Receipt shall evidence a number of
Depositary Shares in excess of the number of Depositary Shares representing the
whole number of shares of Stock to be withdrawn, the Depositary shall, in
addition to such whole number of shares of Stock and such money and other
property, if any, to be withdrawn, deliver, to or upon the order of such holder,
a new Receipt or Receipts evidencing such excess number of whole Depositary
Shares.
5. TRANSFERS, SPLIT-UPS, COMBINATIONS. Subject to Paragraphs 6, 7 and 8
below, this Receipt is transferable on the books of the Depositary upon
surrender of this Receipt to the Depositary at the Corporate Office or the New
York Office, or at such other offices as the Depositary may designate, properly
endorsed or accompanied by a properly executed instrument of transfer, and upon
such transfer the Depositary shall sign and deliver a Receipt or Receipts to or
upon the order of the person entitled thereto, all as provided in and subject to
the Deposit Agreement. This Receipt may be split into other Receipts or combined
with other Receipts into one Receipt evidencing the same aggregate number of
Depositary Shares evidenced by the Receipt or Receipts surrendered; provided,
however, that the Depositary shall not issue any Receipt evidencing a fractional
Depositary Share.
6. CONDITIONS TO SIGNING AND DELIVERY, TRANSFER, ETC., OF RECEIPTS. Prior
to the execution and delivery, registration of transfer, split-up, combination,
surrender or exchange of this Receipt, the delivery of any distribution hereon
or the withdrawal or deposit of Stock, the Depositary, any of the Depositary's
Agents or the Company may require any or all of the following: (a) payment to it
of a sum sufficient for the payment (or, in the event that the Depositary or the
Company shall have made such payment, the reimbursement to it) of any tax or
other governmental charge with respect thereto (including any such tax or charge
with respect to Stock being deposited or withdrawn or with respect to Common
Stock or other securities or property of the Company being issued upon
conversion or redemption); (b) production of proof satisfactory to it as to the
identity and genuineness of any signature; and (c) compliance with such
reasonable regulations, if any, as the Depositary or the Company may establish
not inconsistent with the Deposit Agreement. Any person presenting Stock for
deposit, or any holder of this Receipt, may be required to file such proof of
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may reasonably deem necessary or
proper. The Depositary or the Company may withhold or delay the delivery of this
Receipt, the registration of transfer, redemption, conversion or exchange of
this Receipt, the withdrawal of the Stock represented by the Depositary Shares
evidenced by this Receipt or the distribution of any dividend or other
distribution until such proof or other information is filed, such certificates
are executed or such representations and warranties are made.
7. SUSPENSION OF DELIVERY, TRANSFER, ETC. The deposit of Stock may be
refused and the delivery of this Receipt against Stock or the registration of
transfer, split-up, combination, surrender or exchange of this Receipt and the
withdrawal of deposited Stock may be suspended (a) during any period when the
register of shareholders of the Company is closed, (b) if any such action is
deemed necessary or advisable by the Depositary, any of the Depositary's Agents
or the Company at any time or from time to time because of any requirement of
law or of any
A-5
<PAGE>
government or governmental body or commission, or under any provision of the
Deposit Agreement, or (c) with the approval of the Company, for any other
reason. The Depositary shall not be required (x) to issue, transfer or exchange
any Receipts for a period beginning at the opening of business 15 days next
preceding any selection of Depositary Shares and Stock to be redeemed and ending
at the close of business on the day of the mailing of notice of redemption of
Depositary Shares or (y) to transfer or exchange for another Receipt any Receipt
evidencing Depositary Shares called or being called for redemption, in whole or
in part, or subject to conversion except as provided in the last sentence of
Paragraph 3.
8. PAYMENT OF TAXES OR OTHER GOVERNMENTAL CHARGES. If any tax or other
governmental charge shall become payable by or on behalf of the Depositary with
respect to (a) this Receipt, (b) the Depositary Shares evidenced by this
Receipt, (c) the Stock (or fractional interest therein) or other property
represented by such Depositary Shares, or (d) any transaction referred to in
Section 4.06 of the Deposit Agreement, such tax (including transfer, issuance or
acquisition taxes, if any) or governmental charge shall be payable by the holder
of this Receipt, who shall pay the amount thereof to the Depositary. Until such
payment is made, registration of transfer of this Receipt or any split-up or
combination hereof or any withdrawal of the Stock or money or other property, if
any, represented by the Depositary Shares evidenced by this Receipt may be
refused, any dividend or other distribution may be withheld and any part or all
of the Stock or other property (including Common Stock received in connection
with a conversion or redemption of Stock) represented by the Depositary Shares
evidenced by this Receipt may be sold for the account of the holder hereof
(after attempting by reasonable means to notify such holder prior to such sale).
Any dividend or other distribution so withheld and the proceeds of any such sale
may be applied to any payment of such tax or other governmental charge, the
holder of this Receipt remaining liable for any deficiency.
9. AMENDMENT. The form of the Receipts and any provision of the Deposit
Agreement may at any time and from time to time be amended by agreement between
the Company and the Depositary in any respect that they may deem necessary or
desirable. Any amendment that shall impose or increase any fees, taxes or
charges payable by holders of Receipts (other than taxes and other governmental
charges, fees and other expenses payable by holders as provided herein or in the
Deposit Agreement), or that shall otherwise prejudice any substantial existing
right of holders of Receipts, shall not become effective as to outstanding
Receipts until the expiration of 30 days after such notice of such amendment
shall have been given to the record holders of outstanding Receipts. The holder
of this Receipt at the time any such amendment becomes effective shall be
deemed, by continuing to hold this Receipt, to consent and agree to such
amendment and to be bound by the Deposit Agreement as amended thereby. In no
event shall any amendment impair the right, subject to the provisions of
Paragraphs 3, 4, 6, 7 and 8 hereof and of Sections 2.04, 2.07 and 2.08 and
Article III of the Deposit Agreement, of the owner of the Depositary Shares
evidenced by this Receipt to surrender this Receipt with instructions to the
Depositary to deliver to the holder the Stock and all money and other property,
if any, represented thereby, except in order to comply with mandatory provisions
of applicable law.
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10. FEES, CHARGES AND EXPENSES. The Company will pay all fees, charges and
expenses of the Depositary, except for taxes (including transfer taxes, if any)
and other governmental charges and such charges as are expressly provided in the
Deposit Agreement to be at the expense of persons depositing Stock, holders of
Receipts or other persons.
11. TITLE TO RECEIPTS. It is a condition of this Receipt, and every
successive holder hereof by accepting or holding the same consents and agrees,
that title to this Receipt (and to the Depositary Shares evidenced hereby), when
properly endorsed or accompanied by a properly executed instrument of transfer,
is transferable by delivery with the same effect as in the case of a negotiable
instrument; provided, however, that the Depositary may, notwithstanding any
notice to the contrary, treat the record holder hereof at such time as the
absolute owner hereof for the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and for all other purposes.
12. DIVIDENDS AND DISTRIBUTIONS. Whenever the Depositary shall receive any
cash dividend or other cash distribution on the Stock, the Depositary shall,
subject to the provisions of the Deposit Agreement, distribute to record holders
of Receipts such amounts of such sums as are, as nearly as practicable, in
proportion to the respective numbers of Depositary Shares evidenced by the
Receipts held by such holders; provided, however, that in case the Company or
the Depositary shall be required by law to withhold and does withhold from any
cash dividend or other cash distribution in respect of the Stock an amount on
account of taxes, the amount made available for distribution or distributed in
respect of Depositary Shares shall be reduced accordingly. The Depositary shall
distribute or make available for distribution, as the case may be, only such
amount, however, as can be distributed without attributing to any owner of
Depositary Shares a fraction of one cent and any balance not so distributable
shall be held by the Depositary (without liability for interest thereon) and
shall be added to and be treated as part of the next sum received by the
Depositary for distribution to record holders of Receipts then outstanding.
13. SUBSCRIPTION RIGHTS, PREFERENCES OR PRIVILEGES. If the Company shall
at any time offer or cause to be offered to the persons in whose name Stock is
registered on the books of the Company any rights, preferences or privileges to
subscribe for or to purchase any securities or any rights, preferences or
privileges of any other nature, such rights, preferences or privileges shall in
each such instance, subject to the provisions of the Deposit Agreement, be made
available by the Depositary to the record holders of Receipts in such manner as
the Company shall instruct.
14. NOTICE OF DIVIDENDS, FIXING OF RECORD DATE. Whenever (a) any cash
dividend or other cash distribution shall become payable, or any distribution
other than cash shall be made, or any rights, preferences or privileges shall at
any time be offered, with respect to the Stock, or (b) the Depositary shall
receive notice of any meeting at which holders of Stock are entitled to vote or
of which holders of Stock are entitled to notice or of the mandatory conversion
of, or any election on the part of the Company to call for redemption of, any
shares of Stock, the Depositary shall in each such instance fix a record date
(which shall be the same date as the record date fixed by the
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<PAGE>
Company with respect to the Stock) for the determination of the holders of
Receipts (i) who shall be entitled to receive such dividend, distribution,
rights, preferences or privileges or the net proceeds of the sale thereof, or
(ii) who shall be entitled to give instructions for the exercise of voting
rights at any such meeting or of such meeting or to receive notice of such
conversion or redemption.
15. VOTING RIGHTS. Upon receipt of notice of any meeting at which the
holders of Stock are entitled to vote, the Depositary shall, as soon as
practicable thereafter, mail to the record holders of Receipts a notice, which
shall contain (a) such information as is contained in such notice of meeting,
(b) a statement that the holders of Receipts at the close of business on a
specified record date determined as provided in Paragraph 14 will be entitled,
subject to any applicable provision of law, the Certificate of Incorporation or
the Certificate of Determination, to instruct the Depositary as to the exercise
of the voting rights pertaining to the Stock represented by their respective
Depositary Shares, and (c) a brief statement as to the manner in which such
instructions may be given. Upon the written request of a holder of this Receipt
on such record date the Depositary shall endeavor insofar as practicable to vote
or cause to be voted the Stock represented by the Depositary Shares evidenced by
this Receipt in accordance with the instructions set forth in such request. The
Company hereby agrees to take all reasonable action that may be deemed necessary
by the Depositary in order to enable the Depositary to vote such Stock or cause
such Stock to be voted. In the absence of specific instructions from the holder
of this Receipt, the Depositary will abstain from voting to the extent of the
Stock represented by the Depositary Shares evidenced by this Receipt.
16. REPORTS, INSPECTION OF TRANSFER BOOKS. The Depositary shall make
available for inspection by holders of Receipts at the Corporate Office, the New
York Office and at such other places as it may from time to time deem advisable
during normal business hours any reports and communications received from the
Company that are received by the Depositary as the holder of Stock. The
Depositary shall keep books at the Corporate Office for the registration and
transfer of Receipts, which books at all reasonable times will be open for
inspection by the record holders of Receipts; provided that any such holder
requesting to exercise such right shall certify to the Depositary that such
inspection shall be for a proper purpose reasonably related to such person's
interest as an owner of Depositary Shares.
17. LIABILITY OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR
AND THE COMPANY. Neither the Depositary nor any Depositary's Agent nor the
Registrar nor the Company shall incur any liability to any holder of this
Receipt, if by reason of any provision of any present or future law or
regulation thereunder of any governmental authority or, in the case of the
Depositary, the Registrar or any Depositary's Agent, by reason of any provision
present or future, of the Certificate of Incorporation or the Certificate of
Determination or, in the case of the Company, the Depositary, the Registrar or
any Depositary's Agent, by reason of any act of God or war or other
circumstances beyond the control of the relevant party, the Depositary, any
Depositary's Agent, the Registrar or the Company shall be prevented or forbidden
from doing or performing any act or thing that the terms of the Deposit
Agreement provide shall be done or performed; nor shall the Depositary, any
Depositary's Agent, the Registrar or the Company incur any liability to any
holder of this Receipt (a) by reason of any nonperformance or delay, caused as
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<PAGE>
aforesaid, in the performance of any act or thing that the terms of the Deposit
Agreement provide shall or may be done or performed, or (b) by reason of any
exercise of, or failure to exercise, any discretion provided for in the Deposit
Agreement except, in the case of the Depositary, any Depositary's Agent or the
Registrar, if such exercise or failure to exercise discretion is caused by its
negligence or bad faith.
18. OBLIGATIONS OF THE DEPOSITARY, THE DEPOSITARY'S AGENTS, THE REGISTRAR
AND THE COMPANY. The Company assumes no obligation and shall be subject to no
liability under the Deposit Agreement or this Receipt to the holder hereof or
other persons, except to perform in good faith such obligations as are
specifically set forth and undertaken by it to perform in the Deposit Agreement.
Each of the Depositary, the Depositary's Agents and the Registrar assumes no
obligation and shall be subject to no liability under the Deposit Agreement or
this Receipt to the holder hereof or other persons, except to perform such
obligations as are specifically set forth and undertaken by it to perform in the
Deposit Agreement without negligence or bad faith.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company shall be under any obligation to appear in, prosecute or defend any
action, suit or other proceeding with respect to Stock, Depositary Shares or
Receipts or Common Stock that in its opinion may involve it in expense or
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required.
Neither the Depositary nor any Depositary's Agent nor the Registrar nor the
Company will be liable for any action or failure to act by it in reliance upon
the advice of or information from legal counsel, accountants, any person
presenting Stock for deposit, any holder of this Receipt or any other person
believed by it in good faith to be competent to give such advice or information.
19. TERMINATION OF DEPOSIT AGREEMENT. Whenever so directed by the Company,
the Depositary will terminate the Deposit Agreement by mailing notice of such
termination to the record holders of all Receipts then outstanding at least 30
days prior to the date fixed in such notice for such termination. The Depositary
may likewise terminate the Deposit Agreement if at any time 90 days shall have
expired after the Depositary shall have delivered to the Company a written
notice of its election to resign and a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.04 of the
Deposit Agreement. In either case, on a date not less than 90 days after such
notice, the Depositary shall deliver or make available for delivery to holders
of Receipts, upon surrender of the such Receipts evidencing Depositary Shares,
such number of whole or fractional shares of the Stock as are represented by the
Depositary Shares.
The Deposit Agreement shall automatically terminate after all outstanding
Depositary Shares have been redeemed or there has been a final distribution in
respect of the Stock in connection with any liquidation, dissolution or winding
up of the Company and such distribution has been distributed to the holders of
the Receipts.
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Upon the termination of the Deposit Agreement, the Company shall be
discharged from all obligations thereunder except for its obligations to the
Depositary, any Depositary's Agent and any Registrar under Sections 5.07 and
5.08 of the Deposit Agreement.
If any Receipts remain outstanding after the date of termination of the
Deposit Agreement, the Depositary thereafter shall discontinue all functions and
be discharged from all obligations as provided in the Deposit Agreement, except
as specifically provided therein.
20. GOVERNING LAW. THE DEPOSIT AGREEMENT AND THIS RECEIPT AND ALL RIGHTS
THEREUNDER AND HEREUNDER AND PROVISIONS THEREOF AND HEREOF SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, SECTIONS 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW.
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<PAGE>
FORM OF ASSIGNMENT
For value received _____________________________ hereby sell(s), assign(s)
and transfer(s) unto _________________________________________________ (Please
insert social security or other taxpayer identification number of assignee.) the
within Receipt and all rights and interests represented by the Depositary Shares
evidenced thereby, and hereby irrevocably constitutes and appoints
_______________________ attorney to transfer the same on the books of the
within-named Depositary, with full power of substitution in the premises.
Dated:______________
Signature(s) ____________________________
____________________________
____________________________
Signature Guarantee*
NOTICE: The above signatures of the holder(s) hereof must correspond with
the name as written upon the face of this Security in every particular without
alteration or enlargement or any change whatever.
* (Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Conversion Agent, which requirements include
membership or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Conversion Agent in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
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<PAGE>
[Letterhead of Maynard, Cooper & Gale, P.C.]
Exhibit 5.1
September 17, 1999
Torchmark Corporation
2001 Third Avenue South
Birmingham, AL 35233
Ladies and Gentlemen:
We have acted as special counsel to Torchmark Corporation, a Delaware
corporation (the "Company"), Torchmark Capital Trust I and Torchmark Capital
Trust II, each a statutory business trust created under the Business Trust Act
of the State of Delaware (each, a "Trust," and collectively, the "Trusts"), in
connection with the preparation of the Registration Statement on Form S-3 (the
"Registration Statement") filed by the Company and the Trusts with the
Securities and Exchange Commission (the "Commission") with respect to the
registration under the Securities Act of 1933, as amended (the "Act"), of (i)
the Company's (a) unsecured senior debt securities and senior subordinated debt
securities (collectively, the "Senior Debt Securities"), which may be issued
pursuant to an Indenture dated February 1, 1987, between the Company and the
First National Bank of Chicago as successor trustee (as amended and
supplemented, the "Senior Indenture"), and subordinated debt securities and
junior subordinated debt securities (the "Junior Debt Securities," together with
the Senior Debt Securities, the "Debt Securities"), which may be issued pursuant
to an indenture (as amended or supplemented, the "Junior Indenture," together
with the Senior Indenture, the "Indenture"), between the Company and The First
National Bank of Chicago as Trustee (the "Trustee"), (b) shares of Preferred
Stock (the "Preferred Stock"), including Preferred Stock which may be
represented by depositary shares (the "Depository Shares") evidenced by
depositary receipts (the "Receipts"), issued under deposit agreements (the
"Deposit Agreements") to be entered into by the Company in respect of the
Depositary Shares; and (c) guarantees of the Preferred Securities of the Trusts
(the "Preferred Securities Guarantee") to be issued under one or more guarantee
agreements (each, a "Guarantee Agreement") to be entered into by the Company;
and (ii) the Trusts' preferred securities (the "Preferred Securities," and
together with the Debt Securities, the Preferred Stock, the Depositary Shares
and the Preferred Securities Guarantees, the "Offered Securities") that are to
be issued by each Trust pursuant to its respective Amended and Restated
Declaration of Trust (each, an "Amended Declaration").
This opinion is being furnished in accordance with the requirements of Item
601(b)(5) of Regulation S-K under the Act.
In connection with this opinion, we have examined originals or copies,
certified or otherwise identified to our satisfaction, of (i) the Registration
Statement; (ii) the Senior Indenture; (iii) the form of the Junior Indenture
filed as an exhibit to the Registration Statement; (iv) the form of the
Guarantee Agreement filed as an exhibit to the Registration Statement; (v) the
form of Deposit
<PAGE>
2
Agreement filed as an exhibit to the Registration Statement; (vi) the Restated
Certificate of Incorporation, as amended (the "Certificate of Incorporation")
and the Bylaws (the "Bylaws") of the Company as currently in effect; (vii) the
Certificate of Trust of each of the Trusts filed with the Secretary of State of
the State of Delaware; (viii) the Declaration of Trust of each of the Trusts
dated as of July 21, 1999 (the "Declaration of Trust"); (ix) the form of the
Amended Declaration of the Trusts filed as an exhibit to the Registration
Statement; and (x) certain resolutions of the Board of Directors of the Company
relating to the transactions contemplated by the Registration Statement, the
Trusts and related matters (the "Board Resolutions"). We have also examined
originals or copies, certified or otherwise identified to our satisfaction, of
such other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the Company and the
Trusts, we have assumed that such parties had the power, corporate or other, to
enter into and perform all obligations thereunder and have also assumed the due
authorization by all requisite action, corporate or other, and execution and
delivery by such parties of such documents and the validity and binding effect
thereof on such parties.
As to any facts material to the opinions expressed herein that we have not
independently established or verified, we have relied upon oral or written
statements and representations of officers and other representatives of the
Company, each of the Trusts and others.
We do not express any opinion as to the laws of any jurisdiction other than
the laws of the State of Alabama, the Delaware General Corporation Law (the
"DGCL") and the federal laws of the United States of America.
Based upon and subject to the limitations, qualifications, exceptions and
assumptions set forth herein, we are of the opinion that;
1. With respect to any series of Debt Securities (the "Offered Debt
Securities"), when (i) the Indenture has been duly authorized, executed and
delivered by the Trustee, as qualified to act under the Trust Indenture Act of
1939; (ii) the authorized officers of the Company have taken all necessary
corporate action to fix and determine the terms of the Offered Debt Securities
in accordance with the Board Resolutions; (iii) the terms of the Offered Debt
Securities and of their issuance and sale have been duly established in
conformity with the Indenture so as not to violate any applicable law, the
Certificate of Incorporation or Bylaws, or result in a default under or breach
of any agreement or instrument binding upon the Company, and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Company; (iv) the Indenture has been duly executed
and delivered by the Company; and (v) the Offered Debt Securities have been duly
executed and authenticated in accordance with the terms of the Indenture
<PAGE>
3
and duly delivered to the purchasers thereof upon payment of the agreed-upon
consideration therefor, the issuance and sale of the Offered Debt Securities
(including any Offered Debt Securities duly issued upon exchange or conversion
of any shares of Preferred Stock that are exchangeable or convertible into Debt
Securities) will have been duly authorized, and the Offered Debt Securities will
be valid and binding obligations of the Company entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms,
except to the extent that (x) enforcement thereof may be limited by (1)
bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or
similar laws now or hereinafter in effect relating to or affecting the
enforcement of creditors' rights generally, (2) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or in
equity), (3) requirements that a claim with respect to any Offered Debt
Securities denominated other than in United States dollars (or a judgment
denominated other than in United States dollars in respect of such claim) be
converted into United States dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law and (4) governmental authority to limit,
delay or prohibit the making of payments outside the United States or in foreign
currency or composite currency and (y) any waiver with respect to usury laws.
2. With respect to the shares of any series of Preferred Stock (the
"Offered Preferred Stock"), when (i) the Board of Directors of the Company or an
authorized committee thereof has taken all necessary corporate action to fix and
determine the terms of the Offered Preferred Stock in accordance with the Board
Resolutions, including the adoption of a Certificate of Determination for such
Preferred Stock and a form of certificate representing such series of Preferred
Stock, each in the form required by applicable law; (ii) such Certificate of
Determination has been duly filed with the Secretary of State of the State of
Delaware; (iii) certificates representing the shares of the Offered Preferred
Stock have been manually signed by an authorized officer of the transfer agent
and registrar for the Offered Preferred Stock and registered by such transfer
agent and registrar, and delivered to the purchasers thereof; and (iv) the
Company receives consideration per share for the Offered Preferred Stock in such
amount as may be determined by the Board of Directors of the Company, or an
authorized committee thereof, in a form legally valid under the DGCL, the
issuance and sale of the shares of Offered Preferred Stock will have been duly
authorized, and such shares will be validly issued, fully paid and
nonassessable.
3. With respect to Depositary Shares representing fractional interests in
any series of Preferred Stock, when (i) the Board of Directors of the Company or
an authorized committee thereof has taken all necessary corporate action to fix
and determine the terms of the Depositary Shares and the related series of
Preferred Stock in accordance with the Board Resolutions, including the adoption
of a Certificate of Determination for such related series of Preferred Stock and
a form of certificate representing such series of Preferred Stock, each in the
form required by applicable law; (ii) such Certificate of Determination has been
duly filed with the Secretary of State of the State of Delaware; (iii) the terms
of the Depositary Shares and of their issuance and sale have been duly
established in conformity with the Deposit Agreement so as not to violate any
applicable law, the Certificate of Incorporation or Bylaws or result in a
default under or breach of any agreement or instrument binding upon the Company,
and so as to comply with any requirement or restriction imposed by any court
<PAGE>
4
or governmental body having jurisdiction over the Company; (iv) the applicable
Deposit Agreement has been duly executed and delivered; (v) the related shares
of Preferred Stock have been duly authorized and validly issued in accordance
with the laws of the State of Delaware and delivered to the depositary for
deposit in accordance with the Deposit Agreement; and (vi) the Receipts
evidencing the Depositary Shares have been duly issued against deposit of the
related shares of Preferred Stock with the depositary in accordance with the
Deposit Agreement, the issuance and sale of the Depositary Shares will be
validly issued and the Receipts will entitle the holders thereof to the rights
specified therein and in the Deposit Agreement.
4. With respect to the Preferred Securities Guarantees (the "Offered
Guarantees"), when (i) the trustees of the applicable Trust have taken all
necessary action to adopt the Amended Declaration and to fix and determine the
terms of the Preferred Securities (the "Offered Preferred Securities") in
accordance with the terms of the applicable Amended Declaration; (ii) the Board
of Directors of the Company or an authorized committee thereof has taken all
necessary corporate action to fix and determine the terms of the Guarantees in
accordance with the Board Resolution; (iii) the terms of the Offered Preferred
Securities and the related Offered Guarantee and the issuance and sale thereof
have been duly established in conformity with the applicable Amended Declaration
and applicable Guarantee Agreement, respectively, so as not to violate any
applicable law, the applicable Certificate of Trust and Amended Declaration, the
Certificate of Incorporation and Bylaws, respectively, or result in a default
under or a breach of any agreement or instrument binding upon the Trust or the
Company, and so as to comply with any requirement or restriction imposed by any
court or governmental body having jurisdiction over the applicable Trust or the
Company; (iv) the applicable Guarantee Agreement has been duly executed and
delivered; (v) the Offered Preferred Securities have been duly issued and
delivered by the applicable Trust as contemplated by the Registration Statement
and the prospectus supplement relating thereto; (vi) certificates representing
the Offered Preferred Securities have been signed by an authorized officer of
the transfer agent and registrar for the Offered Preferred Securities and
registered by such transfer agent and registrar, and delivered to the purchasers
thereof; and (vii) the applicable Trust receives the agreed-upon consideration
therefor, the Offered Guarantee will be a valid and binding obligation of the
Company enforceable in accordance with its terms except to the extent that (A)
enforcement thereof may be limited by (x) bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium or similar laws now or
hereinafter in effect relating to or affecting the enforcement of creditors'
rights generally and (y) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity), and (B) the
waiver contained in Section 5.2 or 5.3 of the Guarantee Agreements may be deemed
unenforceable.
We hereby consent to the filing of this opinion with the Commission as an
exhibit to the Registration Statement. We also consent to the reference to our
firm under the caption "Legal Matters" in the Registration Statement. In giving
this consent, we do not thereby admit that we are
<PAGE>
5
included in the category of persons whose consent is required under Section 7 of
the Act or the rules and regulations of the Commission.
Very truly yours,
/s/ Maynard, Cooper & Gale, P.C.
Maynard, Cooper & Gale, P.C.
<PAGE>
[Letterhead of Morris, Nichols, Arsht & Tunnell]
Exhibit 5.2
September 17, 1999
The Torchmark Capital Trusts
(as defined below)
c/o Torchmark Corporation
2001 Third Avenue South
Birmingham, Alabama 35233
Re: The Torchmark Capital Trusts
----------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Torchmark Capital Trust
I, a Delaware statutory business trust ("Torchmark Capital Trust I"), and
Torchmark Capital Trust II, a Delaware statutory business trust ("Torchmark
Capital Trust II" and, collectively with Torchmark Capital Trust I, the
"Torchmark Capital Trusts"), in connection with certain matters of Delaware law
relating to the formation of the Torchmark Capital Trusts and the proposed
issuance of Preferred Securities thereof to beneficial owners pursuant to and as
described in the Registration Statement (and the prospectus forming a part
thereof) on Form S-3 filed with the Securities and Exchange Commission by
Torchmark Corporation, a Delaware corporation (the "Company"), on July 21, 1999,
as amended by Pre-Effective Amendment No. 1 thereto (as amended, the
"Registration Statement"). Capitalized terms used herein and not otherwise
herein defined are used as defined in the form of Amended and Restated
Declaration of Trust of the Torchmark Capital Trusts attached as an exhibit to
the Registration Statement (the "Form Governing Instrument").
In rendering this opinion, we have examined copies of the following
documents in the forms provided to us: the Certificate of Trust of Torchmark
Capital Trust I as filed in the Office of the Secretary of State of the State of
Delaware (the "State Office") on July 21, 1999 (the "Torchmark Capital Trust I
Certificate"); the Declaration of Trust of Torchmark Capital Trust I dated as of
July 21, 1999 (the "Torchmark Capital Trust I Original Governing Instrument");
the Certificate of Trust of Torchmark Capital Trust II as filed in the State
Office on July 21, 1999 (collectively with the Torchmark Capital Trust I
Certificate, the "Certificates"); the Declaration of Trust of Torchmark
<PAGE>
The Torchmark Capital Trusts
September __, 1999
Page 2
Capital Trust II dated as of July 21, 1999 (collectively with the Torchmark
Capital Trust I Original Governing Instrument, the "Original Governing
Instruments"); the Form Governing Instrument; the form of Junior Subordinated
Indenture to be entered into between the Company and The First National Bank of
Chicago, as trustee; the form of Preferred Securities Guarantee Agreement to be
entered into by and between the Company and The First National Bank of Chicago,
as trustee, with respect to each Torchmark Capital Trust (each, a "Guarantee");
the Registration Statement; and a certification of good standing of each
Torchmark Capital Trust obtained as of a recent date from the State Office. In
such examinations, we have assumed the genuineness of all signatures, the
conformity to original documents of all documents submitted to us as drafts or
copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity that is a party to any of the documents
reviewed by us under the laws of the jurisdiction of its respective formation or
organization; (ii) the due authorization, execution and delivery by, or on
behalf of, each of the parties thereto of the above-referenced documents with
respect to each Torchmark Capital Trust; (iii) that the Company, The First
National Bank of Chicago, and Bank One Delaware, Inc. will duly authorize,
execute and deliver an amended and restated declaration of trust in the form of
the Form Governing Instrument (each, a "Governing Instrument") and all other
documents contemplated thereby or by the Registration Statement to be executed
in connection with the formation of each Torchmark Capital Trust and the
issuance by each Torchmark Capital Trust of Preferred Securities, in each case
prior to the first issuance of Preferred Securities of such Torchmark Capital
Trust; (iv) that the Preferred Securities of each Torchmark Capital Trust will
be offered and sold pursuant to the prospectus forming a part of the
Registration Statement and a prospectus supplement thereto (collectively, the
"Prospectus") that will be consistent with, and accurately describe, the terms
of the applicable Governing Instrument and the applicable Guarantee relating to
each such Torchmark Capital Trust and all other relevant documents; (v) that no
event has occurred subsequent to the filing of any Certificate, or will occur
prior to the issuance of all Preferred Securities by each Torchmark Capital
Trust, that would cause a dissolution or liquidation of any Torchmark Capital
Trust under the applicable Original Governing Instrument or the applicable
Governing Instrument; (vi) that the activities of each Torchmark Capital Trust
have been and will be conducted in accordance with its Original Governing
Instrument or Governing Instrument, as applicable, and the Delaware Business
Trust Act, 12 DEL. C. (S)(S) 3801 ET SEQ. (the "Delaware Act"); (vii) that prior
to the first issuance of Preferred Securities by each Torchmark Capital Trust,
payment of the required consideration therefor will have been made in accordance
with the terms and conditions of the applicable Governing Instrument and as
described in the Prospectus, and that the Preferred Securities of each Torchmark
Capital Trust are otherwise issued and sold in accordance with the terms,
conditions, requirements and procedures set forth in the Governing Instrument of
such Torchmark Capital Trust and as described in the Prospectus; and (viii) that
the documents examined by us, or contemplated hereby, express the entire
understanding of the parties thereto with respect to the subject matter thereof
and have not been, and, prior to the issuance of all Preferred Securities by
each Torchmark Capital Trust, will not be, amended,
<PAGE>
The Torchmark Capital Trusts
September __, 1999
Page 3
supplemented or otherwise modified, except as herein referenced. No opinion is
expressed with respect to the requirements of, or compliance with, federal or
state securities or blue sky laws. We express no opinion as to, and assume no
responsibility for, the Registration Statement or any other offering materials
relating to the Preferred Securities offered by any Torchmark Capital Trust. As
to any fact material to our opinion, other than those assumed, we have relied
without independent investigation on the above-referenced documents and on the
accuracy, as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each of the Torchmark Capital Trusts is a duly formed and validly
existing business trust in good standing under the laws of the State of
Delaware.
2. The Preferred Securities of each Torchmark Capital Trust, upon
issuance, will constitute validly issued and, subject to the qualifications set
forth in paragraph 3 below, fully paid and nonassessable beneficial interests in
the assets of such Torchmark Capital Trust.
3. Under the Delaware Act and the terms of the applicable Governing
Instrument, the Holders of Preferred Securities of each Torchmark Capital Trust,
in such capacity, will be entitled to the same limitation of personal liability
as that extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware; provided, however,
we express no opinion with respect to the liability of any Holder of Preferred
Securities who is, was or may become a named Trustee of the Trust.
Notwithstanding the foregoing, we note that pursuant to Section 11.4 of the
applicable Governing Instrument, each Torchmark Capital Trust may withhold
amounts otherwise distributable to a Holder of Preferred Securities and pay over
such amounts to the applicable jurisdictions in accordance with federal, state
and local law and any amount withheld will be deemed to have been distributed to
such Holder and that, pursuant to the applicable Governing Instrument, Holders
of Preferred Securities of each Torchmark Capital Trust may be obligated to make
payments or provide indemnity or security under the circumstances set forth
therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and reference to our opinion
under the heading "LEGAL OPINIONS" in the prospectus forming a part thereof. In
giving this consent, 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. This opinion speaks only as of the date hereof and is
based on our understandings and assumptions as to present facts, and on our
review of the above-referenced documents and the application of Delaware law as
the same exist as of the date hereof, and we undertake no obligation to update
or supplement this opinion after the date hereof for the benefit of
<PAGE>
The Torchmark Capital Trusts
September __, 1999
Page 4
any person or entity with respect to any facts or circumstances that may
hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the addressees hereof in connection with the matters contemplated hereby and
may not be relied on by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 12.1
COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES
3 months
1994 1995 1996 1997 1998 1999
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Earnings:
Pre-tax earnings 313,691 339,322 387,492 391,999 446,991 129,681
Fixed charges
and MIPS dividends 81,244 99,687 91,056 89,843 74,753 16,456
Less: interest capitalized
included above (1,299) (1,596) (1,361) (1,663) (2,437) (120)
-------- -------- -------- -------- -------- --------
Earnings before fixed charges 393,636 437,413 477,187 480,179 519,307 146,017
======== ======== ======== ======== ======== ========
Fixed charges and MIPS dividends:
Interest expense 75,922 80,994 73,611 71,863 56,325 12,576
Capitalized interest 1,299 1,596 1,361 1,663 2,437 120
Adjusted MIPS dividends 3,192 16,159 15,036 15,265 14,933 3,466
Estimated interest factor of
rental expense 831 938 1,048 1,052 1,058 294
-------- -------- -------- -------- -------- --------
Total fixed charges 81,244 99,687 91,056 89,843 74,753 16,456
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges
and MIPS dividends 4.8 4.4 5.2 5.3 6.9 8.9
======== ======== ======== ======== ======== ========
Earnings before fixed charges 393,636 437,413 477,187 480,179 519,307 146,017
Interest credited for deposit
products 65,243 88,066 94,900 98,563 86,561 22,533
-------- -------- -------- -------- -------- --------
Adjusted earnings before fixed charges 458,879 525,479 572,087 578,742 605,868 168,550
======== ======== ======== ======== ======== ========
Fixed charges 81,244 99,687 91,056 89,843 74,753 16,456
Interest credited for deposit products 65,243 88,066 94,900 98,563 86,561 22,533
-------- -------- -------- -------- -------- --------
Adjusted fixed charges 146,487 187,753 185,956 188,406 161,314 38,989
======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges
and MIPS dividends
including interest credited on deposit
products as a fixed charge 3.1 2.8 3.1 3.1 3.8 4.3
======== ======== ======== ======== ======== ========
Rental expense 2,520 2,843 3,177 3,189 3,206 890
Estimated interest factor
of rental expense (33%) 831 938 1,048 1,052 1,058 294
Interest credited on deposit products 65,243 88,066 94,900 98,563 86,561 22,533
MIPS dividends 2,137 10,317 9,655 9,875 9,777 2,289
Tax rate 33.0% 36.2% 35.8% 35.3% 34.5% 34.0%
Adjusted (pretax) MIPS dividends 3,192 16,159 15,036 15,265 14,933 3,466
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Torchmark Corporation:
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
KPMG Peat Marwick LLP
Birmingham, Alabama
September 17, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ David L. Boren
------------------------------------
David L. Boren
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Joseph M. Farley
------------------------------------
Joseph M. Farley
Director
Date: July 16, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Louis T. Hagopian
------------------------------------
Louis T. Hagopian
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Joseph L. Lanier, Jr.
------------------------------------
Joseph L. Lanier, Jr.
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Mark S. McAndrew
------------------------------------
Mark S. McAndrew
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Harold T. McCormick
------------------------------------
Harold T. McCormick
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ George J. Records
------------------------------------
George J. Records
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned director of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M. Hutchison
and Carol A. McCoy, and each of them severally, his true and lawful attorneys-
in-fact for him and in his name, place and stead, in any and all capacities, to
sign the Form S-3 Registration Statement for preferred stock, depository shares,
and debt securities of the Company and trust preferred securities guaranteed by
the Company and any and all amendments and post-effective amendments thereto,
and to file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ R. K. Richey
------------------------------------
R. K. Richey
Director
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned officer and director of Torchmark Corporation (the
"Company") constitutes and appoints Michael J. Klyce, Gary L. Coleman, Larry M.
Hutchison and Carol A. McCoy, and each of them severally, his true and lawful
attorneys-in-fact for him and in his name, place and stead, in any and all
capacities, to sign the Form S-3 Registration Statement for preferred stock,
depository shares, and debt securities of the Company and trust preferred
securities guaranteed by the Company and any and all amendments and post-
effective amendments thereto, and to file the same with all exhibits thereto and
other documents required 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 as fully to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all said attorneys-
in-fact and agents or any of them or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ C.B. Hudson
------------------------------------
C.B. Hudson
Chairman, President and Chief
Executive Officer and Director
(Principal Financial Officer)
Date: July 21, 1999
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT:
The undersigned officer of Torchmark Corporation (the "Company")
constitutes and appoints Michael J. Klyce, Larry M. Hutchison and Carol A.
McCoy, and each of them severally, his true and lawful attorneys-in-fact for him
and in his name, place and stead, in any and all capacities, to sign the Form S-
3 Registration Statement for preferred stock, depository shares, and debt
securities of the Company and trust preferred securities guaranteed by the
Company and any and all amendments and post-effective amendments thereto, and to
file the same with all exhibits thereto and other documents required 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
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all said attorneys-in-fact and agents or any of them or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have signed this Power of Attorney in the capacity
and on the date indicated below.
/s/ Gary L. Coleman
------------------------------------
Gary L. Coleman
Vice President and Chief
Accounting Officer
Date: July 21, 1999
<PAGE>
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)
--------------------
TORCHMARK CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 63-0780404
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2001 Third Avenue South
Birmingham, Alabama 35233
(Address of principal executive offices) (Zip Code)
Debt Securities
Guarantee of Preferred Securities of
Torchmark Capital Trust I and Torchmark Capital Trust II
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
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.
<PAGE>
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 12th day of July, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
----------------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 12, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture by and between Torchmark
Corporation and The First National Bank of Chicago, as Trustee, 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/ Sandra L. Caruba
---------------------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
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 in thousands C400
------
RCFD BIL MIL THOU
---- ----------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1)........... 0081 3,809,517
1.a
b. Interest-bearing balances(2).................................... 0071 4,072,166
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 12,885,728
2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,684,756
3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)............................................................ 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)............................. 2125 33,889,446
4.d
5. Trading assets (from Schedule RD-D)................................. 3545 5,100,499
5.
6. Premises and fixed assets (including capitalized leases)............ 2145 754,052
6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 5,244
7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 201,068
8.
9. Customers' liability to this bank on acceptances outstanding........ 2155 265,041
9.
10. Intangible assets (from Schedule RC-M).............................. 2143 285,709 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................ 2170 68,940,410 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Schedule RC-Continued
Dollar Amounts in
Thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).......................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1)........................... 6631 9,740,100 13.a1
(2) Interest-bearing................................. 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, ----
and IBFs (from Schedule RC-E, part II).............. 2200 19,273,426 13.b
(1) Noninterest bearing............................. 6631 334,741 13.b1
(2) Interest-bearing................................ 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under
agreements to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury............ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)............ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.......... 2332 7,453,761 16.a
b. With original maturity of more than one year....... A547 330,300 16.b
c. With original maturity of more than three years.... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and
outstanding............................................ 2920 265,041 18.
19. Subordinated notes and debentures...................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)................. 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)......... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......... 3838 0 23.
24. Common stock........................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock)................................................. 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.............. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-
for-sale securities................................ 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow
hedges............................................ 4336 0 26.c
27. Cumulative foreign currency translation adjustments... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)..... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).......... 3300 68,940,410 29.
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 comprehensive
that best describes the most level of auditing work performed for Number
the bank by independent external auditors as of any date during 1996....RCFD 6724 .... M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by
with generally accepted auditing standards by a certified other external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
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)
--------------------
TORCHMARK CAPITAL TRUST II
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2001 Third Avenue South
Birmingham, Alabama 35233
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
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.
<PAGE>
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 12th day of July, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
----------------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 12, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture by and between Torchmark
Corporation and The First National Bank of Chicago, as Trustee, 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/ Sandra L. Caruba
---------------------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
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 in thousands C400
------
RCFD BIL MIL THOU
---- ----------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1)........... 0081 3,809,517
1.a
b. Interest-bearing balances(2).................................... 0071 4,072,166
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 12,885,728
2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,684,756
3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)............................................................ 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)............................. 2125 33,889,446
4.d
5. Trading assets (from Schedule RD-D)................................. 3545 5,100,499
5.
6. Premises and fixed assets (including capitalized leases)............ 2145 754,052
6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 5,244
7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 201,068
8.
9. Customers' liability to this bank on acceptances outstanding........ 2155 265,041
9.
10. Intangible assets (from Schedule RC-M).............................. 2143 285,709 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................ 2170 68,940,410 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Schedule RC-Continued
Dollar Amounts in
Thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).......................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1)........................... 6631 9,740,100 13.a1
(2) Interest-bearing................................. 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, ----
and IBFs (from Schedule RC-E, part II).............. 2200 19,273,426 13.b
(1) Noninterest bearing............................. 6631 334,741 13.b1
(2) Interest-bearing................................ 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under
agreements to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury............ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)............ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.......... 2332 7,453,761 16.a
b. With original maturity of more than one year....... A547 330,300 16.b
c. With original maturity of more than three years.... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and
outstanding............................................ 2920 265,041 18.
19. Subordinated notes and debentures...................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)................. 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)......... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......... 3838 0 23.
24. Common stock........................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock)................................................. 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.............. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-
for-sale securities................................ 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow
hedges............................................ 4336 0 26.c
27. Cumulative foreign currency translation adjustments... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)..... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).......... 3300 68,940,410 29.
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 comprehensive
that best describes the most level of auditing work performed for Number
the bank by independent external auditors as of any date during 1996....RCFD 6724 .... M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by
with generally accepted auditing standards by a certified other external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
<PAGE>
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)
--------------------
TORCHMARK CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware To be applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
2001 Third Avenue South
Birmingham, Alabama 35233
(Address of principal executive offices) (Zip Code)
Preferred Securities
(Title of Indenture Securities)
<PAGE>
Item 1. General Information. Furnish the following
--------------------
information as to the trustee:
(a) Name and address of each examining or
supervising authority to which it is subject.
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.
<PAGE>
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 12th day of July, 1999.
The First National Bank of Chicago,
Trustee
By /s/ Sandra L. Caruba
----------------------------------
Sandra L. Caruba
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc., filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
July 12, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Ladies and Gentlemen:
In connection with the qualification of the Indenture by and between Torchmark
Corporation and The First National Bank of Chicago, as Trustee, 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/ Sandra L. Caruba
---------------------------------
Sandra L. Caruba
Vice President
<PAGE>
EXHIBIT 7
<TABLE>
<CAPTION>
<S> <C> <C>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
</TABLE>
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for March 31, 1999
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 in thousands C400
------
RCFD BIL MIL THOU
---- ----------------
<S> <C> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
----
a. Noninterest-bearing balances and currency and coin(1)........... 0081 3,809,517
1.a
b. Interest-bearing balances(2).................................... 0071 4,072,166
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 12,885,728
2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................. 1350 4,684,756
3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)............................................................ 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses........................ 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................ 3128 3,884 4.c
RCFD
d. Loans and leases, net of unearned income, allowance, and ----
reserve (item 4.a minus 4.b and 4.c)............................. 2125 33,889,446
4.d
5. Trading assets (from Schedule RD-D)................................. 3545 5,100,499
5.
6. Premises and fixed assets (including capitalized leases)............ 2145 754,052
6.
7. Other real estate owned (from Schedule RC-M)........................ 2150 5,244
7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)...................................... 2130 201,068
8.
9. Customers' liability to this bank on acceptances outstanding........ 2155 265,041
9.
10. Intangible assets (from Schedule RC-M).............................. 2143 285,709 10.
11. Other assets (from Schedule RC-F)................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................ 2170 68,940,410 12.
- ------------------
</TABLE>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
<PAGE>
<TABLE>
<CAPTION>
Legal Title of Bank: The First National Bank of Chicago Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
Schedule RC-Continued
Dollar Amounts in
Thousands
-----------------
<S> <C> <C> <C>
LIABILITIES
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).......................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1)........................... 6631 9,740,100 13.a1
(2) Interest-bearing................................. 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, ----
and IBFs (from Schedule RC-E, part II).............. 2200 19,273,426 13.b
(1) Noninterest bearing............................. 6631 334,741 13.b1
(2) Interest-bearing................................ 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under
agreements to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury............ RCON 2840 173,505 15.a
b. Trading Liabilities (from Schedule RC-D)............ RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less.......... 2332 7,453,761 16.a
b. With original maturity of more than one year....... A547 330,300 16.b
c. With original maturity of more than three years.... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and
outstanding............................................ 2920 265,041 18.
19. Subordinated notes and debentures...................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)................. 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)......... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus.......... 3838 0 23.
24. Common stock........................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock)................................................. 3839 3,239,836 25.
26. a. Undivided profits and capital reserves.............. 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-
for-sale securities................................ 8434 (37,357) 26.b
c. Accumulated net gains (losses) on cash flow
hedges............................................ 4336 0 26.c
27. Cumulative foreign currency translation adjustments... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)..... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and
equity capital (sum of items 21, 22, and 28).......... 3300 68,940,410 29.
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 comprehensive
that best describes the most level of auditing work performed for Number
the bank by independent external auditors as of any date during 1996....RCFD 6724 .... M.1.
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by
with generally accepted auditing standards by a certified other external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
- -------------------
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
