<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 26, 1997
REGISTRATION STATEMENT NO. 333-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------
CMMUNITYOTRUST BANCORP, INC. KENTUCKY 61-0979818
CTBI PREFERRED CAPITAL DELAWARE 31-1512911
TRUST (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
(EXACT NAME OFREGISTRANT AS SPECIFIED IN ITS CHARTER)
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
P.O. BOX 2947
208 NORTH MAYO TRAIL
PIKEVILLE, KENTUCKY 41501
(606) 432-1414
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------
BURLIN COLEMAN COPY TO: COPY TO:
208 NORTH MAYO TRAIL NICHOLAS R. GLANCY, ESQ. STEPHEN M. WISEMAN,
PIKEVILLE, KENTUCKY 41501 ESQ.
GREENEBAUM DOLL & MCDONALD PLLC
(606) 432-1414 1400 VINE CENTER TOWER KING & SPALDING
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE 120 WEST 45TH STREET
LEXINGTON, KENTUCKY
NUMBER, INCLUDING AREA 40507 NEW YORK, NY 10036-
CODE, OF AGENT FOR (606) 231-8500 4003
SERVICE) (212) 556-2100
------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes 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 offered only in connection with dividend or
interest reinvestment plans, check the following box. [_]
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. [_]
CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
PROPOSED
MAXIMUM PROPOSED
AMOUNT AGGREGATE MAXIMUM AMOUNT OF
TO BE PRICE AGGREGATE REGISTRATION
TITLE OF SECURITIES TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE (2)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CTBI Preferred Capital Trust Preferred
Securities (1)................................. 1,380,000 $25.00 $34,500,000 $10,454.55
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Community Trust Bancorp, Inc. Guarantee (2)(3).. (2) -- -- --
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Community Trust Bancorp, Inc. Subordinated
Debentures (2)(3).............................. (2) -- -- --
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</TABLE>
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(1) Includes 180,000 shares of Preferred Securities which may be issued by
CTBI Preferred Capital Trust to cover underwriters' over-allotments.
(2) The Subordinated Debentures will be purchased by CTBI Preferred Capital
Trust with the proceeds of the sale of the Preferred Securities. No
separate consideration will be received for the issuance of the
Subordinated Debentures or the Guarantee. In accordance with Rule 457 no
separate fee is payable for the Community Trust Bancorp, Inc. Subordinated
Debentures or Guarantee.
(3) This Registration Statement is deemed to cover the Subordinated Debentures
and the Guarantee.
------------
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 THIS REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SECTION 8(A) MAY DETERMINE.
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- -------------------------------------------------------------------------------
<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED MARCH 26, 1997
PROSPECTUS
1,200,000 PREFERRED SECURITIES
CTBI PREFERRED CAPITAL TRUST
% CUMULATIVE TRUST PREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
LOGO
---------
The % Cumulative Trust Preferred Securities ("Preferred Securities")
offered hereby represent preferred undivided beneficial interests in CTBI
Preferred Capital Trust, a trust created under the laws of the State of
Delaware ("CTBI Trust"). Community Trust Bancorp, Inc., a Kentucky corporation
("Company"), will own all of the beneficial interests represented by common
securities of CTBI Trust ("Common Securities"). State Street Bank and Trust
Company is the Property Trustee of CTBI Trust. CTBI Trust exists for the sole
purpose of issuing the Preferred Securities and Common Securities and investing
the proceeds thereof in an equivalent amount of % Subordinated Debentures
("Subordinated Debentures") to be issued by the Company.
(Continued on Next Page)
SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR CERTAIN INFORMATION RELEVANT TO AN
INVESTMENT IN THE PREFERRED SECURITIES, INCLUDING THE PERIOD AND CIRCUMSTANCES
DURING AND UNDER WHICH PAYMENTS OF DISTRIBUTIONS ON THE PREFERRED SECURITIES
MAY BE DEFERRED AND THE RELATED UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
OF SUCH DEFERRAL.
---------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, OR ANY STATE SECURITY COMMISSION, NOR HAS THE SECURITIES
EXCHANGE COMMISSION, OR ANY STATE SECURITY COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
---------
THESE SECURITIES OFFERED HEREBY ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND
ARE NOT INSURED BY THE FEDERAL GOVERNMENT OR ANY OTHER GOVERNMENTAL
AGENCY OR INSTRUMENTALITY.
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- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNDERWRITING
DISCOUNTS
PRICE TO AND COMMISSIONS PROCEEDS TO
THE PUBLIC (1)(2)(3) TRUST (1)(2)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Preferred Security................ $25.00 (2) $25.00
- --------------------------------------------------------------------------------
Total (4)............................. $30,000,000 (2) $30,000,000
</TABLE>
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- --------------------------------------------------------------------------------
(1) The Company and CTBI Trust have agreed to indemnify the Underwriters
against certain liabilities, including liabilities under the Securities Act
of 1933, as amended. See "Underwriting."
(2) Because the proceeds of the sale of the Preferred Securities will be
invested in the Subordinated Debentures, the Company has agreed to pay the
Underwriters, as compensation (the "Underwriters' Compensation") for
arranging the investment therein of such proceeds, $ per Preferred
Security (or, in the aggregate, $ ). See "Underwriting."
(3) Expenses of the offering to be paid by the Company are estimated to be
approximately $175,000.
(4) CTBI Trust has granted the underwriters an option for 30 days to purchase
up to an additional 180,000 shares of Preferred Securities on the same
terms set forth above solely to cover over-allotments, if any. If such
option is exercised in full, the total Price to the Public and Proceeds to
CTBI Trust will be $34,500,000 and the aggregate underwriters compensation
will be $ . See "Underwriting."
---------
The Preferred Securities offered hereby are offered severally by the
Underwriters, as specified herein, subject to receipt and acceptance by them
and subject to their right to reject any order in whole or in part. It is
expected that the Preferred Securities will be ready for delivery in book-entry
form only through the facilities of The Depository Trust Company on or about
, 1997, against payment therefor in immediately-available funds.
---------
MORGAN KEEGAN & COMPANY, INC. J.J.B. HILLIARD, W.L. LYONS, INC.
, 1997
<PAGE>
(continued from previous page)
The Subordinated Debentures will mature on March 31, 2027, which date may be
(1) shortened to a date not earlier than March 31, 2007, or (2) extended to a
date not later than March 31, 2036, in each case if certain conditions are met
(including, in the case of shortening the Stated Maturity (as defined herein),
the Company having received prior approval of the Board of Governors of the
Federal Reserve System ("Federal Reserve") to do so if then required under
applicable capital guidelines or policies of the Federal Reserve). The
Subordinated Debentures will be the unsecured obligations of the Company and
will be subordinate and junior in right of payment to Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations of the Company, as described herein. See "Description of the
Subordinated Debentures--Subordination" in this Prospectus.
The Preferred Securities will have a preference under certain circumstances
with respect to cash distributions and amounts payable on liquidation,
redemption or otherwise over the Common Securities. See "Description of the
Preferred Securities--Subordination of Common Securities." Holders of
Preferred Securities will be entitled to receive preferential cumulative cash
distributions ("Distributions") accruing from the date of original issuance
and payable quarterly in arrears on the last day of March, June, September and
December of each year (each, a "Distribution Date"), commencing on June 30,
1997, at the annual rate of % ("Securities Rate") of the Liquidation Amount
of $25 per Preferred Security. The Company has the right to defer payment of
interest on the Subordinated Debentures at any time or from time to time for a
period not to exceed 20 consecutive quarters with respect to each deferral
period (each, an "Extension Period"), provided that no Extension Period may
extend beyond the Stated Maturity of the Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period subject to the
requirements set forth herein. If interest payments on the Subordinated
Debentures are so deferred, Distributions on the Preferred Securities will
also be deferred, and the Company will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash distributions with
respect to its capital stock or debt securities that rank pari passu with or
junior to the Subordinated Debentures. DURING AN EXTENSION PERIOD, INTEREST ON
THE SUBORDINATED DEBENTURES WILL CONTINUE TO ACCRUE (AND THE AMOUNT OF
DISTRIBUTIONS TO WHICH HOLDERS OF THE PREFERRED SECURITIES ARE ENTITLED WILL
ACCUMULATE) AT THE RATE OF % PER ANNUM, COMPOUNDED QUARTERLY, AND HOLDERS
OF THE PREFERRED SECURITIES WILL BE REQUIRED TO INCLUDE INTEREST INCOME (IN
THE FORM OF ORIGINAL ISSUE DISCOUNT) IN THEIR GROSS INCOME FOR UNITED STATES
FEDERAL INCOME TAX PURPOSES IN ADVANCE OF RECEIPT OF THE CASH DISTRIBUTIONS
WITH RESPECT TO SUCH DEFERRED INTEREST PAYMENTS. See "Description of
Subordinated Debentures--Option to Extend Interest Payment Period" and
"Certain Federal Income Tax Consequences--Potential Extension of Interest
Payment Period and Original Issue Discount."
The Company has, through the Guarantee, CTBI Trust Agreement, Subordinated
Debentures, Indenture and other documents (each as defined herein), taken
together, fully, irrevocably and unconditionally guaranteed, on a subordinated
basis, all of CTBI Trust's obligations under the Preferred Securities. See
"Relationship Among the Preferred Securities, the Subordinated Debentures and
the Guarantee--Full and Unconditional Guarantee." The Guarantee of the Company
guarantees the payments of Distributions and payments on liquidation or
redemption of the Preferred Securities, but only in each case to the extent of
funds held by CTBI Trust, as described herein. See "Description of Guarantee."
If the Company does not make interest payments on the Subordinated Debentures
held by CTBI Trust, CTBI Trust will have insufficient funds to pay
Distributions on the Preferred Securities. The Guarantee does not cover
payments of Distributions when CTBI Trust does not have sufficient funds to
pay such Distributions. The obligations of the Company under the Guarantee and
the Preferred Securities are subordinate and junior in right and payment to
all Senior Debt, Subordinated Debt and, under certain circumstances,
Additional Senior Obligations. The Subordinated Debentures will be pari passu
with preferred stock issued by the Company, if any, and senior to the
Company's common stock (each as defined in "Description of Subordinated
Debentures--Subordination").
The Preferred Securities are subject to mandatory redemption, in whole or in
part, upon repayment of the Subordinated Debentures at maturity or their
earlier redemption. Subject to Federal Reserve approval, if then required, the
Subordinated Debentures are redeemable prior to maturity at the option of the
Company (1) on or
ii
<PAGE>
after March 31, 2007, in whole at any time or in part from time to time, or (2)
at any time, in whole (but not in part), upon the occurrence and during the
continuance of a Tax Event, an Investment Company Event or a Capital Event (as
described herein), in each case at a redemption price equal to the accrued and
unpaid interest on the Subordinated Debentures so redeemed to the date fixed
for redemption, plus 100% of the principal amount thereof. See "Description of
the Preferred Securities--Redemption."
The Company will have the right at any time to terminate the Preferred
Securities and cause the Subordinated Debentures to be distributed to holders
of Preferred Securities in liquidation of the CTBI Trust, subject to the
Company having received prior approval of the Federal Reserve to do so if then
required under applicable capital guidelines or policies of the Federal
Reserve. See "Description of the Preferred Securities--Redemption." The
Subordinated Debentures are unsecured and subordinated to all Senior Debt,
Subordinated Debt and, under certain circumstances, Additional Senior
Obligations.
In the event of the termination of CTBI Trust, after satisfaction of
liabilities to creditors of CTBI Trust as required by applicable law, the
holders of Preferred Securities will be entitled to receive a Liquidation
Amount of $25 per Preferred Security, plus accumulated and unpaid Distributions
thereon to the date of payment, which may be in the form of a distribution of a
like amount of Subordinated Debentures, subject to certain exceptions. See
"Description of the Preferred Securities--Liquidation Distribution Upon
Termination."
The Company and CTBI Trust have applied for quotation of the Preferred
Securities, and expect the Preferred Securities to be traded, on The Nasdaq
Stock Market's National Market within 30 days of the date of this Prospectus
under the symbol "CTBIP."
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE PREFERRED
SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON NASDAQ OR
OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT
ANY TIME.
iii
<PAGE>
[MAP OF BANK TERRITORY APPEARS HERE]
Ashland
Main Office
1544 Winchester Ave.
Ashland, KY 41101
Express Center (ATM)
344 16th Street
Ashland, KY 41101
South Ashland Branch (ATM)
2101 29th Street
Ashland, KY 41101
Westwood Branch
721 Wheatley Road
Ashland, KY 41101
Summit Branch (ATM)
7100 U.S. Route 60
Ashland, KY 41101
Ashland Town Center (ATM)
500 Winchester Ave.
Ashland, KY 41101
Russell Office
ATM location at Russell Road Supermarket
Campbellsville
Corporate Headquarters & Annex
1218 East Broadway
Campbellsville, KY 42718
Columbia Office
710 Russell Road
Columbia, KY 42728
Greensburg Office
205 South Main St.
P.O. Box 370
Greensburg, KY 42743
First Street Office (ATM)
315 E. First St.
Campbellsville, KY 42719
Somerset Office (ATM)
3809 S. Highway 27
Somerset, KY 42502
Winn Dixie #1602 (ATM)
181 South Highway 27
Somerset, KY 42502
Jamestown Office
U.S. Highway 127N
Jamestown, KY 42629
Lebanon Office (ATM)
507 W. Main St.
Lebanon, KY 40033
Additiional ATM Locations:
Wal-Mart: Berea, Corbin, Georgetown, London, Paintsville, Paris, Somerset,
Winchester
Flemingsburg
Main Office
101 N. Main Cross St.
Flemingsberg, KY 41041
South Ridge Plaza
100 Clark Street
Flemingsberg, KY 41041
By-Pass Branch (ATM)
200 Ashbrook Drive
Flemingsberg, KY 41041
Ewing Branch
Ewing, KY 41039
Lexington
Main Street Branch
155 East Main Street
Lexington, KY 40507
4
<PAGE>
Beaumont Centre Branch (ATM)
901 Beaumont Centre Parkway
Lexington, KY 40513
Winn Dixie Richmond Road
Mist Lake Plaza
Lexington, KY 40517
Winn Dixie Saron Drive
Tales Creek South Shopping Center
Lexington, KY 40515
London
London Banking Office (ATM)
1706 West Highway 192
London, KY 40741
Middlesboro
Main Office
1918 Cumberland Avenue
Middlesboro, KY 40965
West Branch
West Camberland Avenue & 38th St.
Middlesboro, KY 40965
East Branch (ATM)
1206 East Cumberland Avenue
Middlesboro, KY 40965
Pineville Branch (ATM)
US 25 East
Pineville, KY 40977
Mt. Sterling
Main Office
P.O. Box 306
Corner of High & Maysville Streets
Mt. Sterling, KY 40353
North Branch
Evans Drive
Mt. Sterling, KY 40353
Mt. Sterling Plaza - (ATM location only)
Maysville Road
Mt. Sterling, KY 40353
Wal-Mart Superstore Branch (ATM)
196 Indian Mound Drive
Mt. Sterling, KY 40353
ATM Location at Whitesburg Wal-Mart
Pikeville
Main Office (ATM)
208 North Mayo Trail
Pikeville, KY 41501-2947
Elkhorn City Branch
P.O. Box 740
Elkhorn City, KY 41522
Knott County Branch (ATM)
Main Street
Hindman, KY 41822
Floyd County Branch (ATM)
P.O. Box 636
Prestonsburg, KY 41653
Main Street Branch
317-319 Main Street
Pikeville, KY 41501
Marrowbone Branch
P.O. Box 89
Regina, KY 41599
Mouthcard Branch
P.O. Box 39
Mouthcard, KY 41540
Phelps Branch
P.O. Box 86
Phelps, KY 41553
Town and Country Branch
Town and Country Shopping Center
Pikeville, KY 41501
Tug Valley Branch (ATM)
South Williamson, KY 25661
606-237-6051
Virgie Branch
Virgie, KY 41572
Weddington Plaza Branch (ATM)
4205 North Mayo Trail
Pikeville, KY 41501
Additional ATM Locations:
Pikeville Wal-Mart
Prestonsburg Wal-Mart
Pikeville Methodist Hospital
Lexington Wal-Mart
Versailles
Main Office (ATM)
101 N. Main St.
480 Lexington Road
Versailles, KY 40383
Woodford Plaza (ATM)
P.O. Box 709
Versailles, KY 40383
West Liberty:
Commercial Bank
550 Main Street
West Liberty, KY 41472
Whitesburg
Main Branch
112 W. Main
Whitesburg, KY 41858
West Whitesburg Branch (ATM)
353 Hazard Road
Whitesburg, KY 41858
Ermine Branch
782 Jenkins Road
Whitesburg, KY 41858
Isom Branch
Jeremiah, KY 41826
Neon Branch
Neon, KY 41840
Williamsburg
Main Office (ATM)
201 N. Third St.
Williamsburg, KY 40769
Cumberland Region Shopping Center (ATM)
895 Hwy 25W South
Williamsburg, KY 40769
ATM Located in Cumberland Shopping Center Wal-Mart store.
Trust Company of Kentucky
Lexington Office:
100 Vine Street-4th Floor
Lexington, KY 40507
Ashland Office:
1544 Winchester Avenue
Ashland, KY 41105
Pikeville Office:
208 North Mayo Trail
Pikeville, KY 41502
Louisville Office:
4350 Brownsboro Road-Suite 170
Louisville, KY
v
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information included elsewhere in this Prospectus. Unless otherwise indicated,
the information contained in this Prospectus assumes that the Underwriters'
over-allotment option will not be exercised.
THE COMPANY
Community Trust Bancorp, Inc. is a bank holding company and a thrift holding
company headquartered in Pikeville, Kentucky. The Company currently owns all of
the capital stock of two commercial banks, one thrift and one trust company,
serving small and mid-sized communities in eastern, central and south-central
Kentucky. As of December 31, 1996, the Company had total consolidated assets of
$1.8 billion and total consolidated deposits of $1.5 billion, making it one of
the largest independent bank holding companies headquartered in the
Commonwealth of Kentucky. Effective January 1, 1997, the Company changed its
name from Pikeville National Corporation to Community Trust Bancorp, Inc. and
changed the name of its lead bank from Pikeville National Bank & Trust Company
to Community Trust Bank, N.A. (the "Lead Bank").
Through its subsidiaries, the Company engages in a wide range of commercial
and personal banking activities, which include accepting time and demand
deposits; making secured and unsecured loans to corporations, individuals and
others; providing cash management services to corporate and individual
customers; issuing letters of credit; renting safe deposit boxes and providing
funds transfer services. The lending activities of the Banks (as defined
herein) include making commercial, construction, mortgage, personal and
consumer loans. Also available are lease financing, lines of credit, revolving
credits, term loans and other specialized loans including asset-based
financing. Various corporate subsidiaries act as trustees of personal trusts,
as executors of estates, as trustees for employee benefit trusts, as
registrars, transfer agents and paying agents for bond and stock issues and as
depositories for securities.
The Company's long-term strategy is to grow its traditional banking
activities through both acquisition and de novo expansion. The Company is
focused on the continuing growth of its indirect and commercial lending
businesses and the introduction and promotion of enhanced financial products
for both business and individual customers.
CTBI TRUST
CTBI Trust is a Delaware business trust. State Street Bank and Trust Company,
Boston, Massachusetts will serve as the trustee under the Indenture ("Debenture
Trustee"), the property trustee under the CTBI Trust Agreement ("Property
Trustee"), and the trustee under the Guarantee ("Guarantee Trustee"). Richard
M. Levy and Jean R. Hale, both executive officers of the Company, will serve as
the Administrative Trustees of CTBI Trust ("Administrative Trustees").
Wilmington Trust Company will serve as the Delaware trustee under the CTBI
Trust Agreement ("Delaware Trustee"). CTBI Trust's sole purpose will be to
issue the Common Securities and the Preferred Securities and hold the
Subordinated Debentures. The Administrative Trustees, the Property Trustee and
the Delaware Trustee are sometimes collectively referred to herein as the
"Securities Trustees."
1
<PAGE>
THE OFFERING
Securities Offered........ 1,200,000 shares of % Preferred Securities,
liquidation amount $25 per Preferred Security
("Liquidation Amount"), evidencing preferred
undivided beneficial interests in the assets of
CTBI Trust.
Offering Price............ $25 per Preferred Security.
Distribution Dates........ The last day of each of March, June, September and
December of each year, beginning June 30, 1997.
Stated Maturity........... March 31, 2027, unless extended or shortened as
provided herein.
Subordinated Debentures... CTBI Trust will invest the proceeds from the
issuance of the Preferred Securities and Common
Securities in an equivalent amount of %
subordinated debentures due March 31, 2027
("Subordinated Debentures"). The Subordinated
Debentures will be subordinate and junior in right
of payment to all current indebtedness for borrowed
money and other obligations of the Company included
in the definition of Senior Debt, Subordinated Debt
and, under certain circumstances, Additional Senior
Obligations. See "Description of the Subordinated
Debentures--Subordination."
Guarantee................. The payment of distributions of the Preferred
Securities is guaranteed by the Company under the
Guarantee, but only to the extent CTBI Trust has
funds legally and immediately available to make
such distributions. If the Company does not make
principal or interest payments of the Subordinated
Debentures, CTBI Trust will not have sufficient
funds to make distributions on the Preferred
Securities, in which event the Guarantee will not
apply to such distributions until CTBI Trust has
sufficient funds legally available therefor. The
obligations of the Company under the Guarantee will
be subordinate and junior in right of payment to
all other liabilities of the Company. The Company
has, through the Guarantee, the Indenture, the
Subordinated Debentures, the CTBI Trust Agreement
and the Agreement as to Expenses and Liabilities
("Agreement as to Expenses and Liabilities"), fully
and unconditionally guaranteed, subject to certain
subordination provisions, all of CTBI Trust's
obligations with respect to the Preferred
Securities. See "Risk Factors--Risk Factors
Relating to the Preferred Securities" and "--
Ranking of Subordinated Obligations Under the
Guarantee and the Subordinated Debentures" "Rights
Under the Guarantee" and "Description of
Guarantee."
Interest Deferral......... The Company has the right to defer payments of
interest on the Subordinated Debentures by
extending the interest payment period on the
Subordinated Debentures, at any time and from time
to time, for up to 20 consecutive quarters (each,
an "Extension Period"). The only restrictions
arising from the Company's deferral of payments of
interest are that during the Extension Period the
Company may not (subject to certain allowances) (i)
pay dividends on or redeem any of its capital stock
or (ii) pay principal or interest on any debt
securities ranking pari
2
<PAGE>
passu or subordinate to the Subordinated
Debentures. See "Description of the Preferred
Securities--Distributions--Extension Period." There
could be multiple Extension Periods of varying
lengths (none exceeding 20 consecutive calendar
quarters) throughout the term of the Subordinated
Debentures. All interest payments deferred during
an Extension Period must be paid prior to a
subsequent election by the Company to institute an
Extension Period.
If interest payments on the Subordinated Debentures
are deferred, distributions on the Preferred
Securities will also be deferred. During an
Extension Period, holders of Preferred Securities
will continue to accrue income for federal income
tax purposes in advance of the receipt of the cash
payments attributable to such deferred interest.
See "Description of the Subordinated Debentures--
Option to Extend Interest Payment Period" and
"Certain Federal Income Tax Considerations--
Potential Extension of Interest Payment Period and
Original Issue Discount" and "--Market Discount and
Acquisition Premium." Deferred interest will bear
interest, compounded quarterly, at a rate per annum
equal to the Securities Rate from the date of
deferral to the date of payment.
Redemption................ The Preferred Securities are subject to mandatory
redemption upon repayment of the Subordinated
Debentures at maturity or their earlier redemption.
The Subordinated Debentures are redeemable by the
Company (in whole or in part), from time to time on
or after March 31, 2007, or at any time in whole
upon the occurrence of a Special Event, as
described below. If a partial redemption of the
Subordinated Debentures would result in the de-
listing of the Preferred Securities, the Company
may only redeem the Subordinated Debentures in
whole. Any partial redemption of the Subordinated
Debentures will be effected by the redemption of an
equivalent amount of Trust Securities, to be
allocated pro rata between Preferred Securities and
the Common Securities unless an Event of Default
shall have occurred and be continuing as of the
applicable Redemption Date or Distribution Date.
See "Description of the Preferred Securities--
Redemption" and "--Tax Event Redemption, Investment
Company Event Redemption or Capital Event
Redemption."
Special Event............. A Special Event means a Tax Event, an Investment
Company Event or a Capital Event. A "Tax Event"
means the receipt by the Company of an opinion of
independent counsel experienced in such matters
(which may be counsel to the Company) to the effect
that, as a result of any amendment to, or change in
(including any announced prospective change), the
laws (or any regulations thereunder) of the United
States or any political subdivision or taxing
authority thereof or therein, or as a result of any
official administrative pronouncement or judicial
decision interpreting or applying such laws or
regulations, which amendment or change is effective
or which pronouncement or decision is announced on
or after the date of the issuance of the
Subordinated Debentures under the Indenture, there
is more than an insubstantial risk that (i) CTBI
Trust is, or will be within 90 days after the date
of such
3
<PAGE>
opinion, subject to United States federal income
tax with respect to income accrued or received on
the Subordinated Debentures, (ii) interest payable
by the Company on the Subordinated Debentures is
not, or within 90 days after the date of such
opinion will not be, deductible by the Company, in
whole or in part, for United States federal income
tax purposes, or (iii) CTBI Trust is, or will be
within 90 days after the date of such opinion,
subject to more than a de minimis amount of other
taxes, duties or other governmental charges. An
"Investment Company Event" means the receipt by
CTBI Trust of an opinion of independent counsel
experienced in such matters (which may be counsel
to the Company) to the effect that, as a result of
a change in law or regulation or a change in
interpretation or application of law or regulation
by any legislative body, court, governmental agency
or regulatory authority, there is more than an
insubstantial risk that CTBI 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"), which change
becomes effective on or after the date of original
issuance of the Preferred Securities. A "Capital
Event" means the receipt by CTBI Trust of an
opinion of independent counsel experienced in such
matters (which may be counsel to the Company) that
the Company cannot, or within 90 days after the
date of such opinion of counsel, will not be
permitted by the applicable regulatory authorities,
due to a change in law, regulation, policy or
guideline or interpretation or application of law
or regulation, policy or guideline, to account for
the Preferred Securities as Tier I Capital under
the capital guidelines or policies of the Federal
Reserve.
Redemption Price.......... In the event of the redemption of Trust Securities
or other termination of CTBI Trust without
distribution of the Subordinated Debentures, each
Preferred Security shall be entitled to receive a
liquidation amount of $25 plus accrued and unpaid
distributions thereon (including interest thereon)
to the date of payment.
Distribution of
Subordinated Debentures...
The Company has the right at any time to liquidate
CTBI Trust and cause the Subordinated Debentures to
be distributed to holders of Preferred Securities,
subject to the Company having received prior
approval of the Federal Reserve to do so if then
required under applicable capital guidelines or
policies of the Federal Reserve. See "Description
of Preferred Securities--Redemption."
The Nasdaq Stock Market's
National Market Symbol....
Application has been made to have the Preferred
Securities approved for quotation under The Nasdaq
Stock Market's National Market under the symbol
"CTBIP."
4
<PAGE>
COMMUNITY TRUST BANCORP, INC.
SUMMARY CONSOLIDATED FINANCIAL DATA(1)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
----------------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF
OPERATIONS
Interest Income......... $ 144,447 $ 131,026 $ 106,560 $ 104,929 $ 109,946
Interest Expenses....... 69,092 64,992 47,370 46,616 53,746
---------- ---------- ---------- ---------- ----------
Net interest income.. 75,355 66,034 59,190 58,313 56,200
Provision for loan
losses................. 7,285 5,858 6,066 4,442 7,311
Noninterest income...... 14,439 11,116 9,653 12,069 11,427
Noninterest expense..... 55,243 55,871 52,287 45,571 42,140
---------- ---------- ---------- ---------- ----------
Income before federal
income taxes........... 27,266 15,421 10,490 20,369 18,176
Federal income tax
expense................ 8,471 4,608 2,278 5,533 5,072
---------- ---------- ---------- ---------- ----------
Net income........... $ 18,795 $ 10,813 $ 8,212 $ 14,836 $ 13,104
========== ========== ========== ========== ==========
PER COMMON SHARE:
Earnings per share...... $ 2.06 $ 1.21 $ 0.95 $ 1.80 $ 1.63
Cash dividends declared. 0.74 0.66 0.61 0.55 0.51
As a percentage of
earnings per share.... 35.92% 54.55% 64.21% 30.56% 31.29%
Book value, end of year. 15.86 14.66 13.57 13.44 12.08
Average common shares
outstanding (in
thousands)............. 9,138 8,960 8,601 8,246 8,024
AT YEAR END:
Total assets............ $1,815,660 $1,730,170 $1,499,434 $1,464,039 $1,390,910
Long-term debt.......... 19,136 27,873 24,944 35,277 36,340
Shareholders' equity.... 144,754 133,795 166,636 107,371 96,406
AVERAGES:
Assets.................. $1,762,009 $1,630,922 $1,470,630 $1,415,441 $1,354,655
Deposits................ 1,467,794 1,359,947 1,216,544 1,181,347 1,173,305
Earning assets.......... 1,632,532 1,508,539 1,365,750 1,313,064 1,253,475
Loans................... 1,215,243 1,021,637 872,045 849,202 857,532
Shareholders' equity.... 138,925 130,780 116,165 102,445 90,594
PROFITABILITY RATIOS:
Return on average
assets................. 1.07% 0.66% 0.56% 1.05% 0.97%
Return on average common
equity................. 13.53% 8.27% 7.07% 14.48% 14.46%
Net interest margin..... 4.76% 4.54% 4.51% 4.60% 4.68%
CAPITAL RATIOS:
Average equity to
average assets......... 7.88% 8.02% 7.90% 7.24% 6.69%
Risk-based capital
ratios:
Leverage ratio......... 7.05% 6.44% 7.19% 6.36% 5.89%
Tier I Capital......... 9.71% 10.24% 11.08% 10.10% 9.34%
Total capital.......... 10.96% 11.51% 12.33% 12.23% 11.53%
OTHER SIGNIFICANT
RATIOS:
Allowance to net loans,
end of year............ 1.44% 1.44% 1.43% 1.58% 1.63%
Allowance to
nonperforming loans,
end of year............ 113.50% 119.99% 106.12% 90.04% 95.96%
Nonperforming assets to
loans and foreclosed
properties, end of
year................... 1.35% 1.37% 1.83% 2.18% 2.51%
Net charge-offs to
average loans.......... 0.37% 0.47% 0.74% 0.57% 0.60%
RATIO OF EARNINGS TO
FIXED CHARGES:(2)
Excluding deposit
interest.............. 4.10x 2.77x 2.33x 3.61x 4.85x
Including deposit
interest.............. 1.39x 1.24x 1.22x 1.43x 1.34x
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS:(2)
Excluding deposit
interest.............. 4.10x 2.77x 2.33x 3.61x 4.85x
Including deposit
interest.............. 1.39x 1.24x 1.22x 1.43x 1.34x
</TABLE>
- --------
(1) The numbers have been adjusted to reflect a 3 for 2 common stock split,
effective February 1, 1994 to shareholders of record on January 5, 1994.
(2) Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense. The Company does not currently have
any preferred stock outstanding.
5
<PAGE>
RISK FACTORS
Prospective investors should carefully consider, together with the other
information contained and incorporated by reference in this Prospectus, the
following risk factors in evaluating the Company and its business and CTBI
Trust before purchasing the Preferred Securities offered hereby. This
Prospectus contains "forward-looking" statements within the meaning of the
Private Securities Litigation Reform Act of 1995 (the "Act") under the
captions "Prospectus Summary," "Use of Proceeds" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and that actual
results could differ materially from those contemplated by such statements.
These cautionary statements are being made pursuant to the "safe harbor"
provisions of the Act. The considerations listed below represent certain
important factors the Company believes could cause such results to differ.
These considerations are not intended to represent a complete list of the
general or specific risks that may affect the Company and CTBI Trust or
guarantees of future performance. It should be recognized that other risks may
be significant, presently or in the future, and the risks set forth below may
affect the Company and CTBI Trust to a greater extent than indicated, and that
actual results may differ materially from those in the forward-looking
statements.
RISK FACTORS RELATING TO THE PREFERRED SECURITIES
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE GUARANTEE AND THE SUBORDINATED
DEBENTURES
The obligations of the Company under the Guarantee issued by the Company for
the benefit of the holders of Preferred Securities and under the Subordinated
Debentures are unsecured and rank subordinate and junior in right of payment
to all Senior Debt and Subordinated Debt of the Company and, in certain
circumstances relating to the dissolution, winding-up, liquidation or
reorganization of the Company, to all Additional Senior Obligations of the
Company. As of December 31, 1996, the aggregate outstanding Senior Debt,
Subordinated Debt and Additional Senior Obligations of the Company were
approximately $19,200,000. Because the Company is a holding company, the right
of the Company to participate in any distribution of assets of any of the
Banks upon any such Bank's liquidation or reorganization or otherwise (and
thus the ability of holders of the Preferred Securities to benefit indirectly
from such distribution) is subject to the prior claims of creditors of that
Bank, except to the extent that the Company may itself be recognized as a
creditor of that Bank. Accordingly, the Subordinated Debentures will be
effectively subordinated to all existing and future liabilities of the Banks,
and holders of Subordinated Debentures and Preferred Securities should look
only to the assets of the Company for payments on the Subordinated Debentures.
None of the Indenture, the Guarantee or the CTBI Trust Agreement places any
limitation on the amount of secured or unsecured debt, including Senior Debt,
Subordinated Debt and Additional Senior Obligations, that may be incurred by
the Company. See "Description of Guarantee--Status of the Guarantee" and
"Description of Subordinated Debentures--Subordination."
The ability of CTBI Trust to pay amounts due on the Preferred Securities is
solely dependent upon the Company making payments on the Subordinated
Debentures as and when required.
OPTION TO EXTEND INTEREST PAYMENT PERIOD; TAX CONSEQUENCES
So long as no Event of Default under the Indenture has occurred and is
continuing, the Company has the right under the Indenture to defer the payment
of interest on the Subordinated Debentures at any time or from time to time
for a period not exceeding 20 consecutive quarters with respect to each
Extension Period, provided that no Extension Period may extend beyond the
Stated Maturity of the Subordinated Debentures. As a consequence of any such
deferral, quarterly Distributions on the Preferred Securities by CTBI Trust
will be deferred (and the amount of Distributions to which holders of the
Preferred Securities are entitled will accumulate additional Distributions
thereon at the rate of % per annum, compounded quarterly from the relevant
payment date for such Distributions to the date of payment) during any such
Extension Period. During any such Extension Period, the Company may not (i)
declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of the Company's
capital stock, or (ii) make any payment of principal, interest or premium, if
any, on, or repay, repurchase or redeem any debt
6
<PAGE>
securities of the Company, that rank pari passu with, or are junior in
interest to, the Subordinated Debentures or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company, if such guarantee ranks pari passu with, or is
junior in interest to, the Subordinated Debentures (other than (a) dividends
or distributions in Company common stock, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee and (d) purchases of common stock related to the rights under any of
the Company's benefit plans for its directors, officers or employees). Prior
to the termination of any such Extension Period, the Company may further defer
the payment of interest, provided that no Extension Period may exceed 20
consecutive quarters or extend beyond the Stated Maturity of the Subordinated
Debentures. Upon the termination of any Extension Period and the payment of
all interest then accrued and unpaid (together with interest thereon at the
annual rate of % compounded quarterly, to the extent permitted by
applicable law), the Company may elect to begin a new Extension Period subject
to the above requirements. There is no limitation on the number of times that
the Company may elect to begin an Extension Period. See "Descriptions of
Preferred Securities--General" and "Description of Subordinated Debentures--
Option to Extend Interest Payment Period."
Should an Extension Period occur, a holder of Preferred Securities will be
required to accrue and recognize income (in the form of original issue
discount) in respect of its pro rata share of the interest accruing on the
Subordinated Debentures held by CTBI Trust for United States federal income
tax purposes. As a result, a holder of Preferred Securities will include such
income in gross income for United States federal income tax purposes in
advance of the receipt of cash, and will not receive the cash related to such
income from CTBI Trust if the holder disposes of the Preferred Securities
prior to the record date for the payment of the related Distributions. See
"Certain Federal Income Tax Consequences--Potential Extension of Interest
Payment Period and Original Issue Discount."
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures. However, should the Company elect to exercise such
right in the future, the market price of the Preferred Securities is likely to
be adversely affected. A holder that disposes of its Preferred Securities
during an Extension Period, therefore, might not receive the same return on
its investment as a holder that continues to hold its Preferred Securities. In
addition, as a result of the existence of the Company's right to defer
interest payments, the market price of the Preferred Securities may be more
volatile than the market prices of other securities on which original issue
discount accrues that are not subject to such optional deferrals.
TAX EVENT, INVESTMENT COMPANY EVENT, OR CAPITAL EVENT--REDEMPTION
Upon the occurrence and during the continuance of a Tax Event, Investment
Company Event or Capital Event (whether occurring before or after March 31,
2007), the Company has the right to redeem the Subordinated Debentures in
whole (but not in part) within 90 days following the occurrence of such Tax
Event, Investment Company Event or Capital Event and, therefore, cause a
mandatory redemption of the Preferred Securities. The exercise of such right
is subject to the Company having received prior approval of the Federal
Reserve to do so if then required under applicable guidelines or policies of
the Federal Reserve. See "Description of Subordinated Debentures--Redemption."
EXCHANGE OF PREFERRED SECURITIES FOR SUBORDINATED DEBENTURES
The Company will have the right at any time to terminate CTBI Trust and
cause the Subordinated Debentures to be distributed to the holders of the
Preferred Securities in liquidation of CTBI Trust. The exercise of such right
is subject to the Company having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve. See "Description of Preferred Securities-- Redemption."
7
<PAGE>
SHORTENING OF STATED MATURITY OF SUBORDINATED DEBENTURES
The Company will have the right at any time to shorten the maturity of the
Subordinated Debentures to a date not earlier than March 31, 2007. The exercise
of such right is subject to the Company having received prior approval of the
Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve.
EXTENSION OF STATED MATURITY OF SUBORDINATED DEBENTURES
The Company will also have the right to extend the maturity of the
Subordinated Debentures whether or not CTBI Trust is terminated and the
Subordinated Debentures are distributed to holders of the Preferred Securities
to a date no later than the 39th anniversary of the initial issuance of the
Preferred Securities, provided that the Company can extend the maturity only if
at the time such election is made and at the time of such extension (i) the
Company is not in bankruptcy, otherwise insolvent or in liquidation, (ii) the
Company is not in default in the payment of any interest or principal on the
Subordinated Debentures, and (iii) CTBI Trust is not in arrears on payments of
Distributions on the Preferred Securities and no deferred Distributions are
accumulated.
RIGHTS UNDER THE GUARANTEE
The Guarantee guarantees to the holders of the Preferred Securities the
following payments, to the extent not paid by CTBI Trust: (i) any accumulated
and unpaid Distributions required to be paid on the Preferred Securities, to
the extent that CTBI Trust has funds on hand legally available therefor at such
time, (ii) the redemption price with respect to any Preferred Securities called
for redemption, to the extent that CTBI Trust has funds on hand legally
available therefor at such time, and (iii) upon a voluntary or involuntary
dissolution, winding-up or liquidation of CTBI Trust (unless the Subordinated
Debentures are distributed to holders of the Preferred Securities), the lesser
of (a) the aggregate of the Liquidation Amount and all accumulated and unpaid
Distributions to the date of payment to the extent that CTBI Trust has funds on
hand available therefor at such time and (b) the amount of assets of CTBI Trust
remaining available for distribution to holders of the Preferred Securities.
The holders of not less than a majority of aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust power conferred
upon the Guarantee Trustee under the Guarantee. Any holder of the Preferred
Securities may institute a legal proceeding directly against the Company to
enforce its rights under the Guarantee without first instituting a legal
proceeding against CTBI Trust, the Guarantee Trustee or any other person or
entity. If the Company were to default on its obligation to pay amounts payable
under the Subordinated Debentures, CTBI Trust would lack funds for the payment
of Distributions or amounts payable on redemption of the Preferred Securities
or otherwise, and, in such event, holders of Preferred Securities would not be
able to rely upon the Guarantee for such amounts. Instead, in the event a
Debenture Event of Default shall have occurred and be continuing and such event
is attributable to the failure of the Company to pay interest on or principal
of the Subordinated Debentures on the payment date on which such payment is due
and payable, then a holder of Preferred Securities may institute a legal
proceeding directly against the Company for enforcement of payment to such
holder of the principal of or interest on such Subordinated Debentures having a
principal amount equal to the aggregate Liquidation Amount of the Preferred
Securities of such holder (a "Direct Action"). In connection with such Direct
Action, the Company will have a right of set-off under the Indenture to the
extent of any payment made by the Company to such holder of Preferred
Securities in the Direct Action. Except as described herein, holders of
Preferred Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures or assert directly any
other rights in respect of the Subordinated Debentures. See "Description of
Subordinated Debentures--Debenture Events of Default," "--Enforcement of
Certain Rights by Holders of Preferred Securities" and "Description of
Guarantee."
The CTBI Trust Agreement provides that each holder of Preferred Securities by
acceptance thereof agrees to the provisions of the Guarantee and the Indenture.
8
<PAGE>
LIMITED VOTING RIGHTS
Holders of Preferred Securities will generally have limited voting rights
relating only to the modification of the Preferred Securities and the exercise
of CTBI Trust's rights as holder of Subordinated Debentures and the Guarantee.
Holders of Preferred Securities will not be entitled to vote to appoint, remove
or replace the Property Trustee or the Delaware Trustee, and such voting rights
are vested exclusively in the holder of the Common Securities except upon the
occurrence of certain events described herein. The Property Trustee, the
Administrative Trustees and the Company may amend the CTBI Trust Agreement
without the consent of holders of Preferred Securities to ensure that CTBI
Trust will be classified for United States federal income tax purposes as a
grantor trust even if such action adversely affects the interests of such
holders. See "Description of Preferred Securities--Removal of CTBI Trust
Trustees" and "--Voting Rights; Amendment of Trust Agreement."
POSSIBLE TAX LAW CHANGES AFFECTING THE PREFERRED SECURITIES
On February 6, 1997, the revenue portion of President Clinton's 1998 budget
proposal (the "Budget Proposal") was released. The Budget Proposal would
generally deny deductions for interest on an instrument issued by a corporation
that has a maximum weighted average maturity of more than 40 years. The Budget
Proposal would also generally deny deductions for interest or original issue
discount on an instrument issued by a corporation that has a maximum term of
more than 15 years and that is not shown as indebtedness on the separate
balance sheet of the issuer filed with the Commission or, where the instrument
is issued to a related party (other than a corporation), where the holder or
some other related party issues a related instrument that is not shown as
indebtedness on the issuer's consolidated balance sheet filed with the
Commission. The above described provisions of the Budget Proposal are proposed
to be effective generally for instruments issued on or after the date of first
Congressional committee action. Since the Subordinated Debentures cannot have a
term exceeding 40 years, the first of the above described Budget Proposals
would be inapplicable. Furthermore, since the Company intends to reflect the
Preferred Securities as long-term debt in its consolidated balance sheet filed
with the Commission (although it will treat the Preferred Securities as a
minority interest for regulatory reporting), the Budget Proposal, as currently
drafted, would not appear to apply to the Subordinated Debentures. There can be
no assurance, however, that similar legislation which would apply to the
Subordinated Debentures will not be enacted, and such legislation could be
retroactive in effect. If any such legislation were enacted, the Company would
be unable to deduct interest on the Subordinated Debentures. Such a change
could give rise to a Tax Event, which would permit the Company to cause a
redemption of the Preferred Securities before March 31, 2007. See "Description
of Subordinated Debentures--Redemption" and "Description of the Preferred
Securities--Redemption--Tax Event Redemption, Investment Company Event
Redemption or Capital Event Redemption." See also "Certain Federal Income Tax
Consequences--Effect of Proposed Changes in Tax Laws."
MARKET PRICES
There can be no assurance as to the market prices for Preferred Securities or
Subordinated Debentures that may be distributed in exchange for Preferred
Securities if a liquidation of CTBI Trust occurs. Accordingly, the Preferred
Securities, or the Subordinated Debentures that a holder of Preferred
Securities may receive on liquidation of CTBI Trust, may trade at a discount to
the price that the investor paid to purchase the Preferred Securities offered
hereby. In addition, there can be no assurance that the Company will not
exercise its option to change the maturity of the Subordinated Debentures as
permitted by the terms thereof and of the Indenture. Because holders of
Preferred Securities may receive Subordinated Debentures on liquidation of CTBI
Trust, prospective purchasers of Preferred Securities are also making an
investment decision with regard to the Subordinated Debentures and should
carefully review all the information regarding the Subordinated Debentures
contained herein. See "Description of Subordinated Debentures."
TRADING CHARACTERISTICS OF PREFERRED SECURITIES
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the underlying
Subordinated Debentures. A holder that disposes of its Preferred Securities
9
<PAGE>
between record dates for payments of distributions thereon (and consequently
does not receive a Distribution from CTBI Trust for the period prior to such
disposition) will be required to include as ordinary income either OID (if
applicable) or accrued but unpaid interest on the Subordinated Debentures
through the date of disposition. To the extent the amount realized is less than
the holder's adjusted tax basis, a holder will generally recognize a capital
loss. Subject to certain limited exceptions, capital losses cannot be applied
to offset ordinary income for United States federal income tax purposes. See
"Certain Federal Income Tax Consequences--Disposition of Preferred Securities."
PREFERRED SECURITIES ARE NOT INSURED
The Preferred Securities are not insured by the Bank Insurance Fund or the
Savings Association Insurance Fund of the Federal Deposit Insurance Corporation
("FDIC") or by any other governmental agency.
RISK FACTORS RELATING TO THE COMPANY
STATUS OF THE COMPANY AS A BANK HOLDING COMPANY
The Company is a legal entity separate and distinct from the Banks and its
other subsidiaries, although the principal source of the Company's cash
revenues is dividends from the Banks. The right of the Company to participate
in the assets of any subsidiary upon the latter's liquidation, reorganization
or otherwise (and thus the ability of the holders of Preferred Securities to
benefit indirectly from any such distribution) will be subject to the claims of
the subsidiaries' creditors, which will take priority except to the extent that
the Company may itself be a creditor with a recognized claim.
The Company's principal source of funds is dividends received from the
subsidiary banks. Regulations limit the amount of dividends that may be paid by
the Company's banking subsidiaries without prior approval. During 1997,
approximately $3.4 million plus any 1997 net profits can be paid by the
Company's banking subsidiaries without prior regulatory approval.
The Banks are also subject to restrictions under federal law which limit the
transfer of funds by any of the Banks to the Company and its nonbanking
subsidiaries, whether in the form of loans, extensions of credit, investments,
asset purchases or otherwise. Such transfers by any Bank to the Company or any
of the Company's nonbanking subsidiaries are limited in amount to 10% of such
Bank's capital and surplus and, with respect to the Company and all such
nonbanking subsidiaries, to an aggregate of 20% of such Bank's capital and
surplus. Furthermore, such loans and extensions of credit are required to be
secured in specified amounts.
IMPACT OF INTEREST RATE CHANGES
The Company's results of operations are derived from the operations of the
Banks and are principally dependent on net interest income, calculated as the
difference between interest earned on loans and investments and the interest
expense paid on deposits and other borrowings. Like other banks and financial
institutions, the Company's interest income and interest expense are affected
by general economic conditions and by the policies of regulatory authorities,
including the monetary policies of the Federal Reserve. While management has
taken measures intended to manage the risks of operating in a changing interest
rate environment, there can be no assurance that such measures will be
effective in avoiding undue interest rate risk. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Interest Rate
Sensitivity Analysts."
CREDIT RISK AND LOAN CONCENTRATION
As a financial institution, the Company is exposed to the risk that customers
to whom the Banks have made loans will be unable to repay those loans according
to their terms and that collateral securing such loans (if any) may not be
sufficient in value to assure repayment. Credit losses could have a material
adverse effect on the Company's operating results.
10
<PAGE>
A primary risk facing the Company, and financial institutions in general, is
credit risk, that is, the risk of losing principal and interest due to a
borrower's failure to perform according to the terms of such borrower's loan
agreement. As of December 31, 1996, the Company's total loan portfolio was
approximately $1,220 million or 67.8% of its total assets. The three largest
components of the loan portfolio are commercial loans, $539 million or 38.6% of
total loans, consumer installment loans, $257 million or 23.7% of total loans,
and real estate mortgage and construction loans, $420 million or 37.4% of total
loans. The Company's credit risk with respect to its consumer installment loan
portfolio and commercial loan portfolio relates principally to the general
creditworthiness of individuals and small- to medium-sized businesses in
eastern, central and south-central Kentucky and eastern and central Tennessee.
The Company's credit risk with respect to its real estate mortgage and
construction loan portfolio relates principally to the general creditworthiness
of individuals and the value of real estate serving as security for the
repayment of the loans.
REGULATORY RISK
The banking industry is heavily regulated. These regulations are primarily
intended to protect depositors and the FDIC, not shareholders or other
creditors. Regulations affecting the financial institutions industry are
undergoing continuous change, and the ultimate effect of such changes cannot be
predicted. Regulations and laws affecting the Company and the Banks may be
modified at any time, and new legislation affecting financial institutions may
be proposed and enacted. There is no assurance that such modifications or new
laws will not materially and adversely affect the business, condition or
operations of the Company and the Banks.
EXPOSURE TO LOCAL ECONOMIC CONDITIONS
The success of the Company and the Banks is dependent to a certain extent
upon the general economic conditions of the Commonwealth of Kentucky and the
geographic markets served by the Banks. Unlike larger banks which are
geographically diversified, the Company and the Banks provide financial and
banking services to customers in east, central and south-central Kentucky. No
assurance can be given concerning the economic conditions which will exist in
such markets.
COMPETITION
The Company's subsidiaries face substantial competition for deposit, credit
and trust relationships, as well as other sources of funding in the communities
they serve. Competing providers include other national and state banks, thrifts
and trust companies, insurance companies, mortgage banking operations, credit
unions, finance companies, money market funds and other financial and non-
financial companies which may offer products functionally equivalent to those
offered by the Company's subsidiaries. Competing providers may have greater
financial resources than the Company and offer services within and outside the
market areas served by the Company's subsidiaries.
Since July 1989, banking legislation in Kentucky has placed no limit on the
number of banks or bank holding companies which a bank holding company may
acquire. Interstate acquisitions are allowed where reciprocity exists between
the laws of Kentucky. As a result, the Company may face increased competition
from out-of-state banks. Bank holding companies are prohibited from controlling
more than 15% of deposits held by banks in the state (exclusive of inter-bank
and foreign deposits).
USE OF PROCEEDS
The CTBI Trust will use the proceeds of the sale of the Preferred Securities
to acquire Subordinated Debentures from the Company. The Company intends to
apply the net proceeds from the sale of the Subordinated Debentures to its
general funds to be used for expansion through new branches and acquisitions,
to fund growth in the Company's indirect consumer loan portfolio and for
general corporate purposes. The Company does not have any current agreements or
understandings regarding any acquisitions.
11
<PAGE>
ACCOUNTING TREATMENT
For financial reporting purposes, CTBI Trust will be treated as a subsidiary
of the Company and, accordingly, the accounts of CTBI Trust will be included in
the consolidated financial statements of the Company. The Preferred Securities
will be presented in the consolidated balance sheet of the Company as a
component of long term debt. The Company will record distributions payable on
the Preferred Securities as interest expense in its consolidated statement of
income.
12
<PAGE>
THE COMPANY
The Company is a bank holding company registered with the Board of Governors
of the Federal Reserve System ("Federal Reserve") as a bank holding company and
with the Office of Thrift Supervision as a thrift holding company. The Company
was incorporated August 12, 1980, under the laws of the Commonwealth of
Kentucky. The Company currently owns all of the capital stock of two commercial
banks, one thrift and one trust company, serving small and mid-sized
communities in eastern, central and south-central Kentucky. The commercial
banks are Community Trust Bank, N.A. and Commercial Bank, West Liberty. The
Company also owns all of the capital stock of Community Trust Bank, FSB, a
federal savings bank located in Campbellsville, Kentucky ("Savings Bank") and
the Trust Company of Kentucky, a state chartered trust company, with its
principal office in Ashland, Kentucky and satellite offices in Lexington,
Louisville, Middlesboro and Pikeville, Kentucky. As of December 31, 1996, the
Company had total consolidated assets of $1.8 billion and total consolidated
deposits of $1.5 billion, making it one of the largest independent bank holding
companies headquartered in the Commonwealth of Kentucky.
Effective January 1, 1997, the Company changed its name from Pikeville
National Corporation to Community Trust Bancorp, Inc., changed the name of the
Lead Bank from Pikeville National Bank & Trust Company to Community Trust Bank,
N.A. and merged seven of its other commercial bank subsidiaries into the Lead
Bank (the "Consolidation"). As a result of these transactions, the Lead Bank
has approximately $1.5 billion in assets and 42 offices in 12 Kentucky
counties. The Company's thrift and trust subsidiaries and West Liberty continue
to operate as independent subsidiaries.
The Company excluded Commercial Bank, West Liberty, Kentucky ("West Liberty")
from the Consolidation. The Company has entered into a definitive agreement,
subject to regulatory approval, to sell West Liberty to Commercial Bancshares,
Inc., of West Liberty, Kentucky for cash of $10.2 million. As of December 31,
1996, West Liberty had $73 million in assets, constituting 4% of the Company's
total consolidated assets. The Lead Bank, the Savings Bank and West Liberty are
collectively referred to herein as the "Banks."
Through its subsidiaries, the Company engages in a wide range of commercial
and personal banking activities, which include accepting time and demand
deposits; making secured and unsecured loans to corporations, individuals and
others; providing cash management services to corporate and individual
customers; issuing letters of credit; renting safe deposit boxes and providing
funds transfer services. The lending activities of the Banks include making
commercial, construction, mortgage, personal and consumer loans. Also available
are lease financing, lines of credit, revolving credits, term loans and other
specialized loans including asset-based financing. Various corporate
subsidiaries act as trustees of personal trusts, as executors of estates, as
trustees for employee benefit trusts, as registrars, transfer agents and paying
agents for bond and stock issues and as depositories for securities.
RECENT DEVELOPMENTS
From and after December 31, 1996, the following developments have occurred
with respect to Company:
1. On January 30, 1997, the Company declared a 10% stock dividend to
holders of the Company's common stock of record as of March 15, 1997. The
stock dividend will be distributed on April 15, 1997.
2. On January 17, 1997, the Company settled a dispute with a former
software vendor pursuant to which such former software vendor paid the
Company $4.9 million before taxes.
13
<PAGE>
CAPITALIZATION
The following table sets forth (i) the consolidated capitalization of the
Company at December 31, 1996 and (ii) the consolidated capitalization of the
Company giving effect to the issuance of the Preferred Securities hereby
offered by CTBI Trust, respectively, as if such sale had been consummated on
December 31, 1996, and assuming the Underwriters' over-allotment options were
not exercised.
<TABLE>
<CAPTION>
DECEMBER 31, 1996
---------------------
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN
THOUSANDS)
<S> <C> <C> <C>
LONG-TERM DEBT
Notes Payable...................................... $ 19,136 $ 19,136
Guaranteed preferred beneficial interests in the
Company's Subordinated Debentures................. 0 30,000
-------- --------
Total Long-term Debt............................. $ 19,136 $ 39,136
-------- --------
SHAREHOLDERS' EQUITY
Common stock, $5 par value; 25,000,000 shares
authorized; 9,128,814 shares issued and
outstanding....................................... $ 45,644 $ 45,622
Capital Surplus.................................... 27,915 27,915
Net unrealized holding gains on investment
securities available for sale..................... (781) 356
Retained earnings.................................. 71,976 71,976
-------- --------
Total Shareholders' Equity....................... 144,754 144,754
-------- --------
Total Capitalization........................... $163,890 $193,890
======== ========
</TABLE>
CAPITAL RATIOS
The following table sets forth certain ratios for the Company.
<TABLE>
<CAPTION>
TO BE WELL CAPITALIZED
UNDER PROMPT
FOR CAPITAL ADEQUACY CORRECTIVE ACTION
ACTUAL PURPOSES PROVISIONS (1)
-------------- ---------------------- -----------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
-------- ----- ------------ --------- ------------ ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1996
Total Capital
(to Risk Weighted
Assets)................ $141,339 10.96% $ 103,152 8.00% $ 128,940 10.00%
Tier I Capital
(to Risk Weighted
Assets)................ 125,188 9.71% 51,576 4.00% 77,364 6.00%
Tier I Capital
(to Average Assets).... 125,188 7.05% 71,052 4.00% 88,815 5.00%
</TABLE>
- --------
(1) The Company is not currently subject to Prompt Corrective Action
Provisions.
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA OF THE COMPANY(1)
The following table presents selected financial data for the Company for each
of the last five years ended December 31:
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---------- ---------- ---------- ---------- ----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C>
SUMMARY RESULTS OF
OPERATIONS
Interest Income......... $ 144,447 $ 131,026 $ 106,560 $ 104,929 $ 109,946
Interest Expenses....... 69,092 64,992 47,370 46,616 53,746
---------- ---------- ---------- ---------- ----------
Net interest income.. 75,355 66,034 59,190 58,313 56,200
Provision for loan
losses................. 7,285 5,858 6,066 4,442 7,311
Noninterest income...... 14,439 11,116 9,653 12,069 11,427
Noninterest expense..... 55,243 55,871 52,287 45,571 42,140
---------- ---------- ---------- ---------- ----------
Income before federal
income taxes........... 27,266 15,421 10,490 20,369 18,176
Federal income tax
expense................ 8,471 4,608 2,278 5,533 5,072
---------- ---------- ---------- ---------- ----------
Net income........... $ 18,795 $ 10,813 $ 8,212 $ 14,836 $ 13,104
========== ========== ========== ========== ==========
PER COMMON SHARE:
Earnings per share...... $ 2.06 $ 1.21 $ 0.95 $ 1.80 $ 1.63
Cash Dividends Declared. 0.74 0.66 0.61 0.55 0.51
As a percentage of
earnings per share.... 35.92% 54.55% 64.21% 30.56% 31.29%
Book value, end of year. 15.86 14.66 13.57 13.44 12.08
Average common shares
outstanding............ 9,138 8,960 8,601 8,246 8,024
AT YEAR END:
Total assets............ $1,815,660 $1,730,170 $1,499,434 $1,464,039 $1,390,910
Long-term debt.......... 19,136 27,873 24,944 35,277 36,340
Shareholders' equity.... 144,754 133,795 166,636 107,371 96,406
AVERAGES:
Assets.................. $1,762,009 $1,630,922 $1,470,630 $1,415,441 $1,354,655
Deposits................ 1,467,794 1,359,947 1,216,544 1,181,347 1,173,305
Earning assets.......... 1,632,532 1,508,539 1,365,750 1,313,064 1,253,475
Loans................... 1,215,243 1,021,637 872,045 849,202 857,532
Shareholders' equity.... 138,925 130,780 116,165 102,445 90,594
PROFITABILITY RATIOS:
Return on average
assets................. 1.07% 0.66% 0.56% 1.05% 0.97%
Return on average common
equity................. 13.53% 8.27% 7.07% 14.48% 14.46%
Net interest margin..... 4.76% 4.54% 4.51% 4.60% 4.68%
CAPITAL RATIOS:
Average equity to
average assets......... 7.88% 8.02% 7.90% 7.24% 6.69%
Risk-based capital
ratios:
Leverage ratio......... 7.05% 6.44% 7.19% 6.36% 5.89%
Tier I Capital......... 9.71% 10.24% 11.08% 10.10% 9.34%
Total capital.......... 10.96% 11.51% 12.33% 12.23% 11.53%
OTHER SIGNIFICANT
RATIOS:
Allowance to net loans,
end of year............ 1.44% 1.44% 1.43% 1.58% 1.63%
Allowance to
nonperforming loans,
end of year............ 113.50% 119.99% 106.12% 90.04% 95.96%
Nonperforming assets to
loans and foreclosed
properties,
end of year............ 1.35% 1.37% 1.83% 2.18% 2.51%
Net charge-offs to
average loans.......... 0.37% 0.47% 0.74% 0.57% 0.60%
RATIO OF EARNINGS TO
FIXED CHARGES:(2)
Excluding deposit
interest.............. 4.10x 2.77x 2.33x 3.61x 4.85x
Including deposit
interest.............. 1.39x 1.24x 1.22x 1.43x 1.34x
RATIO OF EARNINGS TO
COMBINED FIXED CHARGES
AND PREFERRED STOCK
DIVIDENDS:(2)
Excluding deposit
interest.............. 4.10x 2.77x 2.33x 3.61x 4.85x
Including deposit
interest.............. 1.39x 1.24x 1.22x 1.43x 1.34x
</TABLE>
- --------
(1) The numbers have been adjusted to reflect a 3 for 2 common stock split,
effective February 1, 1994 to shareholders of record on January 5, 1994.
(2) Earnings consist of income before income tax plus interest expense. Fixed
charges consist of interest expense. The Company does not currently have
any preferred stock outstanding.
15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Company reported record earnings of $18.8 million for 1996, an increase
of 74% over the $10.8 million for 1995 and an increase of 129% over the $8.2
million for 1994. Earnings per share for 1996 increased to $2.06 per share,
compared to $1.21 for 1995 and $0.95 for 1994.
Earnings for 1996 reflected increases in net interest income and noninterest
income and decreases in noninterest expense. The Company's return on average
assets for 1996 increased to 1.07% from 0.56% and 0.66% in 1994 and 1995,
respectively, and the return on average equity for 1996 increased to 13.53% as
compared to 7.07% and 8.27% for 1994 and 1995, respectively.
Total assets as of December 31, 1996 were $1.82 billion, an increase of 5.2%
as compared to total assets of $1.73 billion as of December 31, 1995. Total
loans as of December 31, 1996 were $1.31 billion compared to $1.12 billion as
of December 31, 1995, an increase of 17.0%. Total deposits increased marginally
from $1.47 billion at December 31, 1995 to $1.48 billion at December 31, 1996.
Effective January 1, 1997, the Company changed its name from Pikeville
National Corporation to Community Trust Bancorp, Inc., changed the name of its
lead bank from Pikeville National Bank and Trust Company to Community Trust
Bank, N.A. (the "Lead Bank") and merged seven of its other commercial bank
subsidiaries into the Lead Bank. As a result of these transactions, the Lead
Bank has $1.5 billion in assets and forty-two offices in twelve Kentucky
counties. The Company's thrift and trust subsidiaries, the Savings Bank and
Trust Company of Kentucky, remain subsidiaries of the Company and will continue
to operate as independent entities.
The Company excluded West Liberty from the merger of its commercial bank
subsidiaries into the Lead Bank. The Company has entered into a definitive
agreement, subject to regulatory approval, to sell West Liberty to Commercial
Bancshares, Inc., of West Liberty, Kentucky for cash of $10.2 million. West
Liberty has $73 million in assets, constituting 4% of the Company's total
consolidated assets. Consistent with the Company's strategic plan, the funds
generated by the sale of West Liberty will provide the Company with the
opportunity to expand in existing or enter into new markets through either
internal expansion or acquisitions.
After fourteen years of service, including as President and CEO from January
1, 1995, Terry Coleman resigned effective November 1, 1996 to pursue other
interests. Burlin Coleman, the CEO from 1979 through 1994 and current chairman,
came out of retirement to take over as President and CEO. The Company intends
to continue the direction undertaken during Terry Coleman's tenure and does not
expect his departure to have significant adverse consequences on the Company.
The Company reached a settlement in a dispute with a former software vendor
in January 1997. The settlement will increase 1997 earnings by $3.2 million,
net of tax, and will be reported as an extraordinary item in the 1997
consolidated financial statements.
ACQUISITIONS
While no acquisitions were completed in 1996, the Company acquired all of the
outstanding stock of four Kentucky banks during 1995, giving the Company
additional economies of scale and new markets in which to deliver its existing
products.
On February 2, 1995, the Company acquired Community Bank of Lexington, Inc.,
Lexington, Kentucky ("Community Bank"), which had assets of $61 million. The
Company issued 366,000 shares of common stock with a market price of $24 per
share to fund the acquisition. The transaction was accounted for as a purchase,
with $6.3 million of goodwill recognized. The offices of Community Bank became
branches of the Lead Bank
16
<PAGE>
on March 31, 1995. While the Company had already been active in lending in the
Lexington-Fayette County market through its loan production office, this
acquisition has given the Company offices in which to provide deposit products
and other financial services in one of Kentucky's fastest growing markets.
On May 31, 1995, the Company acquired Woodford Bancorp, Inc., Versailles,
Kentucky ("Woodford"), which had assets of $103 million for 967,000 shares of
its common stock. The transaction was accounted for as a pooling-of-interests,
and all prior period financial information was restated to give effect to the
transaction. This acquisition gives the Company another presence in the central
Kentucky area, which has one of the highest per capita incomes and lowest
unemployment rates in Kentucky.
On June 30, 1995, the Company acquired Commercial Bank, Middlesboro, Kentucky
("Middlesboro"), which had assets of $99 million for $14.4 million in cash. The
transaction was accounted for as a purchase, and goodwill of $4.3 million was
recognized. The Company borrowed $13.5 million to fund the acquisition.
Middlesboro is located on the Kentucky-Virginia-Tennessee border and is a
growing market with a thriving tourism industry.
On November 3, 1995, the Company acquired United Whitley Corporation,
Williamsburg, Kentucky ("Williamsburg"), and its subsidiary, Bank of
Williamsburg, which had assets of $37 million, for 172,000 shares of its common
stock. The transaction was accounted for as a pooling-of-interests, but without
restatement of prior period financial information, due to lack of materiality.
Bank of Williamsburg was merged into Farmers National Bank, Williamsburg,
Kentucky, already owned by the Company on the date of acquisition. Through the
acquisition, the Company increased the deposit base of an existing affiliate
substantially while increasing its operating costs only marginally. Through the
merger transaction, the Company was able to move the bank charter of the merged
institution to adjacent Laurel County and now has a branch in London, Kentucky,
which is among the fastest growing areas in Kentucky.
RESULTS OF OPERATIONS
1996 COMPARED TO 1995
Net income for 1995 was $10.8 million compared to $18.8 million for 1996.
Earnings per share for 1995 was $1.21 per share compared to $2.06 per share for
1996. All information has been restated due to the acquisition of Woodford on
May 31, 1995, which was accounted for as a pooling-of-interests.
Net interest income for 1996 increased 14.2% as compared to 1995, rising from
$66.0 million in 1995 to $75.4 million in 1996. Noninterest income increased
29.7% from $11.1 million in 1995 to $14.4 million in 1996 while noninterest
expense decreased 1.3% from $55.9 million in 1995 to $55.2 million in 1996.
Return on average assets increased from 0.66% in 1995 to 1.07% in 1996 and
return on average equity increased from 8.27% in 1995 to 13.53% in 1996.
Net Interest Income
Net interest income increased 14.2% from 1995 to 1996 and was a major
contributing factor to the Company's increase in net income. Net interest
income increased from $66.0 million in 1995 to $75.4 million in 1996. The
increase was primarily due to the increase in average earning assets and the
increase in loans as a percentage of total assets which allowed the Company to
increase its yield on average earning assets while its cost of interest bearing
funds declined slightly.
The Company's average earning assets increased from $1.51 billion in 1995 to
$1.63 billion in 1996. Average interest bearing liabilities also increased
during the period, from $1.32 billion in 1995 to $1.42 billion in 1996. Average
interest bearing liabilities as a percentage of average earning assets remained
fairly stable, going from 87.4% in 1995 to 87.1% in 1996.
17
<PAGE>
The taxable equivalent yield on average interest earning assets increased
from 8.86% in 1995 to 8.99% in 1996. The cost of average interest bearing
liabilities declined from 4.93% to 4.86% during the same period. As a result of
the thirteen basis point increase in yield on average earning assets and the
seven basis point reduction in cost of interest bearing funds, the net interest
margin increased from 4.54% in 1995 to 4.76% in 1996.
The Company was able to increase its yield on average earning assets through
investing more of its assets in loans, its highest yielding asset. Loans
accounted for 63.5% of total assets as of December 31, 1995 compared to 71.1%
as of December 31, 1996. Most of the loan growth came from consumer loans
generated from the indirect consumer lending program, which began late in 1995.
As of the end of 1996, the Company's indirect consumer loan portfolio exceeded
$100 million.
The Company was also able to reduce the cost of interest bearing liabilities
during the year. This was achieved by implementation of strict adherence to
deposit pricing standards, which enabled the Company to reduce the cost of
savings and NOW accounts by thirteen basis points while the cost of time
deposits increased by only two basis points. By more closely managing its
borrowings, the company was also able to reduce its borrowing cost on Federal
Home Loan Bank advances by thirty-six basis points.
Provision for Loan Losses
The provision for loan losses increased from $5.9 million in 1995 to $7.3
million in 1996. Average loans were significantly higher in 1996 increasing
19.6% from $1.02 billion in 1995 to $1.22 billion in 1996.
Charge-offs, net of recoveries, as a percentage of average loans outstanding
declined from 0.47% in 1995 to 0.37% in 1996 as outstanding loans increased,
but net charge-offs increased by a proportionately less amount. The allowance
for loan losses increased significantly, rising from $16.1 million at December
31, 1995 to $18.8 million at December 31, 1996. The increase in the reserve is
due to a provision in excess of loan charge-offs to increase the reserve
proportionally to the increase in loans outstanding. The Company does not
believe there are currently any trends, events or uncertainties that are
reasonably likely to have a material effect on the volume of its nonperforming
loans.
Noninterest Income
Noninterest income increased 29.7% from $11.1 million in 1995 to $14.4
million in 1996. Service charges on deposit accounts was the largest component
of noninterest income and increased from $5.2 million in 1995 to $6.3 million
in 1996 as the Company introduced new policies which reduced the amount of fees
that were waived. Trust income increased from $1.3 million in 1995 to $1.6
million in 1996 as the trust assets managed increased during the year. Gains on
sale of residential mortgage loans increased from $462 thousand to $1.7 million
as increased loan demand enabled the Company to a sell larger volume of loans.
Other noninterest income increased from $4.1 million in 1995 to $4.7 million in
1996. The largest component of other noninterest income was insurance
commissions, which increased 22.2% from $1.1 million in 1995 to $1.6 million in
1996, mainly due to increases in loans. Loans accounted for 71.1% of total
assets at December 31, 1996 compared to 63.5% of total assets at December 31,
1995. Securities gains and losses were not a factor in the increase as the
Company incurred net securities gains of $88 thousand in 1996 and $12 thousand
in 1995.
Noninterest Expense
Noninterest expense decreased from $55.9 million in 1995 to $55.2 million in
1996. Salaries and employee benefits increased from $24.6 million in 1995 to
$28.2 million in 1996 as the number of full-time equivalent employees increased
due to acquisitions of new banks and opening of new branches. Occupancy expense
increased marginally from $3.9 million in 1995 to $4.0 million in 1996, and
equipment costs remained level at $3.7 million for both 1995 and 1996. Data
processing costs declined from $2.8 million in 1995 to $2.6 million in 1996 and
stationery and printing costs declined from $1.9 million in 1995 to $1.7
million in 1996. Taxes other
18
<PAGE>
than payroll, property and income, which consists mainly of Kentucky Franchise
taxes on the equity of the affiliate banks, increased slightly from $2.0
million in 1995 to $2.1 million in 1996. FDIC Insurance declined from $3.0
million to $113 thousand as the FDIC reduced premium rates to "well-
capitalized" institutions, of which all of the Company's affiliates qualify.
Other noninterest expense declined from $13.9 million in 1995 to $12.8 million
in 1996, consistent with the Company's cost containment measures introduced
late in 1995.
1995 COMPARED TO 1994
Net income for 1995 was $10.8 million compared to $8.2 million for 1994.
Earnings per share for 1994 was $0.95 per share compared to $1.21 for 1995.
Net Interest Income
Net interest income rose from $59.2 million in 1994 to $66.0 million in 1995.
The increase in net interest income was due to a higher level of average
earning assets and rising interest rates during 1995. The yield on interest
earning assets and the cost of interest bearing liabilities both increased
during 1995 as compared to 1994. The taxable equivalent yield on average
interest earning assets increased from 7.98% in 1994 to 8.86% in 1995. The cost
of average interest bearing liabilities increased from 3.97% to 4.93% during
the same period. As a result of this the net interest margin increased from
4.51% in 1994 to 4.54% in 1995.
Noninterest Income
Noninterest income increased 15.2% from $9.7 million in 1994 to $11.1 million
in 1995. Service charges on deposit accounts, the largest component, increased
from $4.7 million in 1994 to $5.2 million in 1995. During the same period,
other noninterest income increased from $2.7 million to $4.1 million and trust
income decreased from $1.6 million to $1.3 million. Net gains from the sale of
residential mortgage loans decreased from $784 thousand in 1994 to $462
thousand in 1995, due to the rising interest rates in effect during 1995.
Securities gains and losses were minimal in both periods, as the Company
incurred net securities losses of $45 thousand in 1994 and net securities gains
of $12 thousand in 1995.
Noninterest Expense
Noninterest expense increased from $52.3 million in 1994 to $55.9 million in
1995. Except for two unusual items which decreased significantly, all other
categories increased as would be expected in a period of acquisitions. The
increases in assets, employees and operational facilities from the 1995
acquisitions all contributed to across the board increases in noninterest
expenses. Salaries and benefits increased from $23.0 million in 1994 to $24.6
million in 1995, occupancy expense increased from $3.3 million to $3.9 million,
data processing increased from $2.1 million to $2.8 million, stationery &
printing costs increased from $1.5 million to $1.9 million and other taxes
increased from $1.7 million to $2.0 million while other noninterest expense
items increased from $11.1 million in 1994 to $13.9 million in 1995. The two
items which decreased significantly were losses associated with mortgage-backed
derivative securities and restructuring and reengineering costs.
Mortgage-backed derivatives had been purchased for certain trust accounts
administered by the Company's affiliates. While these securities are guaranteed
by either the Federal Home Loan Mortgage or the Federal National Mortgage
Association, and therefore, pose very little, if any credit risk, they
exhibited an excessive volatility which led to a significant decline in their
market value in 1994 which represented the difference between the book value
carried in the customer accounts and the actual market value. The Company
purchased the securities from the trust accounts during 1994 and because of the
government guarantees. The Company sold these securities in the first quarter
of 1997.
During the latter part of 1993 and continuing through 1994, the Company
intensively examined ways to improve its performance through restructuring its
operations and reengineering its work flow processes. As a result of this, the
Company downsized its workforce by approximately 9% of total employment.
Severance and other related costs of downsizing in the amount of $0.9 million
were recognized in 1994.
19
<PAGE>
LIQUIDITY
The Company's objectives are to ensure that funds are available at the
subsidiary banks to meet deposit withdrawals and credit demands without unduly
penalizing profitability, and to ensure that funding is available for the
parent company to meet the ongoing cash needs while maximizing profitability.
The Company continues to identify ways to provide for liquidity on both a
current and long-term basis. On a long-term basis, the Banks rely mainly on
core deposits, certificates of deposit of $100,000 or more, repayment of
principal and interest on loans and securities, as well as federal funds sold
and purchased. The subsidiary banks also rely on the sale of securities under
repurchase agreements, securities available-for-sale and Federal Home Loan Bank
borrowings.
Deposits increased marginally from $1.47 billion at December 31, 1995 to
$1.48 billion at December 31, 1996. In order to compensate for the lack of
funding from deposit growth, the Company increased its borrowings of federal
funds purchased and other short-term borrowings from $20.4 million as of
December 31, 1995 to $44.6 million at December 31, 1996 and also increased its
Federal Home Loan Bank borrowings during the same period. The Bank is also
preparing for a securitization of its automobile retail loan portfolio during
the second quarter of 1997 to provide additional funding and liquidity. The
lack of deposit funding has not affected the Company's ability to fund loans or
service its debt obligations.
Due to the nature of the markets served by the Company's lending
institutions, management believes that the majority of its certificates of
deposit of $100,000 or more are no more volatile than its core deposits. During
the periods of low interest rates, these deposit balances remained stable as a
percentage of total deposits. In addition, arrangements have been made with two
correspondent banks for the purchase of federal funds on an unsecured basis, up
to an aggregate of $98 million, if necessary, to meet the Company's liquidity
needs.
The Company owns $230 million of securities designated as available-for-sale
and valued at market which are available to meet liquidity needs on a
continuing basis. The Company also relies on Federal Home Loan Bank advances
for both liquidity and management of its asset/liability position. Often the
Company matches the maturity of these advances with pools of residential
mortgage loans which are not sold in the secondary market, some of which have
maturities of ten to fifteen years. Federal Home Loan Bank advances increased
from $63.6 million at December 31, 1995 to $111.0 million at December 31, 1996.
The Company generally relies upon net inflows of cash from financing
activities, supplemented by net inflows of cash from operating activities, to
provide cash for its investing activities. As is typical of many financial
institutions, significant financing activities include deposit gathering, use
of short-term borrowing facilities such as federal funds purchased and
securities sold under repurchase agreements, and the issuance of long-term
debt. The Company has a $17.5 million credit line available which expires June
29, 1997, in the form of a revolving line of credit of which the entire line
was available as of December 31, 1996. The Company's primary investing
activities include purchases of investment securities and loan originations.
In conjunction with maintaining a satisfactory level of liquidity, management
monitors the degree of interest rate risk assumed on the balance sheet. The
Company monitors its interest rate risk by the use of static and dynamic gap
models at the one year interval. The static gap model monitors the difference
in interest rate sensitive assets and interest rate sensitive liabilities as a
percentage of total assets that mature within the specified time frame. The
dynamic gap model goes further in that it assumes that interest rate sensitive
assets and liabilities will be reinvested. The Company uses the Sendero system
to monitor its interest rate risk. The Company desires an interest sensitivity
gap of not more than fifteen percent of total assets at the one year interval.
20
<PAGE>
INTEREST RATE SENSITIVITY ANALYSIS
The Company's static interest rate gap position as of December 31, 1996 is
presented below:
<TABLE>
<S> <C> <C> <C> <C> <C>
<CAPTION>
0-3 3-12 TOTAL 1 OVER 1
MONTHS MONTHS YEAR YEAR TOTAL
December 31, 1996 -------- --------- ---------- -------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Interest earning assets
Securities and
deposits............. $ 87,951 $ 149,753 $ 237,704 $130,817 $ 368,521
Loans................. 519,047 283,094 802,141 507,482 1,309,623
-------- --------- ---------- -------- ----------
Total interest earning
assets............... $606,998 $ 432,847 $1,039,845 $638,299 $1,678,144
Interest bearing
liabilities
NOW, money market and
savings accounts..... $268,063 $ 147,651 $ 415,714 $ -- $ 415,714
Time deposits......... 236,981 442,824 679,805 185,081 864,886
Federal funds
purchased and other
short-term
borrowings........... 44,585 -- 44,585 -- 44,585
Advances from FHLB.... 61,804 5,123 66,927 44,043 110,970
Long-term debt........ 1,641 -- 1,641 17,495 19,136
-------- --------- ---------- -------- ----------
Total interest bearing
liabilities.......... $613,074 $ 595,598 $1,208,672 $246,619 $1,455,291
======== ========= ========== ======== ==========
Interest sensitivity gap
For the period........ $ (6,076) $(162,751) $ (168,827) $391,680 $ 222,853
Cumulative............ (6,076) (168,827) (168,827) 222,853 222,853
Cumulative as a percent
of earning assets...... (0.36)% (10.06)% (10.06)% 13.28% 13.28%
</TABLE>
The Company now uses, on a limited basis, interest rate swaps as an
additional tool in managing interest rate risk. As of December 31, 1996, there
was outstanding $10 million in notional principal value of interest rate
swaps. Interest rate swaps involve an exchange of cash flows based on the
notional principal amount and agreed upon fixed and variable interest rates.
In this transaction, the Company has agreed to pay a floating interest rate
based on LIBOR and receive a fixed interest rate in return. The impact on
operations of interest rate swaps was not significant during 1996 and is not
expected to be significant during 1997.
CAPITAL RESOURCES
Total shareholders' equity increased from $133.8 million at December 31,
1995 to $144.8 million at December 31, 1996. The primary source of capital of
the Company is retained earnings. Cash dividends per share were $0.66 per
share for 1995 and $0.74 per share for 1996. The Company retained 45% of its
earnings for 1995 and 64% for 1996.
Regulatory guidelines require bank holding companies, commercial banks, and
thrifts to maintain certain minimum ratios and define companies as "well
capitalized" that sufficiently exceed the minimum ratios. The banking
regulators may alter minimum capital requirements as a result of revising
their internal policies and their ratings of individual institutions. To be
"well capitalized" banks and bank holding companies must maintain a Tier 1
leverage ratio of no less than 5.0%, a Tier 1 risk based ratio of no less than
6.0% and a total risk based ratio of no less than 10.0%. The Company's ratios
as of December 31, 1996 were 7.05%, 9.71% and 10.96%, respectively. The
Company and all banking affiliates met the criteria for "well capitalized" at
December 31, 1996.
As of December 31, 1996, management is not aware of any current
recommendations by banking regulatory authorities which, if they were to be
implemented, would have, or are reasonably likely to have, a material adverse
impact on the Company's liquidity, capital resources, or operations.
Impact of inflation and changing prices
The majority of the Company's assets and liabilities are monetary in nature.
Therefore, the Company differs greatly from most commercial and industrial
companies that have significant investments in nonmonetary assets, such as
fixed assets and inventories. However, inflation does have an important impact
on the growth of assets
21
<PAGE>
in the banking industry and on the resulting need to increase equity capital at
higher than normal rates in order to maintain an appropriate equity to assets
ratio. Inflation also affects other expenses, which tend to rise during periods
of general inflation.
Management believes the most significant impact on financial and operating
results is the Company's ability to react to changes in interest rates.
Management seeks to maintain an essentially balanced position between interest
sensitive assets and liabilities in order to protect against the effects of
wide interest rate fluctuations.
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 31 SEPTEMBER 30 JUNE 30 MARCH 31
- ------------------ ----------- ------------ ------- --------
(IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
1996
Net interest income................. $19,945 $19,123 $18,537 $17,750
Net interest income, taxable
equivalent basis................... 20,490 19,703 19,142 18,346
Provision for loan losses........... 2,108 2,003 1,686 1,488
Noninterest income.................. 3,822 3,696 3,662 3,259
Noninterest expense................. 14,427 13,700 13,639 13,477
Net income.......................... 4,949 4,906 4,737 4,203
PER COMMON SHARE:
Net income, primary................. $ 0.54 $ 0.54 $ 0.52 $ 0.46
Net income, fully diluted........... 0.54 0.54 0.52 0.46
Dividends declared.................. 0.20 0.18 0.18 0.18
COMMON STOCK PRICE:
High................................ $ 26.00 $ 23.75 $ 23.75 $ 22.00
Low................................. 20.25 20.75 20.00 18.50
Last trade.......................... 24.50 22.25 21.75 22.00
SELECTED RATIOS:
Return on average assets,
annualized......................... 1.10% 1.09% 1.09% 0.98%
Return on average common equity,
annualized......................... 13.69% 13.92% 13.98% 12.42%
Net interest margin, annualized..... 4.89% 4.73% 4.78% 4.62%
1995
Net interest income................. $17,437 $16,894 $16,134 $15,569
Net interest income, taxable
equivalent basis................... 18,051 17,620 16,721 16,098
Provision for loan losses........... 1,850 1,615 1,322 1,071
Noninterest income.................. 3,342 2,412 2,696 2,666
Noninterest expense................. 15,869 13,755 13,070 13,177
Net income.......................... 2,266 2,734 2,840 2,973
PER COMMON SHARE:
Net income, primary................. $ 0.25 $ 0.30 $ 0.32 $ 0.34
Net income, fully diluted........... 0.25 0.30 0.32 0.34
Dividends declared.................. 0.18 0.16 0.16 0.16
COMMON STOCK PRICE:
High................................ $ 21.50 $ 23.00 $ 23.50 $ 25.25
Low................................. 19.00 19.50 19.50 22.50
Last trade.......................... 19.25 20.25 20.75 22.50
SELECTED RATIOS:
Return on average assets,
annualized......................... 0.53% 0.65% 0.72% 0.77%
Return on average common equity,
annualized......................... 6.96% 8.39% 8.78% 9.56%
Net interest margin, annualized..... 4.57% 4.47% 4.57% 4.52%
</TABLE>
22
<PAGE>
EXECUTIVE OFFICERS OF THE COMPANY
Set forth below are the executive officers of the Company, their positions
with the Company and the year in which they first became an executive officer
or director.
<TABLE>
<CAPTION>
POSITIONS AND DATE FIRST
OFFICES BECAME DIRECTOR PRESENT
NAME AND AGE CURRENTLY OR EXECUTIVE PRINCIPAL
(1) HELD OFFICER OCCUPATION
- ------------ ------------------------- --------------- -------------------------
<S> <C> <C> <C>
Burlin Cole- Chairman of Board, 1980 Chairman of Board
man; 67 President CEO & Director President & CEO
Brandt Vice Chairman of Board 1980 Vice Chairman
Mullins; 69 & Director
Jean R. Executive Vice President, 1992(2) President &
Hale; 50 Secretary & Director CEO of the Lead Bank
Richard M. Executive Vice President, 1995(3) Executive Vice President,
Levy; 38 CFO & Treasurer CFO & Treasurer
Ralph Executive Vice President, 1995(4) Executive Vice President,
Weickel;39 Sales & Marketing Sales & Marketing
Ronald M. Executive Vice President, 1996(5) President and CEO
Holt; 49 Trust of Trust Company
Mark Gooch; Executive Vice President 1997(6) Executive Vice President
38 Operations Operations
John 1997(7) Executive Vice President
Shropshire; Executive Vice President & Senior Lender
48 & Senior Lender
</TABLE>
- --------
(1) The ages listed for the Company's executive officers are as of February
28, 1997.
(2) Prior to becoming an executive officer, Ms. Hale served as Vice President
of the Company and as an executive officer of the Lead Bank since 1988.
(3) Mr. Levy served as Senior Vice President and Controller of Bank of America
Texas, N.A. prior to joining the Company.
(4) Mr. Weickel served as Vice President of the Company prior to becoming an
executive officer. Mr. Weickel served as Vice President, Manager of
Investments, for Boatmen's National Bank of Des Moines, NA, prior to
joining the Company in 1993.
(5) Mr. Holt served as Executive Vice President and Trust Manager of Bank One
Kentucky Corporation prior to joining the Company.
(6) Mr. Gooch served as President and Chief Executive Officer of First
Security Bank & Trust Co., Whitesburg, Kentucky, an affiliate of the
Company until merger with the Lead Bank prior to becoming an executive
officer.
(7) Mr. Shropshire served as President and Chief Executive Officer of Farmers-
Deposit Bank, Flemingsburg, Kentucky, an affiliate of the Company until
merger with the Lead Bank prior to becoming an executive officer.
23
<PAGE>
DIRECTORS OF THE COMPANY
The Company's directors are elected at each annual meeting of the
shareholders and hold office until the next election of directors or until
their successors are duly elected and qualify. The persons named below, all of
whom currently serve as directors of the Company, have been nominated for
election to serve until the 1998 Annual Meeting of Shareholders. The following
table sets forth certain information respecting the persons nominated to be
directors of the Company:
<TABLE>
<CAPTION>
AMOUNT AND
POSITIONS NATURE OF
NAME AND AND DIRECTOR PRINCIPAL BENEFICIAL PERCENT
AGE (1) OFFICES SINCE OCCUPATION (2) OWNERSHIP (3) OF CLASS
- ---------- --------------- -------- ---------------------- ------------- --------
<S> <C> <C> <C> <C> <C>
Charles J. Director 1988 Baird, Baird, Baird & 71,593(4) *
Baird; 47 Jones, P.S.C.,
Attorneys
Burlin Chairman of 1980 Chairman of Board of 389,483(6) 4.3%
Coleman; Board of Directors, President &
67(5) Directors, CEO--Community
President & CEO Trust Bancorp, Inc.
Nick A. Director 1980 President--Unit Coal 31,645 *
Cooley; Corporation
63
William A. Director 1990 Chairman of the 100,970(7) 1.1%
Graham, Advisory Board--
Jr.; 60 Fleming County
Region--Community
Trust Bank, N.A.
Jean R. Executive VP, 1993 President & CEO-- 26,548(8) *
Hale; 50(5) Secretary & Community Trust
Director Bank, N.A.
Brandt Vice Chairman & 1980 Retired President- 71,069(9) *
Mullins; Director Community Trust
69(5) Bank, NA
M. Lynn Director 1993 President--Knott Floyd 55,091(10) *
Parrish; Land Co., Inc.
47
Ernest M. Director 1980 President and General 54,067(11) *
Rogers; Manager--Rogers
69 Petroleum Services,
Inc.
Porter P. Director 1995 Chairman of the 40,635(12) *
Welch; 71 Advisory Board--
Woodford County
Region--Community
Trust Bank, NA
All direc- 857,465(13)
tors as a
group 9.4%
</TABLE>
(see footnotes on the next page)
24
<PAGE>
- --------
* Less than 1 percent.
(1) The ages listed for the Directors of the Company are as of February 28,
1997.
(2) Each of the nominees has been engaged in the principal occupation
specified above for five years or more.
(3) Under the rules of the Commission, a person is deemed to beneficially own
a security if the person has or shares the power to vote or direct the
voting of such security, or the power to dispose or to direct the
disposition of such security. A person is also deemed to beneficially own
any shares which that person has the right to acquire beneficial
ownership within sixty days. Shares of common stock subject to options
exercisable within sixty days are deemed outstanding for computing the
percentage of class of the person holding such options but are not deemed
outstanding for computing the percentage of class for any other person.
Unless otherwise indicated, the named persons have sole voting and
investment power with respect to shares held by them.
(4) Includes 35,093 shares in trust for W.J. Baird's grandchildren over which
Mr. Baird is trustee with the power to vote and invest such shares.
(5) Burlin Coleman is also a director of the Lead Bank, the Savings Bank and
Trust Company of Kentucky. Jean Hale is also a director of and Trust
Company of Kentucky. Brandt Mullins is also a director of West Liberty.
(6) Includes the following shares beneficially owned by Burlin Coleman:
253,671 shares held in trust over which Mr. Coleman has sole voting and
investment power; 53,999 shares in which Mr. Coleman shares voting power
pursuant to a power of attorney; 395 shares held directly by Mr. Coleman;
and 81,418 shares held in IRA over which Mr. Coleman has sole voting and
investment power. Excludes 8,770 shares held by Mr. Coleman's wife, over
which Mr. Coleman has no voting or investment power.
(7) Includes 5,709 shares that Mr. Graham may acquire pursuant to options
exercisable within sixty days of the Record Date and 868 shares held in
the ESOP, which Mr. Graham has the power to vote.
(8) Includes 8,995 shares which Mrs. Hale may acquire pursuant to options
exercisable within sixty days of the Record Date and 2,214 shares held in
the ESOP, which Mrs. Hale has the power to vote. Excludes 4,625 shares
held by Mrs. Hale's husband, over which Mrs. Hale has no voting or
investment power.
(9) Includes 68,444 shares held in trust, which Mr. Mullins has the power to
vote. Excludes 21,375 shares held by Mr. Mullins' wife, over which Mr.
Mullins has no voting or investment power.
(10) Excludes 600 shares held by Mr. Parrish's wife as custodian for their
minor child, over which Mr. Parrish has no voting or investment power.
(11) Excludes 15,674 shares held by Mr. Rogers' wife, over which Mr. Rogers
has no voting or investment power.
(12) Excludes 40,000 shares held by Mr. Welch's wife, over which Mr. Welch has
no voting or investment power.
(13) Includes 16,364 shares which may be acquired by all directors as a group
pursuant to options exercisable within sixty days of March 15, 1997.
25
<PAGE>
SELECTED STATISTICAL INFORMATION
The following tables set forth certain statistical information relating to
the Company and its subsidiaries on a consolidated basis and should be read
together with the consolidated financial statements of the Company.
CONSOLIDATED AVERAGE BALANCE SHEETS AND TAXABLE EQUIVALENT INCOME/EXPENSE AND
YIELDS/RATES
<TABLE>
<CAPTION>
1996 1995 1994
---------------------------- ---------------------------- ----------------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
BALANCES INTEREST RATE BALANCES INTEREST RATE BALANCES INTEREST RATE
---------- -------- ------- ---------- -------- ------- ---------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Loans, net of unearned
(1)(2)(3).............. $1,215,243 $119,370 9.82% $1,021,637 $101,511 9.94% $ 872,045 $ 78,911 9.05%
Securities
U.S. Treasuries and
agencies.............. 277,641 17,641 6.35 301,263 19,123 6.35 316,552 18,794 5.94
State & political
subdivisions(3)....... 57,652 4,568 7.92 55,263 4,668 8.45 52,344 4,692 8.96
Other securities....... 72,610 4,655 6.41 78,510 5,011 6.38 73,951 4,370 5.91
Federal funds sold...... 8,490 483 5.69 50,398 3,057 6.07 47,488 1,996 4.20
Interest bearing
deposits............... 896 56 6.25 1,469 112 7.62 3,370 207 6.14
---------- -------- ---- ---------- -------- ---- ---------- -------- ----
Total earning assets.... $1,632,532 $146,773 8.99% $1,508,540 $133,482 8.86% $1,365,750 $108,970 7.98%
Less:
Allowance for loan
losses................ (17,637) (15,336) (13,444)
---------- ---------- ----------
1,614,895 1,493,204 1,352,306
NON-EARNING ASSETS
Cash and due from banks. 54,120 50,846 45,173
Premises and equipment,
net.................... 46,460 43,725 38,403
Other assets............ 46,534 43,148 34,748
---------- ---------- ----------
Total assets............ $1,762,009 $1,630,923 $1,470,630
========== ========== ==========
INTEREST BEARING
LIABILITIES
Deposits
Savings and demand
deposits.............. $ 422,158 $ 12,722 3.01% $ 386,956 $ 12,166 3.14% $ 392,784 $ 11,446 2.91%
Time deposits.......... 861,566 47,854 5.55 804,884 44,507 5.53 671,863 28,443 4.23
Federal funds purchased
and securities sold
under repurchase
agreements............. 25,363 1,258 4.96 25,934 1,435 5.53 30,208 1,234 4.09
Other short-term
borrowings............. 17 1 5.88 1,443 78 5.41 2,935 90 3.07
Advances from Federal
Home Loan Bank......... 90,666 5,356 5.91 71,917 4,506 6.27 68,022 4,132 6.07
Long-term debt.......... 22,795 1,901 8.34 27,328 2,300 8.42 26,739 2,025 7.57
---------- -------- ---- ---------- -------- ---- ---------- -------- ----
Total interest bearing
liabilities............ $1,422,565 $ 69,092 4.86% $1,318,462 $ 64,992 4.93% $1,192,551 $ 47,370 3.97%
---------- -------- ---- ---------- -------- ---- ---------- -------- ----
NONINTEREST BEARING
LIABILITIES
Demand deposits......... 184,071 168,108 151,897
Other liabilities....... 16,448 13,573 10,017
Total liabilities....... 1,623,084 1,500,143 1,354,465
---------- ---------- ----------
Shareholders' equity.... 138,925 130,780 116,165
---------- ---------- ----------
Total liabilities and
shareholders' equity... $1,762,009 $1,630,923 $1,470,630
========== ========== ==========
Net interest income..... $ 77,681 $ 68,490 $ 61,600
======== ======== ========
Net interest spread..... 4.13% 3.93% 4.01%
==== ==== ====
Benefit of interest free
funding................ 0.63% 0.61% 0.50%
==== ==== ====
Net interest margin..... 4.76% 4.54% 4.51%
==== ==== ====
</TABLE>
- -------
(1)Interest includes fees on loans of $4,289, $3,203 and $2,300 in 1996, 1995
and 1994, respectively.
(2)Loan balances include principal balances on nonaccrual loans.
(3)Tax exempt income on securities and loans is reported on a fully taxable
equivalent basis using a 35% rate.
26
<PAGE>
NET INTEREST DIFFERENTIAL
The following table illustrates the approximate effect on net interest
differentials of volume and rate changes between 1996 and 1995 and also
between 1995 and 1994.
<TABLE>
<CAPTION>
TOTAL CHANGE CHANGE DUE TO TOTAL CHANGE CHANGE DUE TO
------------ ---------------- ------------ ----------------
1996/1995 VOLUME RATE 1995/1994 VOLUME RATE
------------ ------- ------- ------------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans................. $17,859 $19,030 $(1,171) $22,600 $14,380 $ 8,220
U. S. Treasury and
federal agencies..... (1,482) (1,482) -- 329 (931) 1,260
Tax exempt state and
political
subdivisions......... (100) 197 (297) (24) 255 (279)
Other securities...... (356) (379) 23 641 278 363
Federal funds sold.... (2,574) (2,395) (179) 1,061 130 931
Interest bearing
deposits............. (56) (39) (17) (95) (137) 42
------- ------- ------- ------- ------- -------
Total interest income. 13,291 14,932 (1,641) 24,512 13,975 10,537
INTEREST EXPENSE
Savings and demand
deposits............. 556 1,075 (519) 720 (171) 891
Time deposits......... 3,347 3,146 201 16,064 6,309 9,755
Federal funds
purchased and
securities sold under
repurchase
agreements........... (177) (31) (146) 201 (192) 393
Other short-term
borrowings........... (77) (119) 42 (12) (60) 48
Advances from Federal
Home Loan Bank....... 850 1,120 (270) 374 241 133
Long-term debt........ (399) (378) (21) 275 46 229
------- ------- ------- ------- ------- -------
Total interest
expense.............. 4,100 4,813 (713) 17,622 6,173 11,449
------- ------- ------- ------- ------- -------
Net interest income..... $ 9,191 $10,119 $ (928) $ 6,890 $ 7,802 $ (912)
======= ======= ======= ======= ======= =======
</TABLE>
For purposes of the above table, changes which are not solely due to rate or
volume are allocated based on a percentage basis, using the absolute values of
rate and volume variance as a basis for percentages. Income is stated at a
fully taxable equivalent basis, assuming a 35% tax rate.
INVESTMENT PORTFOLIO
The maturity distribution and weighted average interest rates of securities
at December 31, 1996 is as follows:
<TABLE>
<CAPTION>
ESTIMATED MATURITY AT DECEMBER 31, 1996
--------------------------------------------------------------------------------------
AFTER 10 TOTAL FAIR
WITHIN 1 YEAR 1-5 YEARS 5-10 YEARS YEARS VALUE AMORTIZED
------------- -------------- ------------- ------------- -------------- COST
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT
------- ----- -------- ----- ------- ----- ------- ----- -------- ----- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Available-for-sale
U. S. Treasury......... $16,205 6.23% $ 21,186 6.39% $ -- 0.00% $ -- 0.00% $ 37,391 6.28% $ 37,139
U. S. government
agencies and
corporations.......... 10,874 6.99 105,501 7.06 10,228 6.60 7,314 10.41 133,917 7.20 134,217
State and municipal
obligations........... -- 0.00 15 7.57 -- 0.00 -- 0.00 15 7.57 15
Other securities....... 27,656 5.97 5,561 6.62 11,968 6.44 13,444 6.73 58,629 6.30 59,562
------- ---- -------- ---- ------- ---- ------- ----- -------- ---- --------
Total................... $54,735 6.25% $132,263 6.93% $22,196 6.51% $20,758 8.03% $229,952 6.82% $230,933
------- ---- -------- ---- ------- ---- ------- ----- -------- ---- --------
</TABLE>
27
<PAGE>
<TABLE>
<CAPTION>
ESTIMATED MATURITY AT DECEMBER 31, 1996
--------------------------------------------------------------------------------------
AFTER 10 TOTAL FAIR
WITHIN 1 YEAR 1-5 YEARS 5-10 YEARS YEARS VALUE AMORTIZED
------------- -------------- ------------- ------------- -------------- COST
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT
------- ----- -------- ----- ------- ----- ------- ----- -------- ----- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Held-to-maturity
U. S. government
agencies and
corporations........... $ 3,414 4.67% $ 57,160 5.82% $11,498 4.53% $ -- 0.00% $ 72,072 5.56% $69,495
State and municipal
obligations........... 1,241 9.00 20,211 7.28 21,058 7.08 11,581 8.93 54,091 7.59 54,563
Other securities....... 0 0.00 11,570 5.86 -- 0.00 -- 0.00 11,570 5.86 11,325
------- ---- -------- ---- ------- ---- ------- ---- -------- ---- -------
Total................... $ 4,655 5.82% $ 88,941 6.16% $32,556 6.18% $11,581 8.93% $137,733 6.38% 135,383
------- ---- -------- ---- ------- ---- ------- ---- -------- ---- -------
Total Securities........ $59,390 6.22% $221,204 6.62% $54,752 6.32% $32,339 8.35% $367,685 6.66% --
======= ==== ======== ==== ======= ==== ======= ==== ======== ==== =======
</TABLE>
The calculations of the weighted average interest rates for each maturity
category are based on yield weighted by the respective costs of the
securities. The weighted average rates on state and political subdivisions are
computed on a taxable equivalent basis using a 35% tax rate. For purposes of
the above presentation, maturities of mortgage-backed pass through
certificates and collateralized mortgage obligations are based on estimated
maturities.
Excluding those holdings of the investment portfolio in U.S. Treasury
securities and other agencies of the U.S. Government, there were no securities
of any one issuer which exceeded 10% of the shareholder's equity of the
Company at December 31, 1996.
LOAN PORTFOLIO
<TABLE>
<CAPTION>
DECEMBER 31 (IN THOUSANDS)
----------------------------------------------------
1996 1995 1994 1993 1992
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Commercial:
Secured by real
estate............... $ 270,315 $ 258,541 $235,611 $210,514 $221,646
Other................. 234,793 192,127 183,533 196,296 175,850
---------- ---------- -------- -------- --------
Total commercial.... 505,108 450,668 419,144 406,810 397,496
---------- ---------- -------- -------- --------
Real estate
construction........... 79,069 51,539 45,308 34,241 26,058
Real estate mortgage.... 411,067 398,288 290,998 274,017 291,318
Consumer................ 310,582 208,662 143,085 128,995 124,569
Equipment lease
financing.............. 3,797 5,911 7,919 9,872 14,130
---------- ---------- -------- -------- --------
Total loans......... $1,309,623 $1,115,068 $906,454 $853,935 $853,661
========== ========== ======== ======== ========
Percent of total year-
end loans
Commercial:
Secured by real
estate............... 20.64% 23.19% 25.99% 24.65% 25.96%
Other................. 17.93 17.23 20.25 22.99 20.60
---------- ---------- -------- -------- --------
Total commercial.... 38.57 40.42 46.24 47.64 46.56
Real estate
construction........... 6.04 4.62 5.00 4.01 3.05
Real estate mortgage.... 31.39 35.72 32.10 32.09 34.13
Consumer................ 23.71 18.71 15.79 15.10 14.60
Equipment lease
financing.............. 0.29 0.53 0.87 1.16 1.66
---------- ---------- -------- -------- --------
Total loans......... 100.00% 100.00% 100.00% 100.00% 100.00%
========== ========== ======== ======== ========
</TABLE>
The total loans above are net of unearned income.
28
<PAGE>
The following table shows the amounts of loans (excluding residential
mortgages of 1-4 family residences, consumer loans and lease financing) which,
based on the remaining scheduled repayments of principal are due in the
periods indicated. Also, the amounts are classified according to sensitivity
to changes in interest rates (fixed, variable).
<TABLE>
<CAPTION>
MATURITY AT DECEMBER 31, 1996
(IN THOUSANDS)
-----------------------------------
AFTER
ONE BUT
WITHIN AFTER
WITHIN FIVE FIVE
ONE YEAR YEARS YEARS TOTAL
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Commercial, financial and agricultural...... $138,073 $164,337 $202,698 $505,108
Real estate--construction................... 24,097 28,664 26,308 79,069
-------- -------- -------- --------
$162,170 $193,001 $229,006 $584,177
======== ======== ======== ========
Rate sensitivity
Predetermined rate.......................... $ 38,819 $ 59,547 $ 47,059 $145,425
Adjustable rate............................. 123,351 133,454 181,947 438,752
-------- -------- -------- --------
$162,170 $193,001 $229,006 $584,177
======== ======== ======== ========
</TABLE>
NONPERFORMING ASSETS
<TABLE>
<CAPTION>
DECEMBER 31 (IN THOUSANDS)
-------------------------------------------
1996 1995 1994 1993 1992
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans.................. $10,156 $ 9,433 $ 8,829 $11,186 $ 5,417
Restructured loans................ 630 918 -- -- 4,022
90 days or more past due and still
accruing interest................ 5,800 3,947 3,401 3,637 4,875
------- ------- ------- ------- -------
Total nonperforming loans....... 16,586 14,298 12,230 14,823 14,314
Foreclosed properties............. 1,059 1,927 4,320 3,635 7,061
------- ------- ------- ------- -------
Total nonperforming assets...... $17,645 $16,225 $16,550 $18,458 $21,375
======= ======= ======= ======= =======
Nonperforming assets to total
loans plus foreclosed properties. 1.35% 1.45% 1.83% 2.18% 2.51%
Allowance to nonperforming loans.. 113.50 112.47 106.12 90.04 95.96
</TABLE>
Nonaccrual, past due and restructured loans
<TABLE>
<CAPTION>
AS A % AS A % ACCRUING AS A %
OF LOAN OF LOAN LOANS OF LOAN
BALANCES BALANCES PAST DUE BALANCES
NONACCRUAL BY RESTRUCTURED BY 90 DAYS BY
LOANS CATEGORY LOANS CATEGORY OR MORE CATEGORY BALANCES
(IN THOUSANDS) ---------- -------- ------------ -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
DECEMBER 31, 1996
Commercial loans--real
estate secured......... $ 4,817 1.78% $409 0.15% $1,266 0.47% $ 270,315
Commercial loans--other. 3,217 1.35 221 0.09 1,398 0.59 238,590
Consumer loans--real
estate secured......... 1,690 0.34 -- -- 2,225 0.45 490,136
Consumer loans--other... 432 0.14 -- -- 911 0.29 310,582
------- ---- ---- ---- ------ ---- ----------
Total.................. $10,156 0.78% $630 0.05% $5,800 0.44% $1,309,623
======= ==== ==== ==== ====== ==== ==========
DECEMBER 31, 1995
Commercial loans--real
estate secured......... $ 3,264 1.26% $918 0.36% $1,428 0.55% $ 258,541
Commercial loans--other. 3,048 1.54 -- -- 237 0.12 198,038
Consumer loans--real
estate secured......... 2,873 0.64 -- -- 1,335 0.30 449,827
Consumer loans--other... 248 0.12 -- -- 947 0.45 208,662
------- ---- ---- ---- ------ ---- ----------
Total.................. $ 9,433 0.85% $918 0.08% $3,947 0.35% $1,115,068
======= ==== ==== ==== ====== ==== ==========
</TABLE>
The allowance for loan losses balance is maintained by management at a level
considered adequate to cover anticipated losses that are based on past loss
experience, general economic conditions, information about specific
29
<PAGE>
borrower situations including their financial position and collateral values,
and other factors and estimates which are subject to change over time.
In 1996, gross interest income that would have been recorded on nonaccrual
loans had the loans been current in accordance with their original terms
amounted to $1.1 million. Interest income actually recorded and included in net
income for the period was $0.3 million, leaving $0.8 million of interest income
not recognized during the period.
Discussion of the Nonaccrual Policy
The accrual of interest income on loans is discontinued when the collection
of interest and principal in full is not expected. When interest accruals are
discontinued, interest income accrued in the current period is reversed. Any
loans past due 90 days or more must be well secured and in the process of
collection to continue accruing interest.
Potential Problem Loans
When management has serious doubts as to the ability of borrowers to comply
with repayment terms, the loans are placed on nonaccrual status.
Foreign Outstandings
None
Loan Concentrations
The Company has no concentration of loans exceeding 10% of total loans which
is not otherwise disclosed at December 31, 1996.
30
<PAGE>
ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES (IN THOUSANDS)
<TABLE>
<CAPTION>
1996 1995 1994 1993 1992
---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Allowance for loan
losses, beginning of
year................... $ 16,082 $ 12,978 $ 13,346 $ 13,736 $ 11,530
Loans charged off:
Commercial, secured
by real estate...... 378 1,278 1,442 1,538 1,831
Commercial, other.... 1,136 1,646 3,902 2,140 2,210
Real Estate Mortgage. 880 514 407 598 1,005
Consumer loans....... 4,594 2,594 1,786 1,606 1,377
---------- ---------- -------- -------- --------
Total charge-offs.. 6,988 6,032 7,537 5,882 6,423
Recoveries of loans
previously charged
off:
Commercial, secured
by real estate...... 174 159 12 147 152
Commercial, other.... 609 331 395 333 503
Real Estate Mortgage. 312 44 66 58 135
Consumer loans....... 1,351 740 630 512 528
---------- ---------- -------- -------- --------
Total recoveries... 2,446 1,274 1,103 1,050 1,318
Net charge-offs:
Commercial, secured
by real estate...... 204 1,119 1,430 1,391 1,679
Commercial, other.... 527 1,315 3,507 1,807 1,707
Real Estate Mortgage. 568 470 341 540 870
Consumer loans....... 3,243 1,854 1,156 1,094 849
---------- ---------- -------- -------- --------
Total net charge-
offs.............. 4,542 4,758 6,434 4,832 5,105
Allowance of acquired
banks................ 0 2,004 0 0 0
Provisions charged
against operations... 7,285 5,858 6,066 4,442 7,311
---------- ---------- -------- -------- --------
Balance, end of year.... $ 18,825 $ 16,082 $ 12,978 $ 13,346 $ 13,736
========== ========== ======== ======== ========
Allocation of allowance,
end of year Commercial,
secured by real estate. $ 3,305 $ 3,095 $ 3,649 $ 2,650 $ 2,812
Commercial, other..... 2,870 2,300 2,349 1,921 2,130
Real Estate
Construction......... 152 135 93 57 186
Real Estate Mortgage.. 790 1,044 905 1,659 1,945
Consumer.............. 2,248 1,574 1,291 1,271 1,475
Equipment lease
financing............ 46 71 108 91 147
Unallocated........... 9,414 7,863 4,583 5,697 5,041
---------- ---------- -------- -------- --------
Balance, end of year.... $ 18,825 $ 16,082 $ 12,978 $ 13,346 $ 13,736
========== ========== ======== ======== ========
Allocation of allowance,
end of year Commercial,
secured by real estate. $ 3,305 $ 3,095 $ 3,649 $ 2,650 $ 2,812
Commercial, other..... 2,807 2,300 2,349 1,921 2,130
Real Estate
Construction......... 152 135 93 57 186
Real Estate Mortgage.. 790 1,044 905 1,659 1,945
Consumer.............. 2,248 1,574 1,291 1,271 1,457
Equipment lease
financing............ 46 71 108 91 147
Unallocated........... 9,414 7,863 4,583 5,697 5,041
---------- ---------- -------- -------- --------
Balance, end of year.... $ 18,825 $ 16,082 $ 12,978 $ 13,346 $ 13,736
========== ========== ======== ======== ========
Average loans
outstanding, net of
unearned interest...... $1,215,243 $1,021,637 $872,045 $849,202 $857,532
Loans outstanding at end
of year, net of
unearned interest...... $1,309,623 $1,115,068 $906,454 $853,935 $853,661
Net charge-offs to
average loan type
Commercial, secured by
real estate.......... 0.08% 0.39% 0.60% 0.59% 0.95%
Commercial, other..... 0.24% 0.66% 0.94% 0.96% 0.80%
Real Estate Mortgage.. 0.12% 0.13% 0.13% 0.18% 0.41%
Consumer loans........ 1.27% 1.02% 0.78% 0.62% 0.57%
Total................ 0.37% 0.47% 0.74% 0.57% 0.60%
Other ratios
Allowance to net
loans, end of year... 1.44% 1.44% 1.43% 1.56% 1.61%
Provision for loan
losses to average
loans................ 0.60% 0.57% 0.70% 0.82% 0.84%
</TABLE>
Management uses an internal analysis to determine the adequacy of the loan
loss reserve and charges to the provision for loan losses. This analysis is
based on net charge-off experience for prior years, current delinquency levels
and risk factors based on the local economy and relative experience of the
lending staff. This analysis is completed quarterly and forms the basis for
allocation of the loan loss reserve and what charges to provision may be
required.
31
<PAGE>
AVERAGE DEPOSITS AND OTHER BORROWED FUNDS
<TABLE>
<CAPTION>
1996 1995 1994
---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
DEPOSITS:
Non-interest bearing deposits............... $ 184,071 $ 168,108 $ 151,897
NOW accounts................................ 170,410 151,781 132,270
Money market deposits....................... 94,653 82,733 76,053
Savings..................................... 157,094 152,442 184,461
Certificates of deposit > $100,000.......... 265,005 242,081 174,532
Certificates of deposit < $100,000 and other
time deposits.............................. 596,560 562,803 497,331
---------- ---------- ----------
Total Deposits............................ $1,467,793 $1,359,948 $1,216,544
OTHER BORROWED FUNDS:
Federal funds purchased and securities sold
under repurchase agreements................ $ 25,363 $ 25,934 $ 30,208
Other short-term borrowings................. 17 1,443 2,935
Advances from Federal Home Loan Bank........ 90,666 71,917 68,022
Long-term debt.............................. 22,795 27,328 26,739
---------- ---------- ----------
Total Other Borrowed Funds.............. 138,841 126,622 127,904
Total Deposits and Other Borrowed Funds. $1,606,634 $1,486,570 $1,344,448
========== ========== ==========
</TABLE>
Maturities of time deposits of $100,000 or more outstanding at December 31,
1996 are summarized as follows:
<TABLE>
<CAPTION>
CERTIFICATES TIME
OF DEPOSIT DEPOSITS TOTAL
------------ -------- --------
(IN THOUSANDS)
<S> <C> <C> <C>
3 months or less................................ $ 70,360 $ 0 $ 70,360
Over 3 through 6 months......................... 65,493 4,796 70,289
Over 6 through 12 months........................ 66,390 0 66,390
Over 12 through 60 months....................... 54,451 0 54,451
Over 60 months.................................. 4,906 0 4,906
-------- ------ --------
$261,600 $4,796 $266,396
======== ====== ========
</TABLE>
SHORT-TERM BORROWINGS
The Company did not have any category of short-term borrowings for which the
average balance outstanding during the reported periods was 30% or more of
shareholders' equity at the end of the reported periods.
32
<PAGE>
DESCRIPTION OF THE PREFERRED SECURITIES
The Preferred Securities will be issued pursuant to the terms of the CTBI
Trust Agreement. The CTBI Trust Agreement is qualified as an indenture under
the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Initially, State Street Bank and Trust Company will be the Property Trustee and
will act as trustee for the purpose of complying with the Trust Indenture Act.
The terms of the Preferred Securities will include those stated in the CTBI
Trust Agreement and those made part of the CTBI Trust Agreement by the Trust
Indenture Act. This summary of the material terms and provisions of the
Preferred Securities and the CTBI Trust Agreement does not purport to be
complete and is subject to, and is qualified in its entirety by reference to,
all the provisions of the CTBI Trust Agreement, including the definitions
therein of certain terms, and the Trust Indenture Act. Wherever particular
defined terms of the CTBI Trust Agreement (as amended or supplemented from time
to time) are referred to herein, such defined terms are incorporated by
reference herein. The form of the CTBI Trust Agreement has been filed as an
exhibit to the Registration Statement of which this Prospectus forms a part.
GENERAL
Pursuant to the terms of the CTBI Trust Agreement, the Administrative
Trustees, on behalf of CTBI Trust, will issue the Preferred Securities and the
Common Securities (collectively, the "Trust Securities"). The Preferred
Securities will represent undivided preferred beneficial interests in CTBI
Trust and the holders thereof will be entitled to a preference in certain
circumstances with respect to Distributions and amounts payable on redemption
or liquidation over the Common Securities of CTBI Trust, as well as other
benefits as described in the CTBI Trust Agreement. The Preferred Securities
will rank pari passu, and payments will be made thereon pro rata, with the
Common Securities of CTBI Trust except as described under "--Subordination of
Common Securities."
Legal title to the Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the Preferred Securities and
Common Securities. The Guarantee executed by the Company for the benefit of the
holders of the Preferred Securities will be a guarantee on a subordinated basis
with respect to the Preferred Securities, but will not guarantee payment of
Distributions or amounts payable on redemption or liquidation of such Preferred
Securities when CTBI Trust does not have funds on hand available to make such
payments. See "Description of Guarantee."
DISTRIBUTIONS
Payment of Distributions. Distributions on each Preferred Security will be
payable at the annual rate of % of the stated Liquidation Amount of $25,
accruing from the date of original issuance and payable quarterly in arrears on
March 31, June 30, September 30 and December 31 of each year, to the holders of
the Preferred Securities on the relevant record dates (each date on which
Distributions are payable in accordance with the foregoing, a "Distribution
Date"). The record date will be, for so long as the Preferred Securities remain
in book-entry form, one Business Day prior to the relevant Distribution Date
and, in the event the Preferred Securities are not in book-entry form, the 15th
day of the month in which the relevant Distribution Date occurs. Distributions
will accumulate from the date of original issuance. The first Distribution Date
for the Preferred Securities will be June 30, 1997. The amount of Distributions
payable for any period will be computed on the basis of a 360-day year of
twelve 30-day months. In the event that any date on which Distributions are
payable on the Preferred Securities is not a Business Day, then payment of the
Distributions payable on such date will be made on the next succeeding day that
is a Business Day (and without any additional Distributions, interest or other
payment in respect of any such delay), in each case with the same force and
effect as if made on the date such payment was originally payable. As used in
this Prospectus, a "Business Day" shall mean any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York are
authorized or required by law or executive order to remain closed or a day on
which the corporate trust office of the Property Trustee or the Debenture
Trustee is closed for business.
33
<PAGE>
Extension Period. So long as no Event of Default under the Indenture has
occurred and is continuing, the Company has the right under the Indenture to
defer the payment of interest on the Subordinated Debentures at any time and
from time to time for a period not exceeding 20 consecutive quarters with
respect to each such period (each, an "Extension Period"), provided that no
Extension Period may extend beyond the Stated Maturity of the Subordinated
Debentures. As a consequence of any such election, quarterly Distributions on
the Preferred Securities will be deferred by CTBI Trust during any such
Extension Period. Distributions to which holders of the Preferred Securities
are entitled will accumulate additional Distributions thereon at the rate per
annum of % thereof, compounded quarterly from the relevant Distribution
Date. The term "Distributions" as used herein shall include any such
additional Distributions. During any such Extension Period, the Company may
not, and may not permit any subsidiary of the Company to, (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Subordinated Debentures or make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any subsidiary of the Company if such guarantee ranks pari passu
with or junior in interest to the Subordinated Debentures (other than (a)
dividends or distributions in Company common stock, (b) any declaration of a
dividend in connection with the implementation of a shareholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption
or repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee and (d) purchases of common stock under any of the Company's benefit
plans for its directors, officers or employees). Prior to the termination of
any such Extension Period, the Company may defer the payment of interest,
provided that no Extension Period may exceed 20 consecutive quarters, or
extend beyond the Stated Maturity of the Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due, the Company may elect to begin a new Extension Period. Subject to the
foregoing, there is no limitation on the number of times that the Company may
elect to begin an Extension Period.
The Company has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the
Subordinated Debentures.
Cumulative Distributions. The funds of CTBI Trust available for distribution
to holders of its Preferred Securities will be limited to payments under the
Subordinated Debentures. See "Description of Subordinated Debentures." If the
Company does not make interest payments on the Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Preferred Securities. The payment of Distributions (if and to the extent CTBI
Trust has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Company. See
"Description of Guarantee."
REDEMPTION
The Company will have the right to redeem the Subordinated Debentures (i) on
or after March 31, 2007, in whole at any time or in part from time to time, or
(ii) at any time, in whole (but not in part), upon the occurrence of a Tax
Event, an Investment Company Event or a Capital Event, in each case subject to
receipt of prior approval by the Federal Reserve if then required under
applicable capital guidelines or policies of the Federal Reserve.
Mandatory Redemption. Upon the repayment or redemption, in whole or in part,
of any Subordinated Debentures, whether at Stated Maturity or upon earlier
redemption as provided in the Indenture, the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a Like Amount
(as defined below) of the Trust Securities, upon not less than 30 nor more
than 60 days notice, at a redemption price (the "Redemption Price") equal to
the aggregate Liquidation Amount of such Trust Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption
Date"). See "Description of Subordinated Debentures--Redemption." If less than
all of the Subordinated Debentures are to be repaid or redeemed on a
Redemption Date, then the proceeds from such repayment or redemption shall be
allocated to the redemption of the Preferred Securities and the Common
Securities pro rata.
34
<PAGE>
Distribution of Subordinated Debentures. Subject to the Company having
received prior approval of the Federal Reserve if so required under applicable
capital guidelines or policies of the Federal Reserve, the Company will have
the right at any time to liquidate CTBI Trust and, after satisfaction of the
liabilities of creditors of CTBI Trust as provided by applicable law, cause
the Subordinated Debentures to be distributed to the holders of Preferred
Securities and Common Securities in the liquidation of CTBI Trust.
Tax Event Redemption, Investment Company Event Redemption or Capital Event
Redemption. If a Tax Event, an Investment Company Event or a Capital Event in
respect of the Preferred Securities and Common Securities shall occur and be
continuing, the Company has the right to redeem the Subordinated Debentures in
whole (but not in part) and thereby cause a mandatory redemption of the %
Preferred Securities and Common Securities in whole (but not in part) at the
Redemption Price within 90 days following the occurrence of such Tax Event,
Investment Company Event or Capital Event. In the event a Tax Event,
Investment Company Event or Capital Event in respect of the Preferred
Securities and Common Securities has occurred and is continuing and the
Company does not elect to redeem the Subordinated Debentures and thereby cause
a mandatory redemption of such Preferred Securities and Common Securities or
to liquidate CTBI Trust and cause the Subordinated Debentures to be
distributed to holders of such Preferred Securities and Common Securities in
liquidation of CTBI Trust as described below, such Preferred Securities will
remain outstanding and, in the event of a Tax Event (but not an Investment
Company Event or a Capital Event) Additional Sums (as defined below) may be
payable on the Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in order
that the amount of Distributions then due and payable by CTBI Trust on the
outstanding Preferred Securities and Common Securities of CTBI Trust shall not
be reduced as a result of any additional taxes, duties and other governmental
charges to which CTBI Trust has become subject as a result of a Tax Event.
"Like Amount" means (i) with respect to a redemption of Trust Securities,
Trust Securities having a Liquidation Amount (as defined below) equal to that
portion of the principal amount of Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Preferred Securities based upon the relative
aggregate Liquidation Amounts of such classes and the proceeds of which will
be used to pay the Redemption Price of such Trust Securities, and (ii) with
respect to a distribution of Subordinated Debentures to holders of Trust
Securities in connection with a dissolution or liquidation of CTBI Trust,
Subordinated Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the holder to whom such Subordinated
Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
Redemption Procedures. Preferred Securities redeemed on each Redemption Date
shall be redeemed at the Redemption Price with the applicable proceeds from
the contemporaneous redemption of the Subordinated Debentures. Redemptions of
the Preferred Securities shall be made and the Redemption Price shall be
payable on each Redemption Date only to the extent that CTBI Trust has funds
on hand available for the payment of such Redemption Price. See also
"Description of Preferred Securities--Subordination of Common Securities."
If CTBI Trust gives a notice of redemption in respect of its Preferred
Securities, then, by 12:00 noon, Eastern Standard Time, on the Redemption
Date, to the extent funds are available, the Property Trustee, in its capacity
as paying agent, will pay the Redemption Price to the holders of such
Preferred Securities. See "Book-Entry Issuance." If such Preferred Securities
are no longer in book-entry form, the Property Trustee, to the extent funds
are available, will irrevocably deposit with the paying agent for such
Preferred Securities funds sufficient to pay the aggregate Redemption Price
and will give such paying agent irrevocable instructions and authority to pay
the Redemption Price to the holders thereof upon surrender of their
certificates evidencing such Preferred Securities. Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date for any
Preferred Securities called for redemption shall be payable to the holders of
such Preferred Securities on the relevant record dates for the related
Distribution Dates. If notice of redemption shall have been given and funds
35
<PAGE>
deposited as required, then upon the date of such deposit, all rights of the
holders of such Preferred Securities so called for redemption will cease,
except the right of the holders of such Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Preferred Securities will cease to be outstanding. In the event that any date
fixed for redemption of Preferred Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day which is a Business Day (and without any additional
Distribution, interest or other payment in respect of any such delay). In the
event that payment of the Redemption Price in respect of Preferred Securities
called for redemption is improperly withheld or refused and not paid either by
CTBI Trust or by the Company pursuant to the Guarantee, Distributions on such
Preferred Securities will continue to accrue at the then applicable rate, from
the Redemption Date originally established by CTBI Trust for such Preferred
Securities to the date such Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price. See "Description of Guarantee."
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Preferred Securities by tender, in the
open market or by private agreement.
Payment of the Redemption Price on the Preferred Securities and any
distribution of Subordinated Debentures to holders of Preferred Securities
shall be made to the applicable record holders thereof as they appear on the
register for such Preferred Securities on the relevant record date, which date
shall be one Business Day prior to the relevant Redemption Date or liquidation
date, as applicable; provided, however, that in the event that any Preferred
Securities are not in book-entry form, the relevant record date for such
Preferred Securities shall be a date at least 15 days prior to the Redemption
Date or liquidation date, as applicable.
If less than all of the Preferred Securities and Common Securities issued by
CTBI Trust are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of such Preferred Securities and Common Securities to be
redeemed shall be allocated pro rata to the Preferred Securities and the Common
Securities based upon the relative Liquidation Amounts of such classes. The
particular Preferred Securities to be redeemed shall be selected by the
Property Trustee from the outstanding Preferred Securities not previously
called for redemption, by such method as the Property Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $25 or an integral multiple of $25 in excess thereof) of the
Liquidation Amount of Preferred Securities of a denomination larger than $25.
The Property Trustee shall promptly notify the trust registrar in writing of
the Preferred Securities selected for redemption and, in the case of any
Preferred Securities selected for partial redemption, the Liquidation Amount
thereof to be redeemed. For all purposes of the CTBI Trust Agreement, unless
the context otherwise requires, all provisions relating to the redemption of
Preferred Securities shall relate to the portion of the aggregate Liquidation
Amount of Preferred Securities which has been or is to be redeemed.
Notice of any redemption will be mailed at least 30 days but not more than 60
days before the Redemption Date to each Holder of Trust Securities to be
redeemed at its registered address. Unless the Company defaults in payment of
the Redemption Price on the Subordinated Debentures, on and after the
Redemption Date interest will cease to accrue on such Subordinated Debentures
or portions thereof (and distributions will cease to accrue on the related
Preferred Securities or portions thereof) called for redemption.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, the Preferred
Securities and Common Securities, as applicable, shall be made pro rata based
on the Liquidation Amount of the Preferred Securities and Common Securities;
provided, however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be 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 Distributions on all of the outstanding Preferred
Securities for all Distribution periods terminating on or prior thereto, or in
the
36
<PAGE>
case of payment of the Redemption Price, the full amount of such Redemption
Price on all of the outstanding Preferred 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 Redemption Price of, the Preferred Securities then due
and payable.
In the case of any Event of Default resulting from a Debenture Event of
Default, the Company, as holder of the Common Securities, will be deemed to
have waived any right to act with respect to any such Event of Default under
the CTBI Trust Agreement until the effect of all such Events of Default with
respect to such Preferred Securities have been cured, waived or otherwise
eliminated. Until any such Events of Default under the CTBI Trust Agreement
with respect to the Preferred Securities have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
holders of the Preferred Securities and not on behalf of the Company as holder
of the Common Securities, and only the holders of the Preferred Securities will
have the right to direct the Property Trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
The amount payable on the Preferred Securities in the event of any
liquidation of CTBI Trust is $25 per Preferred Security plus accrued and unpaid
Distributions thereon to the date of payment, which may be in the form of a
distribution of such amount in Subordinated Debentures, subject to certain
exceptions. See "Description of the Preferred Securities--Liquidation
Distribution Upon Termination."
The Company, as the holder of the Common Securities, will have the right at
any time to terminate CTBI Trust and cause the Subordinated Debentures to be
distributed to the holders of the Preferred Securities. Such right is subject
to the Company having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal
Reserve.
In addition, pursuant to the CTBI Trust Agreement, CTBI Trust shall
automatically terminate upon expiration of its term and shall earlier terminate
on the first to occur of: (i) certain events of bankruptcy, dissolution or
liquidation of the Company; (ii) the distribution of a Like Amount of the
Subordinated Debentures to the holders of its Trust Securities, if the Company,
as Depositor, has given written direction to the Property Trustee to terminate
CTBI Trust (which direction is optional and wholly within the discretion of the
Company, as Depositor); (iii) redemption of all of the Preferred Securities as
described under "Description of Preferred Securities--Redemption;" and (iv) the
entry of an order for the dissolution of CTBI Trust by a court of competent
jurisdiction.
If an early termination occurs as described in clause (i), (ii) or (iv)
above, CTBI Trust shall be liquidated by the Trustees as expeditiously as the
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of CTBI Trust as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the Subordinated Debentures,
unless such distribution is determined by the Property Trustee not to be
practical, in which event such holders will be entitled to receive out of the
assets of CTBI Trust available for distribution to holders, after satisfaction
of liabilities to creditors of CTBI Trust as provided by applicable law, an
amount equal to, in the case of holders of Preferred Securities, the aggregate
of the Liquidation Amount plus accrued and unpaid Distributions thereon to the
date of payment (such amount being the "Liquidation Distribution"). If such
Liquidation Distribution can be paid only in part because CTBI Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then the amounts payable directly by CTBI Trust on the Preferred
Securities shall be paid on a pro rata basis. The holder(s) of the Common
Securities will be entitled to receive distributions upon any such liquidation
pro rata with the holders of the Preferred Securities, except that if a
Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a priority over the Common Securities.
After the liquidation date fixed for any distribution of Subordinated
Debentures for Preferred Securities (i) such Preferred Securities will no
longer be deemed to be outstanding, (ii) The Depository Trust Company (the
"Depositary") or its nominee, as the record holder of the Preferred Securities,
will receive a registered global
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certificate or certificates representing the Subordinated Debentures to be
delivered upon such distribution and (iii) any certificates representing
Preferred Securities not held by the Depositary or its nominee will be deemed
to represent the Subordinated Debentures having a principal amount equal to the
Liquidation Amount of such Preferred Securities, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on the
Preferred Securities until such certificates are presented to the Securities
Registrar or their agent for transfer or reissuance.
Under current United States federal income tax law and interpretations and
assuming, as expected, CTBI Trust is treated as a grantor trust, a distribution
of the Subordinated Debentures should not be a taxable event to holders of the
Preferred Securities. Should there be a change in law, a change in legal
interpretation, a Tax Event or other circumstances, however, the distribution
could be a taxable event to holders of the Preferred Securities. See "Certain
Federal Income Tax Consequences." If the Company elects neither to redeem the
Subordinated Debentures prior to maturity, nor to liquidate CTBI Trust and
distribute the Subordinated Debentures to holders of the Preferred Securities,
the Preferred Securities will remain outstanding until the repayment of the
Subordinated Debentures.
If the Company elects to liquidate CTBI Trust and thereby causes the
Subordinated Debentures to be distributed to holders of the Preferred
Securities in liquidation of CTBI Trust, the Company shall continue to have the
right to shorten or extend the maturity of such Subordinated Debentures,
subject to certain conditions. See "Description of Subordinated Debentures--
General."
There can be no assurance as to the market prices for the Preferred
Securities or the Subordinated Debentures that may be distributed in exchange
for Preferred Securities if a dissolution and liquidation of CTBI Trust were to
occur. Accordingly, the Preferred Securities that an investor may purchase, or
the Subordinated Debentures that the investor may receive on dissolution and
liquidation of CTBI Trust, may trade at a discount to the price that the
investor paid to purchase the Preferred Securities offered hereby.
EVENTS OF DEFAULT AND NOTICE
Any one of the following events constitutes an "Event of Default" under the
CTBI Trust Agreement (an "Event of Default") with respect to the Preferred
Securities (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default under the Indenture
(see "Description of Subordinated Debentures--Debenture Events of
Default"); or
(ii) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(iii) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in the CTBI Trust Agreement (other
than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clauses (ii) or (iii) above), and
continuation of such default or breach for a period of 60 days after there
has been given, by registered or certified mail, to the Trustee or Trustees
by the holders of at least 25% in aggregate Liquidation Amount of the
outstanding Preferred Securities, a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" under the CTBI Trust Agreement; or
(v) the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by the Company to appoint a
successor Property Trustee within 60 days thereof.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Preferred Securities, the
Administrative Trustees and the Company, as Depositor, unless such Event of
Default shall have
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been cured or waived. The Company, as Depositor, and the Administrative
Trustees are required to file annually with the Property Trustee a certificate
as to whether or not they are in compliance with all the conditions and
covenants applicable to them under each Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Preferred
Securities shall have a preference over the Common Securities upon termination
of CTBI Trust as described above. See "--Liquidation Distribution Upon
Termination." The existence of an Event of Default does not entitle the holders
of Preferred Securities to accelerate the maturity thereof.
REMOVAL OF CTBI TRUST TRUSTEES
Unless a Debenture Event of Default shall have occurred and be continuing,
any Securities Trustee may be removed at any time by the holders of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of at least 25% in Liquidation Amount of the outstanding Preferred
Securities. In no event will the holders of the Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Company as the holder of the Common
Securities. No resignation or removal of a Securities Trustee and no
appointment of a successor trustee shall be effective until the acceptance of
appointment by the successor trustee in accordance with the provisions of the
applicable Trust Agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an Event of Default shall have occurred and be continuing, at any time
or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property,
as defined in the Indenture, may at the time be located, the Company, as the
holder of the Common Securities, and the Administrative Trustees shall have
power to appoint one or more persons either to act as a co-trustee, jointly
with the Property Trustee, of all or any part of such Trust Property, or to act
as separate trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in such person or
persons in such capacity any property, title, right or power deemed necessary
or desirable, subject to the provisions of the applicable Trust Agreement. In
case a Debenture Event of Default has occurred and is continuing, the Property
Trustee alone shall have power to make such appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Any person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under each Trust
Agreement, provided such person shall be otherwise qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF CTBI TRUST
CTBI Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below. CTBI Trust may, at the request of the Company, with the
consent of the Administrative Trustees and without the consent of the holders
of the Preferred Securities, merge with or into, consolidate, amalgamate, or be
replaced by or convey, transfer or lease its properties and assets
substantially as an entirety to a trust organized as such under the laws of any
State; provided, that (i) such successor entity either (a) expressly assumes
all of the obligations of CTBI Trust with respect to the Preferred Securities
or (b) substitutes for the Preferred Securities other securities having
substantially the same terms as the Preferred Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the Preferred
Securities rank in priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Company expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee in its capacity as the holder of the Subordinated Debentures,
(iii) the Successor Securities are listed, or any Successor Securities will be
listed upon notification of issuance, on The Nasdaq Stock Market's National
Market or any national securities exchange or other organization on which the
Preferred Securities are then listed, if any, (iv)
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such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in any
material respect, (v) such successor entity has a purpose identical to that of
CTBI Trust, (vi) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Company has received an opinion
from independent counsel to CTBI Trust experienced in such matters to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Preferred Securities (including any
Successor Securities) in any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease,
neither CTBI Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act and (vii) the Company or
any permitted successor or assignee owns all of the Common Securities of such
successor entity and guarantees the obligations of such successor entity under
the Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, CTBI Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets substantially as an entirety to any other entity or
permit any other entity to consolidate, amalgamate, merge with or into, or
replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause CTBI 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 TRUST AGREEMENT
Except as provided below and under "Description of Guarantee--Amendments and
Assignment" and as otherwise required by law and the CTBI Trust Agreement, the
holders of the Preferred Securities will have no voting rights.
The CTBI Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Preferred Securities (i) to cure any ambiguity, correct or
supplement any provisions in the CTBI Trust Agreement that may be inconsistent
with any other provision, or to make any other provisions with respect to
matters or questions arising under the CTBI Trust Agreement, which shall not be
inconsistent with the other provisions of the CTBI Trust Agreement, or (ii) to
modify, eliminate or add to any provisions of the CTBI Trust Agreement to such
extent as shall be necessary to ensure that CTBI Trust will be classified for
United States federal income tax purposes as a grantor trust at all times that
any Trust Securities are outstanding or to ensure that CTBI Trust will not be
required to register as an "investment company" under the Investment Company
Act; provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of any holder of Trust
Securities, and any amendments of such CTBI Trust Agreement shall become
effective when notice thereof is given to the holders of Trust Securities. The
CTBI Trust Agreement may be amended by the Trustees and the Company with (i)
the consent of holders representing not less than a majority in the aggregate
Liquidation Amount of the outstanding Trust Securities, and (ii) receipt by the
Trustees of an opinion of counsel to the effect that such amendment or the
exercise of any power granted to the Trustees in accordance with such amendment
will not affect CTBI Trust's status as a grantor trust for United States
federal income tax purposes or CTBI Trust's exemption from status as an
"investment company" under the Investment Company Act. Notwithstanding anything
in this paragraph to the contrary, without the consent of each holder of Trust
Securities, such CTBI Trust Agreement may not be amended to (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date.
So long as any Subordinated Debentures are held by the Property Trustee, the
Property Trustee shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Property Trustee with respect to the
Subordinated Debentures, (ii) waive any past default that is waivable under the
Indenture, (iii) exercise any right to rescind or
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annul a declaration that the principal of all the Subordinated Debentures shall
be due and payable or (iv) consent to any amendment, modification or
termination of the Indenture or the Subordinated Debentures, where such consent
shall be required, without, in each case, obtaining the prior approval of the
holders of at least a majority in aggregate Liquidation Amount of all
outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each holder of Subordinated
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior consent of each holder of the Preferred Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the holders of the Preferred Securities except by
subsequent vote of the holders of the Preferred Securities. The Property
Trustee shall notify each holder of Preferred Securities of any notice of
default with respect to the Subordinated Debentures. In addition to obtaining
the foregoing approvals of the holders of the Preferred Securities, prior to
taking any of the foregoing actions, the Property Trustee shall obtain an
opinion of counsel experienced in such matters to the effect that CTBI Trust
will not be classified as an association taxable as a corporation for United
States federal income tax purposes on account of such action.
Any required approval of holders of Preferred Securities may be given at a
meeting of holders of Preferred Securities convened for such purpose or
pursuant to written consent. The Property Trustee will cause a notice of any
meeting at which holders of Preferred Securities are entitled to vote, or of
any matter upon which action by written consent of such holders is to be taken,
to be given to each holder of record of Preferred Securities in the manner set
forth in the CTBI Trust Agreement.
No vote or consent of the holders of Preferred Securities will be required
for CTBI Trust to redeem and cancel its Preferred Securities in accordance with
the CTBI Trust Agreement.
Notwithstanding the fact that holders of Preferred Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Preferred Securities that are owned by the Company, the Trustees or any
affiliate of the Company or any Trustee, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The Preferred Securities will be represented by one or more global
certificates registered in the name of the Depositary or its nominee ("Global
Preferred Security"). Beneficial interests in the Preferred Securities will be
shown on, and transfers thereof will be effected only through, records
maintained by participants in the Depositary. Except as described below,
Preferred Securities in certificated form will not be issued in exchange for
the global certificates. See "Book-Entry Issuance."
A global security shall be exchangeable for Preferred Securities registered
in the names of persons other than the Depositary or its nominee only if (i)
the Depositary notifies the Company that it is unwilling or unable to continue
as a depositary for such global security and no successor depositary shall have
been appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time
when the Depositary is required to be so registered to act as such Depositary,
(ii) the Company in its sole discretion determines that such global security
shall be so exchangeable, or (iii) there shall have occurred and be continuing
an Event of Default under the Indenture. Any global security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
definitive certificates registered in such names as the Depositary shall
direct. It is expected that such instructions will be based upon directions
received by the Depositary with respect to ownership of beneficial interests in
such global security. In the event that Preferred Securities are issued in
definitive form, such Preferred Securities will be in denominations of $25 and
integral multiples thereof and may be transferred or exchanged at the offices
described below.
Payments on Preferred Securities represented by a global security will be
made to the Depositary, as the depositary for the Preferred Securities. In the
event Subordinated Debentures are issued in definitive form, principal and
Distributions will be payable, the transfer of the Preferred Securities will be
registrable, and Preferred Securities will be exchangeable for Preferred
Securities of other denominations of a like aggregate
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Liquidation Amount, at the corporate office of the Property Trustee in Boston,
Massachusetts, or at the offices of any paying agent or transfer agent
appointed by the Administrative Trustees, provided that payment of any
Distribution may be made at the option of the Administrative Trustees by check
mailed to the address of the persons entitled thereto or by wire transfer. In
addition, if the Preferred Securities are issued in certificated form, the
record dates for payment of Distributions will be the 15th day of the month in
which the relevant Distribution Date occurs. For a description of the terms of
the depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance."
Upon the issuance of a Global Preferred Security, and the deposit of such
Global Preferred Security with or on behalf of the Depositary, the Depositary
for such Global Preferred Security or its nominee will credit, on its book-
entry registration and transfer system, the respective aggregate Liquidation
Amounts of the individual Preferred Securities represented by such Global
Preferred Securities to the accounts of persons having accounts with the
Depositary ("Participants"). Such accounts shall be designated by the dealers,
underwriters or agents with respect to such Preferred Securities. Ownership of
beneficial interests in a Global Preferred Security will be limited to
Participants or persons that may hold interests through Participants. Ownership
of beneficial interests in such Global Preferred Security will be shown on, and
the transfer of that ownership will be effected only through, records
maintained by the applicable Depositary or its nominee (with respect to
interests of Participants) and the records of Participants (with respect to
interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of such
securities in definitive form. Such limits and such laws may impair the ability
to transfer beneficial interests in a Global Preferred Security.
So long as the Depositary for a Global Preferred Security, or its nominee, is
the registered owner of such Global Preferred Security, such Depositary or such
nominee, as the case may be, will be considered the sole owner or holder of the
Preferred Securities represented by such Global Preferred Security for all
purposes under the Indenture governing such Preferred Securities. Except as
provided below, owners of beneficial interests in a Global Preferred Security
will not be entitled to have any of the individual Preferred Securities
represented by such Global Preferred Security registered in their names, will
not receive or be entitled to receive physical delivery of any such Preferred
Securities in definitive form and will not be considered the owners or holders
thereof under the Indenture.
None of the Company, CTBI Trust, the Property Trustee, any Paying Agent, or
the Securities Registrar for such Preferred Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests of the Global
Preferred Security representing such Preferred Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Company expects that the Depositary for Preferred Securities or its
nominee, upon receipt of any payment of the Liquidation Amount, Redemption
Price or Distributions in respect of the Global Preferred Security immediately
will credit Participants' accounts with payments in amounts proportionate to
their respective beneficial interest in the aggregate Liquidation Amount of
such Global Preferred Security as shown on the records of such Depositary or
its nominee. The Company also expects that payments by Participants to owners
of beneficial interests in such Global Preferred Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." Such payments will be the responsibility
of such Participants.
If the Depositary for the Preferred Securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is
not appointed by the Company within 90 days, CTBI Trust will issue individual
Preferred Securities in exchange for the Global Preferred Security. In
addition, CTBI Trust may at any time and in its sole discretion, subject to any
limitations described herein relating to such Preferred Securities, determine
not to have any Preferred Securities represented by one or more Global
Preferred Securities and, in such event, will issue individual Preferred
Securities in exchange for the Global Preferred Security or Securities
representing the Preferred Securities. Further, if CTBI Trust so specifies with
respect to the Preferred
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Securities, an owner of a beneficial interest in a Global Preferred Security
representing Preferred Securities may, on terms acceptable to the Company, the
Property Trustee and the Depositary for such Global Preferred Security,
receive individual Preferred Securities in exchange for such beneficial
interests, subject to any limitations described herein. In any such instance,
an owner of a beneficial interest in a Global Preferred Security will be
entitled to physical delivery of individual Preferred Securities represented
by such Global Preferred Security equal in Liquidation Amount to such
beneficial interest and to have such Preferred Securities registered in its
name. Individual Preferred Securities so issued will be issued in
denominations, unless otherwise specified by CTBI Trust, of $25 and integral
multiples thereof.
PAYMENT AND PAYING AGENCY
Payments in respect of the Preferred Securities shall be made to the paying
agent, which shall credit the relevant accounts at the Depositary on the
applicable Distribution Dates or, if any Preferred Securities are not held by
the Depositary, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register of
holders of Preferred Securities. The paying agent shall initially be the
Property Trustee ("Paying Agent") and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees. The Paying
Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Property Trustee and the Company. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees) to act as Paying Agent.
REGISTRAR AND TRANSFER AGENT
The Property Trustee will act as registrar and transfer agent for the
Preferred Securities. Registration of transfers of Preferred Securities will
be effected without charge by or on behalf of CTBI Trust, but upon payment of
any tax or other governmental charges that may be imposed in connection with
any transfer or exchange. CTBI Trust will not be required to register or cause
to be registered the transfer of Preferred Securities after such Preferred
Securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee, other than upon the occurrence and during the
continuance of an Event of Default, undertakes to perform only such duties as
are specifically set forth in the CTBI Trust Agreement and, after such Event
of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the Property Trustee is under no obligation to exercise any
of the powers vested in it by the CTBI Trust Agreement at the request of any
holder of Preferred Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred thereby. If
no Event of Default has occurred and is continuing and the Property Trustee is
required to decide between alternative causes of action, construe ambiguous
provisions in the CTBI Trust Agreement or is unsure of the application of any
provision of the CTBI Trust Agreement, and the matter is not one on which
holders of Preferred Securities are entitled under the CTBI Trust Agreement to
vote, then the Property Trustee shall take such action as is directed by the
Company and if not so directed, shall take such action as it deems advisable
and in the best interests of the holders of the Trust Securities and will have
no liability except for its own bad faith, negligence or willful misconduct.
MISCELLANEOUS
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate CTBI Trust in such a way that CTBI Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a
corporation for United States federal income tax purposes and so that the
Subordinated Debentures will be treated as indebtedness of the Company for
United Stated federal income tax purposes. In this connection, the Company and
the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the certificate of trust of CTBI Trust or
the CTBI Trust Agreement, that the Company and the Administrative Trustees
determine in their discretion to be necessary or desirable for such purposes,
as long as such action does not materially adversely affect the interests of
the holders of the related Preferred Securities.
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DESCRIPTION OF SUBORDINATED DEBENTURES
The Subordinated Debentures will be issued under the Indenture, dated as of
, 1997 ("Indenture"), between the Company and the Debenture Trustee. The
following summary of the material terms and provisions of the Subordinated
Debentures and the Indenture does not purport to be complete and is subject
to, and is qualified in its entirety by reference to, the Indenture, which has
been filed as an exhibit to the Registration Statement of which this
Prospectus forms a part, and to the Trust Indenture Act. The Indenture will be
qualified under the Trust Indenture Act. Whenever particular defined terms of
the Indenture are referred to herein, such defined terms are incorporated
herein or therein by reference. Concurrently with the issuance of the
Preferred Securities, CTBI Trust will invest the proceeds thereof, together
with the consideration paid by the Company for the Common Securities, in the
Subordinated Debentures issued by the Company. The Subordinated Debentures
will be issued as unsecured debt under the Indenture.
GENERAL
The Subordinated Debentures will bear interest at the annual rate of % of
the principal amount thereof, payable quarterly in arrears on March 31, June
30, September 30, and December 31 of each year (each, an "Interest Payment
Date") beginning June 30, 1997, to the person in whose name each Subordinated
Debenture is registered, subject to certain exceptions, at the close of
business on the Business Day next preceding such Interest Payment Date.
Interest will begin to accrue from the date of original issuance of the
Subordinated Debentures. It is anticipated that, until the liquidation, if
any, of CTBI Trust, the Subordinated Debentures will be held in the name of
the Property Trustee in trust for the benefit of the holders of the Preferred
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. In the event that any
date on which interest is payable on the Subordinated Debentures is not a
Business Day, then payment of the interest payable on such date will be made
on the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay) with the same force and effect as
if made on the date such payment was originally payable. Accrued interest that
is not paid on the applicable Interest Payment Date will bear additional
interest on the amount thereof (to the extent permitted by law) at the rate
per annum of % thereof, compounded quarterly. The term "interest" as used
herein shall include quarterly interest payments, interest on quarterly
interest payments not paid on the applicable Interest Payment Date and
Additional Sums (as defined below), as applicable.
The Subordinated Debentures will mature on March 31, 2027. Such date may be
shortened at any time by the Company to any date not earlier than March 31,
2007, subject to the Company having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve. Such date may also be extended at any time at the
election of the Company but in no event to a date later than March 31, 2036,
provided that at the time such election is made and at the time of extension
(i) the Company is not in bankruptcy, otherwise insolvent or in liquidation,
(ii) the Company is not in default in the payment of any interest or principal
on the Subordinated Debentures, and (iii) CTBI Trust is not in arrears on
payments of Distributions on the Preferred Securities and no deferred
Distributions are accumulated. In the event that the Company elects to shorten
or extend the Stated Maturity of the Subordinated Debentures, it shall give
notice to the Debenture Trustee, and the Debenture Trustee shall give notice
of such shortening or extension to the holders of the Subordinated Debentures
no more than 180 days and no less than 90 days prior to the effectiveness
thereof.
The Subordinated Debentures will be unsecured and will rank junior and be
subordinate in right of payment to all Senior Debt and Subordinated Debt of
the Company and, in certain circumstances relating to the dissolution,
winding-up, liquidation or reorganization of the Company, to all Additional
Senior Obligations of the Company. See "--Subordination." Because the Company
is a holding company, the right of the Company to participate in any
distribution of assets of any of the Banks, upon any such Bank's liquidation
or reorganization or otherwise (and thus the ability of holders of the
Preferred Securities to benefit indirectly from such distribution), is subject
to the prior claims of creditors of that Bank, except to the extent that the
Company may itself be recognized as a creditor of such Bank. Accordingly, the
Subordinated Debentures will be effectively
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subordinated to all existing and future liabilities of the Banks, and holders
of Subordinated Debentures should look only to the assets of the Company for
payments on the Subordinated Debentures. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Debt, Subordinated Debt or Additional Senior Obligations,
whether under the Indenture or any existing indenture or other indenture that
the Company may enter into in the future or otherwise. See "--Subordination."
The Indenture does not contain provisions that afford holders of the
Subordinated Debentures protection in the event of a highly leveraged
transaction or other similar transaction involving the Company that may
adversely affect such holders.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
So long as no Event of Default under the Indenture has occurred and is
continuing, the Company has the right under the Indenture at any time during
the term of the Subordinated Debentures to defer the payment of interest at
any time or from time to time for a period not exceeding 20 consecutive
quarters (each such period an "Extension Period"), provided that no Extension
Period may extend beyond the Stated Maturity of the Subordinated Debentures.
At the end of such Extension Period, the Company must pay all interest then
accrued and unpaid (together with interest thereon at the annual rate of %,
compounded quarterly, to the extent permitted by applicable law). During an
Extension Period, interest will continue to accrue and holders of Subordinated
Debentures (or holders of Preferred Securities while such series is
outstanding) will be required to accrue interest income for United States
federal income tax purposes. See "Certain Federal Income Tax Consequences--
Potential Extension of Interest Payment Period and Original Issue Discount."
During any such Extension Period, the Company may not, and may not permit
any Bank or other subsidiary of the Company to, (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Company's capital stock or
(ii) make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including other
Subordinated Debentures) that rank pari passu with or junior in interest to
the Subordinated Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the
Company if such guarantee ranks pari passu or junior in interest to the
Subordinated Debentures (other than (a) dividends or distributions in Company
common stock, (b) any declaration of a dividend in connection with the
implementation of a shareholders' rights plan, or the issuance of stock under
any such plan in the future or the redemption or repurchase of any such rights
pursuant thereto, (c) payments under the Guarantee, and (d) purchases of
common stock related to rights under any of the Company's benefit plans for
its directors, officers or employees). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
provided that no Extension Period may exceed 20 consecutive quarters or extend
beyond the Stated Maturity of the Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all amounts then
due on any Interest Payment Date, the Company may elect to begin a new
Extension Period subject to the above requirements. No interest shall be due
and payable during an Extension Period, except at the end thereof. The Company
must give the Property Trustee, the Administrative Trustees and the Debenture
Trustee notice of its election of such Extension Period at least one Business
Day prior to the earlier of (i) the date the Distributions on the Preferred
Securities would have been payable except for the election to begin such
Extension Period or (ii) the date the Administrative Trustees are required to
give notice to the Nasdaq Stock Market National Market or other applicable
self-regulatory organization, or to holders of such Preferred Securities on
the record date for the date such Distributions are payable, but in any event
not less than one Business Day prior to such record date. The Debenture
Trustee shall give notice of the Company's election to begin a new Extension
Period to the holders of the Preferred Securities. Subject to the foregoing,
there is no limitation on the number of times that the Company may elect to
begin an Extension Period.
SHORTENING OR EXTENDING MATURITY DATE
The Subordinated Debentures will mature on March 31, 2027. Such date may be
shortened at any time by the Company to any date not earlier than March 31,
2007, subject to the Company having received prior approval of the Federal
Reserve if then required under applicable capital guidelines or policies of
the Federal Reserve.
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Such date may also be extended at any time at the election of the Company, but
in no event to a date later than March 31, 2036, provided that at the time
such election is made and at the time of extension (i) the Company is not in
bankruptcy, otherwise insolvent or in liquidation, (ii) the Company is not in
default in the payment of any interest or principal on the Subordinated
Debentures, and (iii) CTBI Trust is not in arrears on payments of
Distributions on the Preferred Securities and no deferred Distributions are
accumulated. In the event that the Company elects to shorten or extend the
Stated Maturity of the Subordinated Debentures, it shall give notice to the
Debenture Trustee, and the Debenture Trustee shall give notice of such
shortening or extension to the holders of the Subordinated Debentures no more
than 180 days and no less than 90 days prior to the effectiveness thereof.
ADDITIONAL SUMS
If CTBI Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Subordinated Debentures such amounts ("Additional
Sums") as shall be required so that the Distributions payable by CTBI Trust
shall not be reduced as a result of any such additional taxes, duties or other
governmental charges.
REDEMPTION
Subject to the Company having received prior approval of the Federal
Reserve, if then required under applicable capital guidelines or policies of
the Federal Reserve, the Subordinated Debentures are redeemable prior to
maturity at the option of the Company (i) on or after March 31, 2007, in whole
at any time or in part from time to time or (ii) at any time in whole (but not
in part) upon the occurrence and during the continuance of a Tax Event, an
Investment Company Event or a Capital Event, in each case at a redemption
price equal to the accrued and unpaid interest on the Subordinated Debentures
so redeemed to the date fixed for redemption, plus 100% of the principal
amount thereof.
"Tax Event" means the receipt by the Company of an opinion of independent
counsel (which may be counsel to the Company) experienced in such matters to
the effect that, as a result of any amendment to, or change in (including any
announced prospective change), the laws (or any regulations thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, or as a result of any official administrative pronouncement or
judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or which pronouncement or decision is
announced on or after the date of issuance of the Subordinated Debentures
under the Indenture, there is more than an insubstantial risk that (i)
interest payable by the Company on the Subordinated Debentures is not, or
within 90 days after the date of such opinion will not be, deductible by the
Company, in whole or in part, for United States federal income tax purposes,
(ii) CTBI Trust is, or will be within 90 days after the date of such opinion,
subject to United States federal income tax with respect to income received or
accrued on the Subordinated Debentures, or (iii) CTBI Trust is, or will be
within 90 days after the date of such opinion, subject to more than a de
minimis amount of other taxes, duties, assessments or other governmental
charges.
An "Investment Company Event" means the receipt by CTBI Trust of an opinion
of independent counsel (which may be counsel to the Company) experienced in
such matters to the effect that, as a result of a change in law or regulation
or a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority, there is
more than an insubstantial risk that CTBI Trust is or will be considered an
"investment company" that is required to be registered under the Investment
Company Act, which change becomes effective on or after the date of original
issuance of the Preferred Securities.
A "Capital Event" means that CTBI Trust has received an opinion of
independent counsel (which may be counsel to the Company) experienced in such
matters that the Company cannot, or within 90 days after the date of such
opinion, will not be permitted by the applicable regulatory authorities, due
to a change in law, regulation, policy or guideline or interpretation or
application of law or regulation, policy or guideline, to account for the
Preferred Securities as Tier I Capital under the capital guidelines or
policies of the Federal Reserve.
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Notice of any redemption will be mailed at least 30 days but not more than 60
days before the redemption date to each holder of Subordinated Debentures to be
redeemed at its registered address. Unless the Company defaults in payment of
the redemption price, on and after the redemption date interest ceases to
accrue on such Subordinated Debentures or portions thereof called for
redemption.
The Subordinated Debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of Preferred Securities--Liquidation
Distribution Upon Termination," under certain circumstances involving the
termination of CTBI Trust, the Subordinated Debentures may be distributed to
the holders of the Preferred Securities in liquidation of CTBI Trust after
satisfaction of liabilities to creditors of CTBI Trust as provided by
applicable law. If distributed to holders of Preferred Securities in
liquidation, it is anticipated that the Subordinated Debentures will initially
be issued in the form of one or more global securities and the Depositary, or
any successor depositary for the Preferred Securities, will act as depositary
for the Subordinated Debentures. It is anticipated that the depositary
arrangements for the Subordinated Debentures would be substantially identical
to those in effect for the Preferred Securities. If the Subordinated Debentures
are distributed to the holders of Preferred Securities upon the liquidation of
CTBI Trust, the Company will use its best efforts to list the Subordinated
Debentures on The Nasdaq Stock Market's National Market or such stock
exchanges, if any, on which the Preferred Securities are then listed. There can
be no assurance as to the market price of any Subordinated Debentures that may
be distributed to the holders of Preferred Securities.
RESTRICTIONS ON CERTAIN PAYMENTS
The Company will covenant, as to the Subordinated Debentures, that if at such
time (i) there shall have occurred any event (a) that with the giving of notice
or the lapse of time, or both, would constitute an "Event of Default" under the
Indenture and (b) in respect of which the Company shall not have taken
reasonable steps to cure, or (ii) the Company shall have given notice of its
election of an Extension Period as provided in the Indenture with respect to
the Subordinated Debentures and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing, it will not,
and will not permit any subsidiary of the Company to, (1) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock or (2)
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Company that rank pari passu
with or junior in interest to the Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Subordinated Debentures (other than (a) dividends or
distributions in Company common stock, (b) any declaration of a dividend in
connection with the implementation of a shareholders' rights plan, or the
issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the
Guarantee and (d) purchases of common stock related to rights under any of the
Company's benefit plans for its directors, officers or employees).
SUBORDINATION
In the Indenture, the Company has covenanted and agreed that any Subordinated
Debentures issued thereunder will be subordinate and junior in right of payment
to all Senior Debt, Subordinated Debt and Additional Senior Obligations to the
extent provided in the Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of the Company, the holders of
Senior Debt, Subordinated Debt and Additional Senior Obligations will first be
entitled to receive payment in full of principal of (and premium, if any) and
interest, if any, on such Senior Debt, Subordinated Debt and Additional Senior
Obligations before the holders of Subordinated Debentures will be entitled to
receive any payment in respect of the principal of or interest, if any, on the
Subordinated Debentures.
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In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Debt, Subordinated Debt and Additional
Senior Obligations outstanding at the time of such acceleration will first be
entitled to receive payment in full of all amounts due thereon (including any
amounts due upon acceleration) before the holders of Subordinated Debentures
will be entitled to receive any payment in respect of the principal of or
interest, if any, on the Subordinated Debentures; provided, however, that
holders of Subordinated Debt shall not be entitled to receive payment of any
such amounts to the extent that such Subordinated Debt is by its terms
subordinated to trade creditors.
No payments on account of principal or interest, if any, in respect of the
Subordinated Debentures may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior Debt, Subordinated
Debt or Additional Senior Obligations or an event of default with respect to
any Senior Debt, Subordinated Debt or Additional Senior Obligations resulting
in the acceleration of the maturity thereof, or if any judicial proceeding
shall be pending with respect to any such default.
"Debt" means with respect to any person, whether recourse is to all or a
portion of the assets of such person and whether or not contingent, (i) every
obligation of such person for money borrowed; (ii) every obligation of such
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such person; (iv) every obligation of such person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such person; 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, directly or indirectly, as
obligor or otherwise.
"Senior Debt" means the principal of (and premium, if any) and interest, if
any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not such
claim for post-petition interest is allowed in such proceeding), on Debt,
whether incurred on or prior to the date of the Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Subordinated Debentures or to other Debt
which is pari passu with, or subordinated to, the Subordinated Debentures;
provided, however, that Senior Debt shall not be deemed to include (i) any Debt
of the Company which when incurred and without respect to any election under
section 1111(b) of the United States Bankruptcy Code of 1978, as amended, was
without recourse to the Company, (ii) any Debt of the Company to any of its
subsidiaries, (iii) Debt to any employee of the Company, (iv) Debt which by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the extent that payments made to the
holders of such Debt by the holders of the Subordinated Debentures as a result
of the subordination provisions of the Indenture would be greater than they
otherwise would have been as a result of any obligation of such holders to pay
amounts over to the obligees on such trade accounts payable or accrued
liabilities arising in the ordinary course of business as a result of
subordination provisions to which such Debt is subject, (v) Debt which
constitutes Subordinated Debt, and (vi) any other debt securities issued
pursuant to the Indenture.
"Subordinated Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in Bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of the Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Company (other than the Subordinated Debentures).
"Additional Senior Obligations" means all indebtedness of the Company whether
incurred on or prior to the date of the Indenture or thereafter incurred, for
claims in respect of derivative products such as interest and foreign exchange
rate contracts, commodity contracts and similar arrangements; provided,
however, that Additional Senior Obligations do not include claims in respect of
Senior Debt or Subordinated Debt or obligations which, by their terms, are
expressly stated to be not superior in right of payment to the Subordinated
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Debentures or to rank pari passu in right of payment with the Subordinated
Debentures. For purposes of this definition, "claim" shall have the meaning
assigned thereto in Section 101(4) of the United States Bankruptcy Code of
1978, as amended.
The Indenture places no limitation on the amount of additional Senior Debt
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness constituting Senior Debt, Subordinated Debt and
Additional Senior Obligations.
DENOMINATIONS, REGISTRATION AND TRANSFER
Initially, the Subordinated Debentures will be registered in the name of the
Property Trustee. If the Subordinated Debentures are distributed to the holders
of the Preferred Securities upon the liquidation of CTBI Trust, it is
anticipated that the Subordinated Debentures will then be represented by global
certificates registered in the name of the Depositary or its nominee.
Beneficial interests in the Subordinated Debentures will be shown on, and
transfers thereof will be effected only through, records maintained by the
Depositary. If the Subordinated Debentures are maintained by the Depositary, it
is anticipated that substantially the same procedures will be applicable to the
Subordinated Debentures as are described under "Description of the Preferred
Securities--Global Preferred Securities." See also "Book-Entry Issuance."
The Company will appoint the Debenture Trustee as securities registrar under
the Indenture (the "Securities Registrar"). Subordinated Debentures may be
presented for exchange as provided above, and may be presented for registration
of transfer (with the form of transfer endorsed thereon, or a satisfactory
written instrument of transfer, duly executed), at the office of the Securities
Registrar. The Company may at any time rescind the designation of any such
registrar or approve a change in the location through which any such registrar
acts, provided that the Company maintains a registrar in the place of payment,
as defined in the Indenture. The Company may at any time designate additional
transfer agents with respect to the Subordinated Debentures. In the event of
any redemption, neither the Company nor the Debenture Trustee shall be required
to (i) issue, register the transfer of or exchange Subordinated Debentures
during a period beginning at the opening of business 15 days before the day of
selection for redemption of Subordinated Debentures and ending at the close of
business on the day of mailing of the relevant notice of redemption or (ii)
transfer or exchange any Subordinated Debentures so selected for redemption,
except, in the case of any Subordinated Debentures being redeemed in part, any
portion thereof not to be redeemed.
PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the Subordinated Debentures will
be made at the office of the Debenture Trustee in the City of Boston,
Massachusetts, except that at the option of the Company payment of any interest
may be made (i) except in the case of a Global Subordinated Debenture, by check
mailed to the address of the person entitled thereto as such address shall
appear in the securities register or (ii) by transfer to an account maintained
by the person entitled thereto as specified in the securities register,
provided that proper transfer instructions have been received by the record
date. Payment of any interest on Subordinated Debentures will be made to the
person in whose name such Subordinated Debentures is registered at the close of
business on the record date for such interest payment, except in the case of
Defaulted Interest. The Company may at any time designate additional Paying
Agents or rescind the designation of any paying agent; however the Company will
at all times be required to maintain a paying agent in each place of payment
for the Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or then
held by the Company in trust, for the payment of the principal of or interest
on the Subordinated Debentures and remaining unclaimed for two years after such
principal or interest has become due and payable shall, at the request of the
Company, be repaid to the Company and the holder of such Subordinated Debenture
shall thereafter look, as a general unsecured creditor, only to the Company for
payment thereof.
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MODIFICATION OF INDENTURE
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of the Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies (provided that any such action
does not materially adversely affect the interests of the holders of the
Subordinated Debentures or the Preferred Securities so long as they remain
outstanding) and qualifying, or maintaining the qualification of, the Indenture
under the Trust Indenture Act. The Indenture contains provisions permitting the
Company and the Debenture Trustee, with the consent of the holders of not less
than a majority in principal amount of the outstanding Subordinated Debentures,
to modify the Indenture in a manner affecting the rights of the holders of the
Subordinated Debentures; provided, that no such modification may, without the
consent of the holder of each outstanding Subordinated Debenture, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, or reduce the percentage of principal amount of Subordinated
Debentures, the holders of which are required to consent to any such
modification of the Indenture, provided that so long as any of the Preferred
Securities remain outstanding, no such modification may be made that adversely
affects the holders of such Preferred Securities in any material respect, and
no termination of the Indenture may occur, and no waiver of any Debenture Event
of Default or compliance with any covenant under the Indenture may be
effective, without the prior consent of the holders of at least a majority of
the aggregate Liquidation Amount of the Preferred Securities unless and until
the principal of the Subordinated Debentures and all accrued and unpaid
interest thereon have been paid in full and certain other conditions are
satisfied.
DEBENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described events
with respect to the Subordinated Debentures that has occurred and is continuing
constitutes an event of default ("Debenture Event of Default") with respect to
the Subordinated Debentures:
(i) failure for 30 days to pay any interest on the Subordinated
Debentures, when due (subject to the deferral of any due date in the case
of an extension Period); or
(ii) failure to pay any principal on the Subordinated Debentures when due
whether at maturity, upon redemption by declaration or otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to
the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee.
The Debenture Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the Subordinated Debentures may declare the
principal due and payable immediately upon a Debenture Event of Default. The
holders of a majority in aggregate outstanding principal amount of the
Subordinated Debentures may annul such declaration and waive the default if the
default (other than the non-payment of the principal of the Subordinated
Debentures which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee.
Should the holders of the Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities shall have such right.
The Company is required to file annually with the Debenture Trustee a
certificate as to whether or not the Company is in compliance with all the
conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing the
Property Trustee will have the right to declare the principal of and the
interest on such Subordinated Debentures, and any other amounts payable under
the Indenture, to be forthwith due and payable and to enforce its other rights
as a creditor with respect to such Subordinated Debentures.
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ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If a Debenture Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest or principal on
the Subordinated Debentures on the date such interest or principal is otherwise
payable, a holder of Preferred Securities may institute a legal proceeding
directly against the Company for enforcement of payment to such holder of the
principal of or interest on such Subordinated Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Preferred Securities of
such holder ("Direct Action"). The Company may not amend the Indenture to
remove the foregoing right to bring a Direct Action without the prior written
consent of the holders of all of the Preferred Securities. The Company shall
have the right under the Indenture to set-off any payment made to such holder
of Preferred Securities by the Company in connection with a Direct Action.
The holders of the Preferred Securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the Subordinated Debentures unless there shall have
been an Event of Default under the CTBI Trust Agreement. See "Description of
Preferred Securities--Events of Default and Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The Indenture provides that the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, and no Person shall consolidate
with or merge into the Company or convey, transfer or lease its properties and
assets substantially as an entirety to the Company, unless (i) in case the
Company consolidates with or merges into another Person or conveys or transfers
its properties and assets substantially as an entirety to any Person, the
successor Person is organized under the laws of the United States or any state
or the District of Columbia, and such successor Person expressly assumes the
Company's obligations on the Subordinated Debentures issued under the
Indenture; (ii) immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or both, would
become a Debenture Event of Default, shall have occurred and be continuing; and
(iii) certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Subordinated Debentures protection in the event of a highly leveraged or other
transaction involving the Company that may adversely affect holders of the
Subordinated Debentures.
SATISFACTION AND DISCHARGE
The Indenture provides that when, among other things, all Subordinated
Debentures not previously delivered to the Debenture Trustee for cancellation
(i) have become due and payable or (ii) will become due and payable at their
Stated Maturity within one year, and the Company deposits or causes to be
deposited with the Debenture Trustee funds, in trust, for the purpose and in an
amount in the currency or currencies in which the Subordinated Debentures are
payable sufficient to pay and discharge the entire indebtedness on the
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and interest to the date of the deposit or to
the Stated Maturity, as the case may be, then the Indenture will cease to be of
further effect (except as to the Company's obligations to pay all other sums
due pursuant to the Indenture and to provide the officers' certificates and
opinions of counsel described therein), and the Company will be deemed to have
satisfied and discharged the Indenture.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the Commonwealth of Kentucky.
INFORMATION CONCERNING THE DEBENTURE TRUSTEE
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of
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Subordinated Debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The Debenture Trustee is not required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
The Company will covenant in the Indenture, as to the Subordinated
Debentures, that if and so long as (i) CTBI Trust is the holder of all such
Subordinated Debentures, (ii) a Tax Event in respect of CTBI Trust has
occurred and is continuing and (iii) the Company has elected, and has not
revoked such election, to pay Additional Sums (as defined under "Description
of the Preferred Securities--Redemption") in respect of the Preferred
Securities, the Company will pay to CTBI Trust such Additional Sums. The
Company will also covenant, as to the Subordinated Debentures, (i) to maintain
directly or indirectly 100% ownership of the Common Securities of CTBI Trust
to which Subordinated Debentures have been issued, provided that certain
successors which are permitted pursuant to the Indenture may succeed to the
Company's ownership of the Common Securities, (ii) not to voluntarily
terminate, wind-up or liquidate CTBI Trust, except upon prior approval of the
Federal Reserve if then so required under applicable capital guidelines or
policies of the Federal Reserve, and (a) in connection with a distribution of
Subordinated Debentures to the holders of the Preferred Securities in
liquidation of CTBI Trust, or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the CTBI Trust Agreement and
(iii) to use its reasonable efforts, consistent with the terms and provisions
of the CTBI Trust Agreement, to cause CTBI Trust to remain classified as a
grantor trust and not as an association taxable as a corporation for United
States federal income tax purposes.
BOOK-ENTRY ISSUANCE
The Depositary will act as securities depositary for all of the Preferred
Securities. The Preferred Securities will be issued only as fully-registered
securities registered in the name of Cede & Co. (the Depositary's nominee).
One or more fully-registered global certificates will be issued for the
Preferred Securities and will be deposited with the Depositary.
The Depositary is a limited purpose trust company organized under the New
York Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depositary holds securities that its Participants deposit with the
Depositary. The Depositary also facilitates the settlement among Participants
of securities transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in Participants'
accounts, thereby eliminating the need for physical movement of securities
certificates. "Direct Participants" include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations.
The Depositary is owned by a number of its Direct Participants and by the New
York Stock Exchange, Inc., the American Stock Exchange, Inc. and the National
Association of Securities Dealers, Inc. Access to the Depositary system is
also available to others such as securities brokers and dealers, banks and
trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with
the Commission.
Purchases of Preferred Securities within the Depositary system must be made
by or through Direct Participants, which will receive a credit for the
Preferred Securities on the Depositary's records. The ownership interest of
each actual purchaser of each Preferred Security ("Beneficial Owner") is in
turn to be recorded on the Direct and Indirect Participants' records.
Beneficial Owners will not receive written confirmation from the Depositary of
their purchases, but Beneficial Owners are expected to receive written
confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the Direct or Indirect Participants through
which the Beneficial Owners purchased Preferred Securities. Transfers of
ownership interests in the Preferred Securities are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial
Owners. Beneficial Owners will not receive certificates representing their
ownership interests in Preferred Securities, except in the event that use of
the book-entry system for the Preferred Securities of CTBI Trust is
discontinued.
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The Depositary has no knowledge of the actual Beneficial Owners of the
Preferred Securities; the Depositary's records reflect only the identity of the
Direct Participants to whose accounts such Preferred Securities are credited,
which may or may not be the Beneficial Owners. The Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by the Depositary to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners and the voting
rights of Direct Participants, Indirect Participants and Beneficial Owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of the
Preferred Securities. If less than all of the Preferred Securities are being
redeemed, the Depositary will determine by lot or pro rata the amount of the
Preferred Securities of each Direct Participant to be redeemed. Although voting
with respect to the Preferred Securities is limited to the holders of record of
the Preferred Securities, in those instances in which a vote is required,
neither the Depositary nor Cede & Co. will itself consent or vote with respect
to Preferred Securities. Under its usual procedures, the Depositary would mail
an omnibus proxy (the "Omnibus Proxy") to the relevant Trustee as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts such
Preferred Securities are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Distribution payments on the Preferred Securities will be made by the
relevant Trustee to the Depositary. The Depositary's practice is to credit
Direct Participants' accounts on the relevant payment date in accordance with
their respective holdings shown on the Depositary's records unless the
Depositary has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
such Participant and not of the Depositary, the relevant Trustee, CTBI Trust or
the Company, subject to any statutory or regulatory requirements as may be in
effect from time to time. Payment of Distributions to the Depositary is the
responsibility of the relevant Trustee, disbursement of such payments to Direct
Participants is the responsibility of the Depositary, and disbursements of such
payments to the Beneficial Owners is the responsibility of Direct and Indirect
Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to any of the Preferred Securities at any time by
giving reasonable notice to the relevant Trustee and the Company. In the event
that a successor securities depositary is not obtained, definitive Preferred
Security certificates representing such Preferred Securities are required to be
printed and delivered. The Company, at its option, may decide to discontinue
use of the system of book-entry transfers through the Depositary (or a
successor depositary). After a Debenture Event of Default, the holders of a
majority in liquidation preference of Preferred Securities may determine to
discontinue the system of book-entry transfers through the Depositary. In any
such event, definitive certificates for such Preferred Securities will be
printed and delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that CTBI Trust
and the Company believe to be accurate, but CTBI Trust and the Company assume
no responsibility for the accuracy thereof. Neither CTBI Trust nor the Company
has any responsibility for the performance by the Depositary or its
Participants of their respective obligations as described herein or under the
rules and procedures governing their respective operation.
In the event that CTBI Trust is terminated and the Subordinated Debentures
are distributed to the holders of the Preferred Securities the depository
arrangements and book-entry system applicable thereto will be substantially
similar to those applicable to the Preferred Securities. See "Description of
Preferred Securities--Global Preferred Securities."
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DESCRIPTION OF GUARANTEE
The Preferred Securities Guarantee Agreement (the "Guarantee") will be
executed and delivered by the Company concurrently with the issuance of the
Preferred Securities for the benefit of the holders of the Preferred
Securities. State Street Bank and Trust will act as indenture trustee under
the Guarantee for the purposes of compliance with the Trust Indenture Act, and
the Guarantee will be qualified as an Indenture under the Trust Indenture Act.
The following summary of the material terms and provisions of the Guarantee
does not purport to be complete and is subject to, and qualified in its
entirety by reference to, all of the provisions of the Guarantee Agreement,
including the definitions therein of certain terms, and the Trust Indenture
Act. The form of the Guarantee has been filed as an exhibit to the
Registration Statement of which this Prospectus forms a part. The Guarantee
Trustee will hold the Guarantee for the benefit of the holders of the
Preferred Securities.
GENERAL
The Guarantee will be an irrevocable guarantee on a subordinated basis of
CTBI Trust's obligations under the Preferred Securities, but will apply only
to the extent that CTBI Trust has funds sufficient to make such payments, and
is not a guarantee of collection.
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to
the holders of the Preferred Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that CTBI Trust may have or assert
other than the defense of payment. The following payments with respect to the
Preferred Securities, to the extent not paid by or on behalf of CTBI Trust
(the "Guarantee Payments"), will be subject to the Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Preferred
Securities, to the extent that CTBI Trust has funds on hand available therefor
at such time, (ii) the Redemption Price with respect to any Preferred
Securities called for redemption to the extent that CTBI Trust has funds on
hand available therefor at such time, and (iii) upon a voluntary or
involuntary dissolution, winding-up or liquidation of CTBI Trust (unless the
Subordinated Debentures are distributed to holders of the Preferred
Securities), the lesser of (a) the Liquidation Distribution and (b) the amount
of assets of CTBI Trust remaining available for distribution to holders of
Preferred Securities. The Company's obligation to make a Guarantee Payment may
be satisfied by direct payment of the required amounts by the Company to the
holders of the Preferred Securities or by causing CTBI Trust to pay such
amounts to such holders. Third party creditors of CTBI Trust may proceed
directly against the Company under the Agreement as to Expenses and
Liabilities (as defined below), regardless of whether such creditors had
notice of the Agreement as to Expenses and Liabilities.
If the Company does not make interest payments on the Subordinated
Debentures held by CTBI Trust, CTBI Trust will not be able to pay
Distributions on the Preferred Securities and will not have funds legally
available therefor. The Guarantee will rank subordinate and junior in right of
payment to all other liabilities of the Company. See "--Status of the
Guarantee." Because the Company is a holding company, the right of the Company
to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the
prior claims of creditors of that subsidiary, except to the extent the Company
may itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Guarantee will be effectively subordinated to
all existing and future liabilities of the Company's subsidiaries, and
claimants should look only to the assets of the Company for payments
thereunder. Except as otherwise described herein, the Guarantee does not limit
the incurrence or issuance of other secured or unsecured debt of the Company,
including Senior Debt, whether under the Indenture, any other indenture that
the Company may enter into in the future, or otherwise.
The Company has, through the Guarantee, the CTBI Trust Agreement, the
Subordinated Debentures, the Indenture and the Expense Agreement, taken
together, fully, irrevocably and unconditionally guaranteed all of CTBI
Trust's obligations under the Preferred Securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined
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operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of CTBI Trust's obligations under the
Preferred Securities. See "Relationship Among the Preferred Securities, the
Subordinated Debentures and the Guarantee."
STATUS OF THE GUARANTEE
The Guarantee will constitute an unsecured obligation of the Company and
will rank subordinate and junior in right of payment to all other liabilities
of the Company.
The Guarantee will constitute a guarantee of payment and not of collection.
For example, the guaranteed party may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity. The
Guarantee will be held for the benefit of the holders of the Preferred
Securities. The Guarantee will not be discharged except by payment of the
Guarantee Payments in full to the extent not paid by CTBI Trust or upon
distribution of the Subordinated Debentures to the holders of the Preferred
Securities. The Guarantee does not place a limitation on the amount of other
liabilities that may be incurred by the Company. The Company expects from time
to time to incur additional liabilities.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes which do not materially adversely affect
the rights of holders of the Preferred Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of
the holders of not less than a majority of the aggregate Liquidation Amount of
the outstanding Preferred Securities. See "Description of the Preferred
Securities--Voting Rights; Amendment of Trust Agreement." All guarantees and
agreements contained in the Guarantee shall bind the successors, assigns,
receivers, trustees and representatives of the Company and shall inure to the
benefit of the holders of the Preferred Securities then outstanding.
EVENTS OF DEFAULT
An event of default under the Guarantee will occur upon the failure of the
Company to perform any of its payment or other obligations thereunder. The
holders of not less than a majority in aggregate Liquidation Amount of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Guarantee or to direct the exercise of any trust or power
conferred upon the Guarantee Trustee under the Guarantee.
Any holder of Preferred Securities may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against CTBI Trust, the Guarantee Trustee or
any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with
all the conditions and covenants applicable to it under the Guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance of a
default by the Company in performance of the Guarantee, undertakes to perform
only such duties as are specifically set forth in the Guarantee and, after
default with respect to the Guarantee, must exercise the same degree of care
and skill as a prudent person would exercise or use in the conduct of his or
her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of any Preferred Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
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TERMINATION OF THE GUARANTEE
The Guarantee will terminate and be of no further force and effect upon full
payment of the Redemption Price of the Preferred Securities, upon full payment
of the amounts payable upon liquidation of CTBI Trust or upon distribution of
the Subordinated Debentures to the holders of the Preferred Securities. The
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Preferred Securities must restore payment
of any sums paid under such Preferred Securities or the Guarantee.
GOVERNING LAW
The Guarantee will be governed by and construed in accordance with the laws
of the Commonwealth of Kentucky.
THE AGREEMENT AS TO EXPENSES AND LIABILITIES
Pursuant to the Agreement as to Expenses and Liabilities entered into by the
Company under the CTBI Trust Agreement ("Agreement as to Expenses and
Liabilities"), the Company will irrevocably and unconditionally guarantee to
each person or entity to whom CTBI Trust becomes indebted or liable, the full
payment of any costs, expenses or liabilities of CTBI Trust, other than
obligations of CTBI Trust to pay to the holders of the Preferred Securities or
other similar interests in CTBI Trust of the amounts due such holders pursuant
to the terms of the Preferred Securities or such other similar interests, as
the case may be.
RELATIONSHIP AMONG THE PREFERRED SECURITIES,
THE SUBORDINATED DEBENTURES
AND THE GUARANTEE
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Preferred Securities
(to the extent CTBI Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Company as and to the extent
set forth under "Description of Guarantee." The Company and CTBI Trust believe
that, taken together, the Company's obligations under the Subordinated
Debentures, the Indenture, the CTBI Trust Agreement, the Agreement as to
Expenses and Liabilities, and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payment of Distributions and other
amounts due on the Preferred Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents
constitutes such guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and
unconditional guarantee of CTBI Trust's obligations under the Preferred
Securities. If and to the extent that the Company does not make payments on
the Subordinated Debentures, CTBI Trust will not pay Distributions or other
amounts due on the Preferred Securities. The Guarantee does not cover payment
of Distributions when CTBI Trust does not have sufficient funds to pay such
Distributions. In such event, the remedy of a holder of Preferred Securities
is to institute a legal proceeding directly against the Company for
enforcement of payment of such Distributions to such holder. The obligations
of the Company under the Guarantee are subordinate and junior in right of
payment to all other liabilities of the Company.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Preferred Securities, primarily
because (i) the aggregate principal amount of the Subordinated Debentures will
be equal to the sum of the aggregate stated Liquidation Amount of the
Preferred Securities and Common Securities; (ii) the interest rate and
interest and other payment dates on the Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the Preferred
Securities; (iii) the Company shall pay for all and any costs, expenses and
liabilities of CTBI Trust except CTBI Trust's obligations to holders of the
Preferred Securities; and (iv) the CTBI Trust Agreement further provides that
CTBI Trust will not engage in any activity that is not consistent with the
limited purposes of CTBI Trust.
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Notwithstanding anything to the contrary in the Indenture, the Company has
the right to set-off any payment it is otherwise required to make thereunder
with and to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a payment under the Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF PREFERRED SECURITIES
A holder of any Preferred Security may institute a legal proceeding directly
against the Company to enforce its rights under the Guarantee without first
instituting a legal proceeding against the Guarantee Trustee, CTBI Trust or any
other person or entity.
A default or event of default under any Senior Debt, Subordinated Debt or
Additional Senior Obligations of the Company would not constitute a Debenture
Event of Default. However, in the event of payment defaults under, or
acceleration of, Senior Debt, Subordinated Debt or Additional Senior
Obligations of the Company, the subordination provisions of the Indenture
provide that no payments may be made in respect of the Subordinated Debentures
until such Senior Debt, Subordinated Debt or Additional Senior Obligations has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on the Subordinated Debentures would
constitute an Event of Default.
LIMITED PURPOSE OF CTBI TRUST
The Preferred Securities evidence a beneficial interest in CTBI Trust, and
CTBI Trust exists for the sole purpose of issuing the Preferred Securities and
Common Securities and investing the proceeds thereof in Subordinated
Debentures. A principal difference between the rights of a holder of a
Preferred Security and a holder of a Subordinated Debenture is that a holder of
a Subordinated Debenture is entitled to receive from the Company the principal
amount of and interest accrued on Subordinated Debentures held, while a holder
of Preferred Securities is entitled to receive Distributions from CTBI Trust
(or from the Company under the Guarantee) if and to the extent CTBI Trust has
funds available for the payment of such Distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
CTBI Trust involving the liquidation of the Subordinated Debentures, the
holders of the Preferred Securities will be entitled to receive, out of assets
held by CTBI Trust, the Liquidation Distribution in cash. See "Description of
Preferred Securities--Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of the Company, the Property
Trustee, as holder of the Subordinated Debentures, would be a subordinated
creditor of the Company, subordinated in right of payment to all Senior Debt,
Subordinated Debt and Additional Senior Obligations as set forth in the
Indenture, but entitled to receive payment in full of principal and interest
before any stockholders of the Company receive payments or distributions. Since
the Company is the guarantor under the Guarantee and has agreed to pay for all
costs, expenses and liabilities of CTBI Trust (other than CTBI Trust's
obligations to the holders of its Preferred Securities), the positions of a
holder of the Preferred Securities and a holder of the Subordinated Debentures
relative to other creditors and to stockholders of the Company in the event of
liquidation or bankruptcy of the Company are expected to be substantially the
same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
GENERAL
This section is a summary of the material United States federal income tax
considerations that may be relevant to the purchasers of Preferred Securities
and represents the opinion of Greenebaum Doll & McDonald PLLC, counsel to the
Company, insofar as it relates to matters of law and legal conclusions. The
conclusions expressed herein are based upon current provisions of the Internal
Revenue Code of 1986, as amended ("Code"), the regulations promulgated
thereunder and current administrative rulings and court decisions, all of which
are
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subject to change at any time, with possible retroactive effects. Subsequent
changes may cause tax consequences to vary substantially from the consequences
described below. See "--Effect of Proposed Changes in Tax Laws." Furthermore,
the authorities on which this summary is based are subject to various
interpretations, and it is therefore possible that the federal income tax
treatment of the purchase, ownership and disposition of Preferred Securities
may differ from the treatment described below.
No attempt has been made in the following discussion to comment on all
United States federal income tax matters affecting purchasers of Preferred
Securities. Moreover, the discussion generally focuses on holders of Preferred
Securities who are individual citizens or residents of the United States and
who acquire Preferred Securities on their original issue at their offering
price and hold Preferred Securities as capital assets. The discussion has only
limited application to dealers in securities, corporations, estates, trusts or
nonresident aliens and does not address all the tax consequences that may be
relevant to holders who may be subject to special tax treatment, such as, for
example, banks, thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or currencies, tax-
exempt investors, or persons that will hold the Preferred Securities as a
position in a "straddle," as part of a "synthetic security" or "hedge," as
part of a "conversion transaction" or other integrated investment, or as other
than a capital asset. This summary also does not address the tax consequences
to persons that have a functional currency other than the U.S. dollar or the
tax consequences to shareholders, partners or beneficiaries of a holder of
Preferred Securities. Further, it does not include any description of any
alternative minimum tax consequences or the tax laws of any state or local
government or of any foreign government that may be applicable to the
Preferred Securities.
Each prospective investor should consult, and should rely exclusively on,
the investor's own tax advisors in analyzing the federal, state, local and
foreign tax consequences of the purchase, ownership or disposition of
Preferred Securities.
CLASSIFICATION OF THE SUBORDINATED DEBENTURES
The Company intends to take the position that the Subordinated Debentures
will be classified for United States federal income tax purposes as
indebtedness of the Company under current law. No assurance can be given,
however, that such position of the Company will not be challenged by the
Internal Revenue Service or, if challenged, that such a challenge will not be
successful. The remainder of this discussion assumes that the Subordinated
Debentures will be classified for United States federal income tax purposes as
indebtedness of the Company.
CLASSIFICATION OF CTBI TRUST
With respect to the Preferred Securities, Greenebaum Doll & McDonald PLLC,
counsel to the Company, has rendered its opinion generally to the effect that,
under current law and assuming full compliance with the terms of the CTBI
Trust Agreement and Indenture, CTBI Trust will be classified for United States
federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Preferred Securities generally will be treated as
owning an undivided beneficial interest in the Subordinated Debentures, and
each holder will be required to include in its return any income, gain, loss
or expense with respect to its allocable share of the Subordinated Debentures.
POTENTIAL EXTENSION OF INTEREST PAYMENT PERIOD AND ORIGINAL ISSUE DISCOUNT
The Company's option to extend the interest payment period on the
Subordinated Debentures may cause the indebtedness to be issued with original
issue discount ("OID"). Under recently issued Treasury regulations
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(the "Regulations"), a contingency that stated interest will not be timely
paid that is "remote" will be ignored in determining whether such debt
instrument is issued with OID. As a result of the terms and conditions of the
Subordinated Debentures that prohibit certain payments with respect to the
Company's capital stock and indebtedness if the Company elects to extend
interest payment periods, the Company believes that the likelihood of its
exercising its option to defer payments is remote. Based on the foregoing, the
Company intends to take the position that the Subordinated Debentures will not
be considered to be issued with OID at the time of their original issuance. If
this position is sustained, a holder of Preferred Securities should include in
gross income such holder's allocable share of interest on the Subordinated
Debentures in accordance with its own method of tax accounting.
There can be no assurance, however, that the Internal Revenue Service will
not successfully contest the Company's position. If the Internal Revenue
Service were successful in such a contention, then all of the stated interest
payments on the Subordinated Debentures would be treated as OID. In such case,
the holders of the Preferred Securities would be required to include OID in
income on an economic accrual basis regardless of whether any interest is
actually paid or their method of tax accounting, but will not be required to
report actual payments of interest as taxable income.
If the Company's position that there is no OID initially is upheld, but the
Company exercises its option to defer any payment of interest, the
Subordinated Debentures would at the time of such exercise be treated as
issued with OID, and all stated interest thereafter payable on the
Subordinated Debentures would be treated as OID. In such event, the holders of
the Preferred Securities would be required to account for the OID as stated in
the immediately preceding paragraph. Consequently, a holder of Preferred
Securities would be required to include in gross income OID even though the
Company would not make any actual interest payments during an Extension
Period.
MARKET DISCOUNT AND ACQUISITION PREMIUM
Holders of Preferred Securities other than a holder who purchased the
Preferred Securities upon original issuance may be considered to have acquired
their undivided interests in the Subordinated Debentures with "market
discount" or "acquisition premium" as such phrases are defined for United
States federal income tax purposes. Such holders are advised to consult their
tax advisors as to the income tax consequences of the acquisition, ownership
and disposition of the Preferred Securities.
RECEIPT OF SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF CTBI TRUST
Under certain circumstances, as described under "Description of the
Preferred Securities--Redemption," the Subordinated Debentures may be
distributed to holders of Preferred Securities upon a liquidation of CTBI
Trust. Under current United States federal income tax law, such a distribution
would be treated as a nontaxable exchange to each such holder and would result
in such holder having an aggregate tax basis in the Subordinated Debentures
received in the liquidation equal to such holder's aggregate tax basis in the
Preferred Securities immediately before the distribution. A holder's holding
period in the Subordinated Debentures so received in liquidation of CTBI Trust
would include the period for which such holder held the Preferred Securities.
If, however, a Tax Event occurs which results in CTBI Trust being treated as
an association taxable as a corporation, the distribution would likely
constitute a taxable event to CTBI Trust and to holders of the Preferred
Securities. Each holder of Preferred Securities would recognize gain or loss
as if such holder exchanged the Preferred Securities for the subordinated
Debentures it received upon liquidation of CTBI Trust. Under certain
circumstances described herein, the Subordinated Debentures may be redeemed
for cash and the proceeds of such redemption distributed to holders in
redemption of their Preferred Securities. Under current law, such a redemption
would, for United States federal income tax purposes, constitute a taxable
disposition, and a holder would recognize gain or loss as if the holder sold
such Preferred Securities for cash. See "Description of Preferred Securities--
Redemption."
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DISPOSITION OF PREFERRED SECURITIES
A holder of Preferred Securities that sells Preferred Securities will
recognize gain or loss equal to the difference between its adjusted tax basis
for the Preferred Securities and the amount realized on the sale of such
Preferred Securities. Assuming that the Company's position that there is no
OID initially is upheld, and that the Company does not exercise its option to
defer payment of interest on the Subordinated Debentures, a Preferred Security
holder's adjusted tax basis for the Preferred Securities generally will be its
initial purchase price. If the Subordinated Debentures are deemed to have been
issued initially with OID, or OID results due to the Company's deferral of any
interest payment, a Preferred Security holder's adjusted tax basis for the
Preferred Securities generally will be its initial purchase price, increased
by OID previously included in such holder's gross income to the date of
disposition and decreased by distributions and other payments received on the
Preferred Securities since the date the Subordinated Debentures are deemed to
have OID. Such gain or loss generally will be a capital gain or loss (except
to the extent any amount realized is treated as a payment of accrued interest
with respect to such holder's pro rata share of the Subordinated Debentures)
and will be a long-term capital gain or loss if the Preferred Securities have
been held for more than one year.
The Preferred Securities may trade at a price that does not accurately
reflect the value of accrued but unpaid interest with respect to the
underlying Subordinated Debentures. A holder that disposes of its Preferred
Securities between record dates for payments of distributions thereon will be
required to include as ordinary income either OID (if applicable) or accrued
but unpaid interest on the Subordinated Debentures through the date of
disposition. To the extent the amount realized is less than the holder's
adjusted tax basis, a holder will generally recognize a capital loss. Subject
to certain limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
EFFECT OF PROPOSED CHANGES IN TAX LAWS
On February 6, 1997, the revenue portion of President Clinton's 1998 budget
proposal (the "Budget Proposal") was released. The Budget Proposal would
generally deny deductions for interest on an instrument issued by a
corporation that has a maximum weighted average maturity of more than 40
years. The Budget Proposal would also generally deny deductions for interest
on an instrument issued by a corporation that has a maximum term of more than
15 years and that is not shown as indebtedness on the separate balance sheet
of the issuer filed with the Commission or, where the instrument is issued to
a related party (other than a corporation), where the holder or some other
related party issues a related instrument that is not shown as indebtedness on
the issuer's consolidated balance sheet filed with the Commission. The above
described provisions of the Budget Proposal are proposed to be effective
generally for instruments issued on or after the date of first Congressional
committee action. Since the Subordinated Debentures cannot have a term
exceeding 40 years, the first of the above described Budget Proposals would be
inapplicable. Furthermore, since the Company intends to reflect the Preferred
Securities as long-term debt on its consolidated balance sheet filed with the
Commission (although it will treat the transaction as a minority interest for
regulatory reporting), as currently drafted, the Budget Proposal would not
appear to apply to the Subordinated Debentures. There can be no assurance,
however, that similar legislation which would apply to the Subordinated
Debentures will not be enacted, and such legislation could be retroactive in
effect. If any such legislation were enacted, the Company would be unable to
deduct interest on the Subordinated Debentures. Such a change could give rise
to a Tax Event, which would permit the Company to cause a redemption of the
Preferred Securities before March 31, 2007.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The amount of OID accrued on the Preferred Securities held of record by
individual citizens or residents of the United States, or certain trusts,
estates, and partnerships, will be reported to the Internal Revenue Service on
Forms 1099, which forms should be mailed to such holders of Preferred
Securities by January 31 following each calendar year. Payments made on, and
proceeds from the sale of, the Preferred Securities may be subject to a
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"backup" withholding tax (currently at 31%) unless the holder complies with
certain identification and other requirements. Any amounts withheld under the
backup withholding rules will be allowed as a credit against the holder's
United States federal income tax liability provided the required information
is provided to the Internal Revenue Service.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF PREFERRED SECURITIES. HOLDERS OF PREFERRED
SECURITIES SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE
PREFERRED SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL,
FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS.
PLAN OF DISTRIBUTION
The Preferred Securities and the Subordinated Debentures will be offered for
sale and distributed by the Company and CTBI Trust, as the case may be, by
Morgan Keegan & Company, Inc. and J.J.B. Hilliard, W.L. Lyons, Inc. (the
"Underwriters"). The Underwriters will be obligated to purchase all of the
Preferred Securities on or before the date this Prospectus is first delivered
to offeree.
It is the intention of the Company and CTBI Trust that, within 30 days of
the effective date of the Registration Statement of which this Prospectus is a
part, that the Preferred Securities will be trading on The Nasdaq Stock
Market's National Market under the trading symbol "CTBIP."
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement among
Morgan Keegan & Company, Inc., J.J.B. Hilliard, W.L. Lyons, Inc., the Company
and CTBI Trust, the Underwriters have, severally and not jointly, agreed to
purchase from CTBI Trust, and CTBI Trust has agreed to sell to the
Underwriters, the respective numbers of the Preferred Securities set forth
opposite their respective names below.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER PREFERRED SECURITIES
------------------- --------------------
<S> <C>
Morgan Keegan & Company, Inc.........................
J.J.B. Hilliard, W.L. Lyons, Inc.....................
---------
Total............................................
=========
</TABLE>
The Underwriting Agreement provides that the obligations of the Underwriters
thereunder are subject to approval of certain legal matters by counsel and to
various other conditions, including, among other things, the continuing
accuracy of the representations and warranties of the Company and CTBI Trust
contained in the Underwriting Agreement, the performance by the Company and
CTBI Trust of their obligations under the Underwriting Agreement and the
receipt of certain opinions of counsel in form and substance reasonably
satisfactory to counsel for the Underwriters. The nature of the Underwriters
obligations is such that they are committed to purchase and pay for all of the
Preferred Securities, if any are purchased.
The Underwriters propose to offer the Preferred Securities directly to the
public at the initial public offering price set forth on the cover page of
this Prospectus. The Underwriters have advised the Company and CTBI Trust that
sales of the Preferred Securities to certain dealers may be made at a
concession not in excess of $ per Preferred Security, and that the
Underwriters may allow, and such dealers may reallow, discounts not in excess
of $ per Preferred Security on sales to certain other dealers. After the
public offering, the offering price and other selling terms may be changed by
the Underwriters.
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In view of the fact that the proceeds from the sale of the Preferred
Securities will be used to purchase the Subordinated Debentures issued by the
Company, the Underwriting Agreement provides that the Company will pay as
Underwriters' Compensation for the Underwriters' arranging the investment
therein of such proceeds an amount of $ per Preferred Security for the
accounts of the several Underwriters.
CTBI Trust has granted to the Underwriters an option, exercisable during a
thirty-day period after the date of this Prospectus, to purchase up to 180,000
shares of Preferred Securities at the public offering price, all as described
on the cover page hereof, solely to cover over-allotments, if any. The Company
has also agreed to pay the Underwriters the same commission described in the
immediately preceding paragraph in the event the Underwriters exercise this
option.
Prior to this offering, there has been no public market for the Preferred
Securities. The Preferred Securities have been approved for listing on The
Nasdaq Stock Market's National Market, subject to notice of issuance. Trading
of the Preferred Securities on Nasdaq Stock Market's National Market is
expected to commence within 30 days after the initial delivery of the Preferred
Securities. The Underwriters have advised the Company that they intend to make
a market in the Preferred Securities prior to commencement of trading on The
Nasdaq Stock Market's National Market, but are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of or the existence of the trading market for the Preferred
Securities.
The Company and CTBI Trust have agreed to indemnify the several Underwriters
against certain liabilities, including liabilities under the Securities Act of
1933, as amended.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment banking services to the
Company and its affiliates, for which such Underwriters or their affiliates
have received or will receive customary fees and commissions.
At the request of the Company, up to 120,000 Preferred Securities have been
reserved for sale to certain individuals, including directors, officers and
employees of the Company and member of their families.
VALIDITY OF PREFERRED SECURITIES
Certain matters of Delaware law relating to the validity of the Preferred
Securities will be passed upon, upon behalf of CTBI Trust, by Richards, Layton
& Finger, special Delaware counsel to CTBI Trust. The validity of the
Subordinated Debentures and the Preferred Securities Guarantee and certain
matters relating thereto will be passed upon for Community Trust Bancorp, Inc.
by Greenebaum Doll & McDonald PLLC, Lexington, Kentucky. Counsel for the
Underwriters, King & Spalding, will pass upon certain legal matters for the
Underwriters.
EXPERTS
The consolidated financial statements for the year ended December 31, 1996 of
Community Trust Bancorp, Inc. appearing in Community Trust Bancorp, Inc.'s
Annual Report on Form 10-K for the year ended December 31, 1996, have been
audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing. The consolidated financial statements for the year
ended December 31, 1995 and each of the two years in the period ending December
31, 1995 of Community Trust Bancorp, Inc. appearing in Community Trust Bancorp,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1996, have
been audited by Crowe, Chisek & Company LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by reference.
Nicholas R. Glancy, a Member of Greenebaum Doll & McDonald PLLC who
participated in the preparation of this Registration Statement beneficially
owns 2,812 shares of the common stock of the Company.
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AVAILABLE INFORMATION
This Prospectus constitutes a part of a combined Registration Statement on
Form S-3 (together with all amendments, exhibits and schedules thereto, the
"Registration Statement") filed by the Company and CTBI Trust with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended (the "Securities Act"), and the rules and regulations
promulgated thereunder, with respect to this offering. This Prospectus does not
contain all of the information set forth in such Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission, although it does include a summary of the material terms of
the Indenture and the CTBI Trust Agreement (each as defined herein). Reference
is made to such Registration Statement and to the exhibits relating thereto for
further information with respect to the Company, CTBI Trust and the Preferred
Securities. Any statements contained herein concerning the provisions of any
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission or incorporated by reference herein are not necessarily
complete, and, in each instance, reference is made to the copy of such document
so filed for a more complete description of the matter involved. Each such
statement is qualified in its entirety by such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549 and at its regional offices at
Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661, and Seven
World Trade Center, New York, New York 10048. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. The
Company's Common Stock is listed on the National Association of Securities
Dealers Automated Quotation/National Market System ("Nasdaq"), 1735 K Street,
N.W., Washington, D.C. 20006 under the symbol "CTBI." If available, such
reports and other information may also be accessed through the Commission's
electronic data gathering, analysis and retrieval system ("EDGAR") via
electronic means, including the Commission's web site on the Internet
(http://www.sec.gov).
No separate financial statements of the CTBI Trust have been included or
incorporated by reference herein. The Company and CTBI Trust do not consider
that such financial statements would be material to holders of the Preferred
Securities because CTBI Trust is a newly formed special purpose entity, has no
operating history or independent operations and is not engaged in and does not
propose to engage in any activity other than holding as trust assets the
Subordinated Debentures and issuing the Trust Securities. See "Description of
the Preferred Securities," "Description of Subordinated Debentures" and
"Description of Guarantee." In addition, the Company does not expect that CTBI
Trust will be filing reports under the Exchange Act with the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company pursuant to
Section 13 of the Exchange Act are incorporated by reference in this
Prospectus:
(a) Annual Report on Form 10-K for the fiscal year ended December 31,
1996; and
(b) Current Report on Form 8-K dated January 17, 1997.
All documents filed by the Registrant pursuant to Section 13(a), 13(c), 14
and 15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration
Statement which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
filing date of such documents. Any statement contained in this Prospectus or in
a document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to
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the extent that a statement contained herein or in the original Section 10(a)
prospectus (as regards any statement in any previously filed document
incorporated by reference herein), or a statement in any subsequently filed
document that is also incorporated by reference herein or a statement in any
subsequent Section 10(a) prospectus, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any or all of the documents referred to above which have been or may
be incorporated by reference herein (other than exhibits to such documents
unless such exhibits are specifically incorporated by reference in such
documents). Requests for such copies should be directed to Community Trust
Bancorp, Inc., 208 North Mayo Trail, Pikeville, Kentucky 41501; Attention:
Chief Financial Officer.
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<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY CTBI TRUST, THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF
THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY PERSON TO
WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE DELIVERY
OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN THE FACTS SET
FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF CTBI TRUST OR THE COMPANY SINCE
SUCH DATE HEREOF.
-------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 1
Risk Factors.............................................................. 6
Use of Proceeds........................................................... 12
Accounting Treatment...................................................... 12
The Company............................................................... 13
Capitalization............................................................ 14
Selected Consolidated Financial Data of the Company....................... 15
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 16
Quarterly Financial Data.................................................. 22
Executive Officers of the Company......................................... 23
Directors of the Company.................................................. 24
Selected Statistical Information.......................................... 26
Description of the Preferred Securities................................... 33
Description of Subordinated Debentures.................................... 44
Book-Entry Issuance....................................................... 52
Description of Guarantee.................................................. 54
Relationship Among the Preferred Securities, the Subordinated Debentures
and the Guarantee ....................................................... 56
Certain Federal Income Tax Consequences................................... 57
Plan of Distribution...................................................... 61
Underwriting.............................................................. 61
Validity of Preferred Securities.......................................... 62
Experts................................................................... 62
Available Information..................................................... 63
Incorporation of Certain Documents by Reference........................... 63
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
1,200,000 PREFERRED SECURITIES
CTBI PREFERRED
CAPITAL TRUST
% CUMULATIVE TRUSTPREFERRED SECURITIES
(LIQUIDATION AMOUNT $25 PER PREFERRED SECURITY)
GUARANTEED TO THE EXTENT SET FORTH HEREIN BY
LOGO
----------------
PROSPECTUS
----------------
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are:
<TABLE>
<S> <C>
Registration Fee................................................ $ 10,455
Legal Fees and Expenses......................................... 100,000
Accounting Fees and Expenses.................................... 5,000
Printing Expenses............................................... 30,000
Blue Sky Registration Fees and Expenses......................... 2,000
Trustees' Fees.................................................. 20,000
Stock Exchange Listing Fees..................................... 1,000
NASD Filing Fee................................................. 3,950
Miscellaneous Expenses.......................................... 2,595
--------
Total....................................................... $175,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Article VI of the Company's Articles of Incorporation, as amended, provides
that any person who was or is a party or threatened party to any threatened,
pending or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was a
director or officer of the Company: (a) shall be indemnified (and may be
indemnified if made a party to such proceeding by reason of the fact that he
is or was serving as a Company employee or agent, or is or was serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise) by the
Company against expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding (other than a derivative
suit), even if he is not successful on the merits, 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 Company (and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful); (b)
shall be indemnified (and may be indemnified if made a party to such
proceeding by reason of the fact that he is or was serving as a Company
employee or agent, or is or was serving at the request of the Company as a
director, officer, employee or agent of another enterprise) for expenses of a
derivative suit (a suit by a shareholder alleging a breach by a director or
officer of a duty owed to the Company), even if he is not successful on the
merits, 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 Company provided that no such
indemnification may be made in accordance with this clause (b) if he is
adjudged liable to the Company, unless a court determines that, despite such
adjudication, but in view of all the circumstances, he is entitled to
indemnification; and (c) shall be indemnified by the Company for all expenses
of such litigation when he is successful on the merits. The indemnification
described in clauses (a) and (b) above shall be made only upon a
determination, by (i) a majority vote of the disinterested directors, or (ii)
the stockholders, that indemnification is proper because the applicable
standard of conduct has been met. The Board of Directors or the stockholders
may authorize the advancement of litigation expenses to a director or officer
upon receipt of an undertaking by such director or officer to repay such
expenses if it is ultimately determined that he is not entitled to be
indemnified for them. The indemnification and the advancement of expenses
provided for by Article VI are not deemed exclusive of any rights the
indemnitee may have under any by-law, agreement, vote of stockholders or
disinterested directors, or otherwise.
Article X of the Company's Articles of Incorporation, as amended, provides
that a director of the Company shall not be personally liable to the Company
or its shareholders for monetary damages for breach of his duties as a
director, provided that this provision will not eliminate or limit the
liability of a director for the following: (a) for any transaction in which
the director's personal financial interest is in conflict with the financial
interests
II-1
<PAGE>
of the Company or its shareholders; (b) for acts or omissions not in good
faith or which involve intentional misconduct or are known to the director to
be a violation of law; (c) for any vote for or assent to an unlawful
distribution to shareholders as prohibited under Section 271B.8-330 of the
Kentucky Revised Statutes; or (d) for any transaction from which the director
derived an improper personal benefit. Article X is applicable with respect to
any such breach of duties by a director of the Company as a director
notwithstanding that such director thereafter ceases to be a director. Article
X inures to the personal benefit of such director's heirs, executors and
administrators.
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement.
3.1 --Articles of Incorporation, with all amendments thereto
(Exhibit 4.1 to Registration Statement No. 33-35138 is
incorporated herein by reference).
3.2 --By-laws (Exhibit 4.2 to Registration Statement No. 33-35138
is incorporated herein by reference).
4.1 --Certificate of Trust of CTBI Trust.
4.2 --Trust Agreement of CTBI Trust.
4.3 --Form of Amended and Restated Trust Agreement of Company.
4.4 --Form of Indenture between Community Trust Bancorp, Inc. and
State Street Bank and Trust Company, as Trustee.
4.5 --Form of Subordinated Debenture of Community Trust Bancorp,
Inc. (included in Exhibit 4.3 above).
4.6 --Form of Preferred Security Certificate of CTBI Trust
(included in Exhibit 4.2 above).
4.7 --Form of Preferred Security Guarantee of Community Trust
Bancorp, Inc.
5.1 --Opinion of Greenebaum Doll & McDonald PLLC as to the validity
of the issuance of the Subordinated Debentures and the
Guarantee to be issued by the Company
5.2 --Opinion of Richards Layton & Finger, special Delaware
Counsel, as to the validity of the issuance of the Preferred
Securities to be issued by CTBI Preferred Capital Trust.
8.1 --Opinion of Greenebaum Doll & McDonald PLLC as to certain
federal income tax matters.
12.1 --Computation of ratio of earnings to fixed charges (included
in Schedule on page 15 of Prospectus).
12.2 --Computation of ratio of earnings to fixed charges plus
preferred dividend requirements (included in Schedule on page
15 of Prospectus).
23.1 --Consent of Ernst & Young, LLP.
23.2 --Consent of Crowe, Chizek and Company LLP
23.3 --Consent of Greenebaum Doll & McDonald PLLC (included in
Exhibit 5.1 above).
23.4 --Consent of Greenebaum Doll & McDonald PLLC (included in
Exhibit 8.1 above).
23.5 --Consent of Richards Layton & Finger (included in Exhibit 5.2
above).
24.1 --Powers of Attorney (included in signatures page of this
Registration Statement)
and Resolution.
25.1 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of State Street Bank and Trust Company, as
Property Trustee.
25.2 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of State Street Bank and Trust Company, as
Guarantee Trustee.
25.3 --Statement of Eligibility under Trust Indenture Act of 1939,
as amended, of State Street Bank and Trust Company, as
Indenture Trustee.
</TABLE>
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) Filings incorporating subsequent Exchange Act documents by reference.
The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Company's annual report pursuant to Section 13(a) or 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 the Registration Statement shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Filing of Registration Statement on Form S-3.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing, the Registrants have been advised that
in the opinion of the 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 Registrants of expenses incurred or paid by a director, officer
or controlling person of Registrants in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the Registrants
will, unless in the opinion of their counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by them is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
(c) Rule 430A Undertaking.
For purposes of determining any liability under the Securities Act of 1933,
the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrants pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act of
1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE COMPANY
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PIKEVILLE, COMMONWEALTH OF KENTUCKY, ON MARCH 26,
1997.
Community Trust Bancorp, Inc.
/s/ Richard M. Levy
By: _________________________________
Richard M. Levy
Executive Vice President
Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, THAT EACH PERSON WHOSE SIGNATURE APPEARS
BELOW CONSTITUTES AND APPOINTS RICHARD M. LEVY AND JEAN R. HALE AND EACH OF
THEM, WITH FULL POWER TO ACT WITHOUT THE OTHER, HIS OR HER TRUE AND LAWFUL
ATTORNEY-IN-FACT AND AGENT, WITH FULL POWER OF SUBSTITUTION AND
RESUBSTITUTION, FOR HIM OR HER AND IN HIS OR HER NAME, PLACE AND STEAD, IN ANY
AND ALL CAPACITIES, TO SIGN ANY AND ALL AMENDMENTS OR POST-EFFECTIVE
AMENDMENTS TO THIS REGISTRATION STATEMENT, AND TO FILE THE SAME, WITH ALL
EXHIBITS THERETO, AND OTHER DOCUMENTS IN CONNECTION THEREWITH, WITH THE
SECURITIES AND EXCHANGE COMMISSION, GRANTING UNTO SAID ATTORNEYS-IN-FACT AND
AGENTS, AND EACH OF THEM, FULL POWER AND AUTHORITY TO DO AND PERFORM EACH AND
EVERY ACT AND THING REQUISITE OR NECESSARY TO BE DONE IN AND ABOUT THE
PREMISES, AS FULLY TO ALL INTENTS AND PURPOSES AS HE OR SHE MIGHT OR COULD DO
IN PERSON, HEREBY RATIFYING AND CONFIRMING ALL THAT EACH SUCH ATTORNEY-IN-FACT
AND AGENT, OR HIS OR HER SUBSTITUTE, MAY LAWFULLY DO OR CAUSE TO BE DONE BY
VIRTUE HEREOF.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS IN THEIR
CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
NAME AND SIGNATURE TITLE DATE
------------------ ----- ----
<S> <C> <C>
/s/ Burlin Coleman Director, Chairman of the March 26, 1997
____________________________________ Board, and Chief Executive
Burlin Coleman Officer
Director March 26, 1997
____________________________________
Charles J. Baird
/s/ Jean R. Hale Director, Secretary and March 26, 1997
____________________________________ Executive Vice President
Jean R. Hale
Director March 26, 1997
____________________________________
Nick A. Cooley
</TABLE>
II-4
<PAGE>
<TABLE>
<S> <C> <C>
Director March 26, 1997
____________________________________
William A. Graham, Jr.
/s/ Brandt Mullins Director March 26, 1997
____________________________________
Brandt Mullins
/s/ M. Lynn Parrish Director March 26, 1997
____________________________________
M. Lynn Parrish
/s/ Ernest M. Rogers Director March 26, 1997
____________________________________
Ernest M. Rogers
Director March 26, 1997
____________________________________
Porter P. Welch
/s/ Richard M. Levy Chief Financial Officer March 26, 1997
____________________________________
Richard M. Levy
</TABLE>
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, CTBI TRUST
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL THE
REQUIREMENTS FOR FILING ON FORM S-3 AND HAS DULY CAUSED THIS REGISTRATION
STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY
AUTHORIZED, IN THE CITY OF PIKEVILLE, COMMONWEALTH OF KENTUCKY, ON MARCH 26,
1997.
CTBI Preferred Capital Trust
By: COMMUNITY TRUST BANCORP, INC. as
depositor
/s/ Richard M. Levy
By: _________________________________
Richard M. Levy
Executive Vice President
Chief Financial Officer
II-6
<PAGE>
EXHIBIT 1.1
CTBI PREFERRED CAPITAL TRUST
FORM OF UNDERWRITING AGREEMENT
April __, 1997
MORGAN KEEGAN & COMPANY, INC.
J.J.B. HILLIARD, W.L. LYONS, INC.
c/o Morgan Keegan & Company, Inc.
50 Front Street
Memphis, Tennessee 38103
Dear Sirs:
CTBI Preferred Capital Trust (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12 of the Delaware Business Code, 12 Del. C. Section
3801 et seq.), and Community Trust Bancorp, Inc., a Kentucky corporation (the
"Company", and together with the Trust, the "Offerors"), as depositor of the
Trust and as guarantor, propose, upon the terms and conditions set forth herein,
to issue and sell 1,200,000 shares of ___% Cumulative Trust Preferred Securities
(with a liquidation amount equal to $25 per Preferred Security) to Morgan Keegan
& Company, Inc. and J.J.B. Hilliard, W.L. Lyons, Inc. (collectively, the
"Underwriters"), severally and not jointly, in the respective amounts set forth
on Schedule A hereto (the "Firm Preferred Securities") and, at the election of
the Underwriters, up to an additional 180,000 shares of such securities (the
"Option Preferred Securities") solely to cover over-allotments, if any. The
Firm Preferred Securities and the Option Preferred Securities are herein
collectively referred to as the "Preferred Securities."
The Preferred Securities and Common Securities (as defined herein) are to be
issued pursuant to the terms of an Amended and Restated Trust Agreement, dated
as of April __, 1997 (the "Trust Agreement"), among the Company, as depositor,
Jean R. Hale and Richard M. Levy, as administrative trustees (the
"Administrative Trustees"), State Street Bank and Trust Company ("Trust
Company"), as property trustee ("Property Trustee"), and Wilmington Trust
Company, as Delaware trustee ("Delaware Trustee" and, together with the Property
Trustee and the Administrative Trustees, the "Trustees"), and the holders from
time to time of undivided interests in the assets of the Trust. The Preferred
Securities will be guaranteed by the Company on a subordinated basis and subject
to certain limitations with respect to distributions and payments upon
liquidation, redemption or otherwise (the "Guarantee") pursuant to a Guarantee
Agreement, dated as of April __, 1997 (the "Guarantee Agreement"), between the
Company and Trust Company, as trustee (the "Guarantee Trustee"). The assets of
the Trust will consist of ____% Subordinated Debentures, due March 31, 2027
(the "Subordinated Debentures"), of the Company which will be issued under a
Subordinated Indenture, dated as of April __, 1997 (the "Indenture"), between
the Company and Trust Company, as indenture trustee (the "Indenture Trustee").
Under certain circumstances, the Subordinated Debentures will be distributable
to the holders of undivided beneficial interests in the assets of the Trust.
<PAGE>
Section 1. Representations and Warranties of the Offerors. The Offerors
jointly and severally represent and warrant to and agree with each of the
Underwriters that:
(a) The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No. 333-
_____) and a related preliminary prospectus for the registration of (i) the
Preferred Securities, (ii) the Guarantee and (iii) the Subordinated Debentures
under the Securities Act of 1933, as amended (the "1933 Act"), and the
applicable rules and regulations thereunder (the "1933 Act Regulations"). The
Company and the Trust have prepared and filed such amendments thereto, if any,
and such amended preliminary prospectuses, if any, as may have been required to
the date hereof, and will file such additional amendments thereto and such
amended prospectuses as may hereafter be required. The registration statement
has been declared effective under the 1933 Act by the Commission, and no stop
order suspending the effectiveness of the registration statement has been issued
and no proceeding for that purpose has been instituted or, to the knowledge of
the Offerors, threatened by the Commission. The term "Registration Statement" as
used in this Agreement shall mean such registration statement at the time such
registration statement became effective (the "Effective Time") including any
prospectus included with such Registration Statement, each document incorporated
therein by reference and, in the event any post-effective amendment thereto
becomes effective prior to the Closing Time (as hereinafter defined), shall also
mean such registration statement as so amended; provided, however, that such
term shall also include all Rule 430A Information deemed to be included in such
registration statement at the time such registration statement becomes effective
as provided by Rule 430A of the 1933 Act Regulations. The term "Preliminary
Prospectus" shall mean any preliminary prospectus included in the Registration
Statement at the Effective Time and each document incorporated therein by
reference. The term "Prospectus" as used in this Agreement shall mean the final
prospectus relating to the Preferred Securities in the form in which it is filed
with the Commission after the date hereof pursuant to Rule 424(b) of the 1933
Act Regulations and each document incorporated therein by reference. The term
"Rule 430A Information" means information with respect to the Preferred
Securities and the offering thereof permitted pursuant to Rule 430A of the 1933
Act Regulations to be omitted from the Registration Statement when it became
effective.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued by the Commission, and no proceedings for that
purpose have been instituted or threatened by the Commission or the state
securities or blue sky authority of any jurisdiction, and each Preliminary
Prospectus and any amendment or supplement thereto, at the time of filing
thereof, conformed in all material respects to the requirements of the 1933 Act
and the 1933 Act Regulations, and did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions
2
<PAGE>
made in reliance upon and in conformity with information furnished in writing to
the Offerors by an Underwriter expressly for use in the Registration Statement.
(c) When the Prospectus is first filed pursuant to Rule 424(b) of the
1933 Act Regulations, when any amendment to the Registration Statement becomes
effective, when any amendment or supplement to the Prospectus is filed with the
Commission and at the Closing Time and Date of Delivery (as hereinafter
defined), (i) the Registration Statement, the Prospectus and any amendments
thereof and supplements thereto will conform in all material respects with the
applicable requirements of the 1933 Act and the 1933 Act Regulations, and (ii)
neither the Registration Statement, the Prospectus nor any amendment or
supplement thereto will contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to (A) that part of the Registration
Statement that constitutes the Statement of Eligibility and Qualification (Form
T-1) under the Trust Indenture Act of 1939, as amended (the "1939 Act"), of the
Property Trustee, the Indenture Trustee and the Guarantee Trustee, and (B) any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Offerors by an Underwriter expressly authorizing its
use in the Registration Statement.
(d) Each document incorporated by reference in the Registration Statement
(an "Incorporated Document"), as of the date such Incorporated Document was
filed with the Commission, conformed in all material respects to the
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations of the Commission thereunder, and when read
together with the other information in the Preliminary Prospectus or Prospectus
(as applicable), as of the date hereof and at the Closing Time, did not and will
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the requirements
of the Exchange Act and the rules and regulations thereunder and when read
together with the other information in the Prospectus, as of the date hereof and
at the Closing Time, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(e) The conditions for the use by the Company and the Trust of a
registration statement on Form S-3 set forth in the General Instructions to Form
S-3 have been satisfied and the Company and the Trust are entitled to use such
form for the transactions contemplated herein.
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the state of Kentucky with all
requisite
3
<PAGE>
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus. The Company is qualified to transact business as a foreign
corporation and is in good standing in each of the jurisdictions in which the
ownership or leasing of its properties or the nature or conduct of its business
requires such qualification, except where the failure to do so would not have a
material adverse effect on the condition (financial or other), business,
properties, net worth or results of operations of the Company and its
consolidated subsidiaries taken as a whole. The Company is duly registered as a
bank holding company under the Bank Holding Company Act of 1956, as amended.
(g) The subsidiaries of the Company that are engaged in the banking
business, savings and loan business or trust business are listed on Schedule B
hereto (the "Principal Subsidiaries"). Each of the Principal Subsidiaries is
duly organized and validly existing and in good standing under the laws of the
jurisdiction of its organization with all requisite power and authority to own,
lease and operate its properties and to conduct its business as described in the
Registration Statement and the Prospectus. Each of the Principal Subsidiaries is
authorized to transact business in each of the jurisdictions in which the
ownership or leasing of its properties or the nature of or conduct of its
business requires such qualification, except where the failure to be so
qualified would not have a material adverse effect on the condition (financial
or other), business, properties, net worth or results of operations of the
Company and its consolidated subsidiaries taken as a whole. All of the issued
and outstanding shares of capital stock of each Principal Subsidiary has been
duly authorized and validly issued, and is fully paid and non-assessable and is
owned by the Company free and clear of any security interest, pledge, lien or
other encumbrance except for the pledge of the shares of Community Trust Bank,
FSB, one of the Principal Subsidiaries, pursuant to a revolving credit
agreement of the Company.
(h) The Indenture has been duly qualified under the 1939 Act and has been
duly authorized, executed and delivered by the Company and is a valid and
binding agreement of the Company, enforceable in accordance with its terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other laws of general applicability
relating to or affecting creditors' rights, or by general principles of equity
whether considered at law or in equity (the "Permitted Exceptions").
(i) The Trust Agreement has been duly qualified under the 1939 Act and has
been duly authorized by the Company and, upon execution and delivery thereof by
the Company and the Administrative Trustees, and assuming due authorization,
execution and delivery thereof by the Property Trustee and the Delaware Trustee,
the Trust Agreement will, as of the Closing Time, be a valid and binding
agreement of the Company and the Administrative Trustees, enforceable in
accordance with its terms, except to the extent that enforceability may be
limited by the Permitted Exceptions.
(j) The Guarantee has been duly qualified under the 1939 Act and has been
duly authorized by the Company and, upon execution and delivery thereof by the
Company, the Guarantee will, as of the Closing Time, be a valid and binding
agreement of the Company,
4
<PAGE>
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by the Permitted Exceptions.
(k) The Subordinated Debentures have been duly authorized and, when
executed by the Company, authenticated by the Indenture Trustee, issued in
accordance with the Indenture and delivered to the Trust against payment
therefor as described in the Registration Statement and the Prospectus, will
constitute valid and binding obligations of the Company, enforceable in
accordance with their terms, except to the extent that enforceability may be
limited by the Permitted Exceptions.
(l) The Preferred Securities have been duly authorized by the Trust
Agreement and, when issued and delivered in accordance with the terms of this
Agreement, will be validly issued undivided beneficial interests in the assets
of the Trust, and the issuance of such Preferred Securities will not be subject
to any preemptive or similar rights. The Common Securities to be issued to the
Company have been authorized by the Trust Agreement and, when executed in
accordance with the terms of the Trust Agreement and delivered to the Company
against payment therefor as described in the Registration Statement and the
Prospectus, will represent validly issued undivided beneficial interests in the
assets of the Trust.
(m) This Agreement has been duly authorized, executed and delivered by
each of the Offerors and constitutes a valid and binding agreement of each of
them, enforceable in accordance with its terms, except to the extent that
enforceability may be limited by the Permitted Exceptions and except to the
extent enforcement of the indemnification provisions set forth in Section 6 of
this Agreement may be limited by federal or state securities laws or the public
policy underlying such laws.
(n) No authorization, approval, consent or order of, or any filing or
declaration with, any court or governmental authority or agency is necessary in
connection with the issuance and sale of the Common Securities or the offering
of the Preferred Securities, the Subordinated Debentures or the Guarantee
hereunder or the consummation of the transactions contemplated hereby, except as
may have been obtained under the 1933 Act and the 1933 Act Regulations, the 1939
Act and the rules and regulations thereunder and such as may be required by the
National Association of Securities Dealers, Inc. (the "NASD") in connection with
the purchase and distribution by the Underwriters of the Preferred Securities
and such as may be required under state securities laws.
(o) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated therein,
there has been no material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Trust or the Company
and its subsidiaries, considered as one enterprise, whether or not arising in
the ordinary course of business.
5
<PAGE>
(p) The Company's obligations under the Guarantee Agreement are
subordinate and junior in right of payment to all liabilities of the Company and
are pari passu with the most senior preferred stock issued by the Company.
(q) The Subordinated Debentures are subordinated and junior in right of
payment to all "Senior Obligations" (as defined in the Indenture) of the
Company.
(r) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated herein and compliance by the
Company with its obligations hereunder will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of any
lien, charge or encumbrance upon any property or assets of the Company or any of
the Principal Subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of the
Principal Subsidiaries is a party or by which it or any of them may be bound, or
to which any of the property or assets of the Company or any of the Principal
Subsidiaries is subject (except for conflicts, breaches and defaults which would
not, individually or in the aggregate, be materially adverse to the Company and
its subsidiaries taken as a whole or materially adverse to the transactions
contemplated by this Agreement), nor will such action result in any material
violation of the provisions of the articles of incorporation or by-laws of the
Company or any Principal Subsidiary, or any applicable law, administrative
regulation or administrative or court decree.
(s) Except as disclosed in the Prospectus, there is no action, suit or
proceeding before or by any government, governmental instrumentality or court,
domestic or foreign, now pending or, to the best knowledge of the Offerors,
threatened, against or affecting the Company, any Principal Subsidiary or the
Trust that is required to be disclosed in the Prospectus, other than actions,
suits or proceedings that are not reasonably expected, individually or in the
aggregate, to have a material adverse effect on the condition, financial or
otherwise, or in the earnings or business affairs of the Company or the Trust,
whether or not arising in the ordinary course of business.
(t) The Trust possesses adequate certificates, authorities or permits
issued by the appropriate state, federal or local regulatory agencies or bodies
to conduct the business now operated by it, and the Trust has not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding would materially and
adversely affect the condition, financial or otherwise, or the earnings or
business affairs of the Trust.
(u) The execution, delivery and performance of this Agreement, the
issuance and sale of the Preferred Securities and the Common Securities, and the
consummation of the transactions contemplated herein and compliance by the Trust
with its obligations hereunder have been duly authorized by all necessary action
(corporate or otherwise) on the part of the
6
<PAGE>
Trust and do not and will not result in any violation of the Trust Agreement or
Certificate of Trust and do not and will not conflict with, or result in a
breach of any of the terms or provisions of, or constitute a default under, or
result in the creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Trust under (A) any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the Trust
is a party or by which it may be bound or to which any of its properties may be
subject or (B) any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other governmental
body having jurisdiction over the Trust, or any of its properties (except for
conflicts, breaches, violations or defaults which would not, individually or in
the aggregate, be materially adverse to the Trust, or materially adverse to the
transactions contemplated by this Agreement).
(v) The Company's authorized, issued and outstanding capital stock is
as disclosed in the Prospectus. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued, are fully paid and
nonassessable and conform to the description of the Company's capital stock
contained in the Prospectus.
(w) The financial statements of the Company and its consolidated
subsidiaries included or incorporated in the Registration Statement and
Prospectus present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates indicated and the results of
operations and cash flows for the Company and its consolidated subsidiaries for
the periods specified, all in conformity with generally accepted accounting
principles applied on a consistent basis. Since the respective dates as of
which information is given in the Registration Statement and the Prospectus, and
except as otherwise stated in the Registration Statement and the Prospectus,
there has not been (i) any material change in the capital stock, long-term debt,
obligations under capital leases or short-term borrowings of the Company or the
Principal Subsidiaries, or (ii) any material adverse change, or any development
which could reasonably be seen as involving a prospective material adverse
change, in or affecting the business, prospects, properties, assets, results of
operations or condition (financial or other) of the Company or the Principal
Subsidiaries other than developments, if any, generally affecting the banking
business in the United States.
(x) Ernst & Young, who have examined and are reporting upon the audited
financial statements and schedules included in the Registration Statement, are,
and were during the periods covered by their reports included in the
Registration Statement and the Prospectus, independent public accountants within
the meaning of the 1933 Act and the 1933 Act Regulations.
(y) The descriptions in the Registration Statement and the Prospectus of
the contracts, leases and other legal documents therein described present fairly
the information required to be shown, and there are no contracts, leases, or
other documents of a character required to be described in the Registration
Statement or the Prospectus or to be filed as exhibits to the Registration
Statement which are not described or filed as required.
7
<PAGE>
(z) Each of the Company's and the Principal Subsidiaries' respective
systems of internal accounting controls taken as a whole is sufficient to meet
the broad objectives of internal accounting control insofar as those objectives
pertain to the prevention or detection of errors or irregularities in amounts
that would be material in relation to the Company's or the Principal
Subsidiaries' financial statements; and, none of the Company, the Principal
Subsidiaries, or any employee or agent thereof, has made any payment of funds of
the Company or the Principal Subsidiaries, or received or retained any funds and
no funds of the Company or the Principal Subsidiaries, have been set aside to be
used for any payment, in each case in violation of any law, rule or regulation.
(aa) Neither of the Offerors is, and upon the issuance and sale of the
Preferred Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus neither will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "1940 Act").
Section 2. Sale and Delivery of the Preferred Securities to the
Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained,
and subject to the terms and conditions herein set forth, the Trust agrees to
issue and sell to each of the Underwriters the Firm Preferred Securities, and
each Underwriter agrees, severally and not jointly, to purchase from the Trust
the number of Preferred Securities set forth opposite the name of such
Underwriter in Schedule A, at a price per Capital Security of $25 per share. In
the event and to the extent that the Underwriters shall exercise the election to
purchase Option Preferred Securities as provided below, the Trust agrees to
issue and sell to the Underwriters, and the Underwriters agree to purchase from
the Trust, at the same purchase price per Capital Security set forth in the
first sentence of this Section 2, the number of shares of Option Preferred
Securities as to which such election shall have been exercised. If the option
is exercised as to all or any portion of the Option Preferred Securities, the
Option Preferred Securities as to which the option is exercised shall be
purchased by the Underwriters, severally and not jointly, in proportion to their
purchases of the Firm Preferred Securities.
As compensation to the Underwriters for their commitments hereunder,
and in view of the fact that the proceeds of the sale of the Preferred
Securities will be used by the Trust to purchase the Subordinated Debentures of
the Company, the Company hereby agrees to pay at the Closing Time and the Date
of Delivery, if applicable, to Morgan Keegan & Company, Inc., for the accounts
of the several Underwriters, an amount equal to $[__] per Capital Security for
the Preferred Securities to be delivered at the Closing Time and on the Date of
Delivery, respectively.
(b) In addition, on the basis of the representations and warranties herein
contained, and subject to the terms and conditions herein set forth, the Trust
hereby grants an option to the Underwriters, severally and not jointly, to
purchase up to an additional 180,000
8
<PAGE>
shares of Option Preferred Securities at the same purchase price as shall be
applicable to the Firm Preferred Securities. The option hereby granted will
expire if not exercised within the thirty (30) day period after the date of the
Prospectus by giving written notice to the Trust. The option granted hereby may
be exercised in whole or in part (but not more than once), only for the purpose
of covering over-allotments that may be made in connection with the offering and
distribution of the Firm Preferred Securities. The notice of exercise shall set
forth the number of Option Preferred Securities as to which the several
Underwriters are exercising the option, and the time and date of payment and
delivery thereof. Such time and date of delivery (the "Date of Delivery") shall
be determined by you but shall not be later than three full business days after
the exercise of such option, nor in any event prior to the Closing Time. If the
option is exercised as to all or any portion of the Option Preferred Securities,
the Option Preferred Securities as to which the option is exercised shall be
purchased by the Underwriters, severally and not jointly, in proportion to their
purchases of the Firm Preferred Securities.
(c) Payment of the purchase price for and delivery of certificates in
definitive form representing the Firm Preferred Securities shall be made at the
offices of Morgan Keegan & Company, Inc., 50 Front Street, Memphis, Tennessee
38103 or at such other place as shall be agreed upon by the Company, the Trust
and you, at 10:00 a.m., either (i) on the third full business day after the
execution of this Agreement, or (ii) at such other time not more than ten full
business days thereafter as you, the Company and the Trust shall determine
(unless, in either case, postponed pursuant to the term hereof), (such date and
time of payment and delivery being herein called the "Closing Time"). In
addition, in the event that any or all of the Option Preferred Securities are
purchased by the Underwriters, payment of the purchase price for and delivery of
certificates in definitive form representing the Option Preferred Securities
shall be made at the offices of Morgan Keegan & Company, Inc. in the manner set
forth above, or at such other place as the Company, the Trust and you shall
determine, on the Date of Delivery as specified in the notice from you to the
Trust. Payment for the Firm Preferred Securities and the Option Preferred
Securities shall be made to the Trust by wire transfer in same-day funds to the
accounts designated to the Underwriters in writing by the Trust against delivery
to you for the respective accounts of the Underwriters of the Shares to be
purchased by them.
At the Closing Time and the Date of Delivery, if applicable, the
Company will pay, or cause to be paid, the commission payable at such time to
the Underwriters under this Section 2 hereof by wire transfer in same-day funds
to the account or accounts designated to the Company in writing by Morgan Keegan
& Company, Inc., on behalf of the several Underwriters.
(d) The Preferred Securities to be purchased by each Underwriter hereunder
will be represented by one or more definitive global Preferred Securities in
book entry form which will be deposited by or on behalf of the Trust with The
Depository Trust Company ("DTC") or its designated custodian. The Trust will
deliver the Preferred Securities to Morgan Keegan & Company, Inc. for the
account of each
9
<PAGE>
Underwriter, against payment to the Trust as provided in Paragraph (c) of this
Section 2.
(e) You intend to offer the Preferred Securities to the public as set
forth in the Prospectus, but after the initial public offering of such Preferred
Securities you may in your discretion vary the public offering price.
Section 3. Certain Covenants of the Company and the Trust. The Company and
the Trust covenant and agree with each Underwriter as follows:
(a) The Trust and the Company will prepare the Prospectus in a form
approved by the Underwriters, will comply with the requirements of Rule 430A and
will file such Prospectus with the Commission pursuant to Rule 424(b) not later
than the Commission's close of business on the second business day following the
execution and delivery of this Agreement. The Trust and the Company will notify
the Underwriters immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall have become
effective and of the filing of the Prospectus pursuant to Rule 424(b), (ii) of
the receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification
of the Preferred Securities for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceeding for such purpose. The Trust and the
Company will make every reasonable effort to prevent the issuance of any stop
order or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification and, if any
such order is issued, to obtain the lifting thereof at the earliest possible
moment.
(b) The Trust and the Company will deliver to the Underwriters one
manually executed copy of the Registration Statement as originally filed and of
each amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated by reference into the Prospectus),
such number of conformed copies of the Registration Statement as originally
filed and of each amendment thereto (including documents incorporated by
reference into the Prospectus by without exhibits) as such Underwriters may
reasonably request and copies of each Preliminary Prospectus, the Prospectus and
any amended or supplemented Prospectus.
(c) The Trust and the Company will furnish to the Underwriters, from time
to time during the period when the Prospectus is required to be delivered under
the 1933 Act, such additional number of copies of the Prospectus (as amended or
supplemented, if
10
<PAGE>
applicable) as they may reasonable request for the purposes contemplated by the
1933 Act or the 1933 Act Regulations.
(d) The Trust and the Company will deliver to the Underwriters notice of
their intention to prepare or file any amendment to the Registration Statement
(including any post-effective amendment) or any amendment or supplement to the
Prospectus which the Trust and the Company propose for use by the Underwriters
in connection with the offering of the Preferred Securities and which differs
from the prospectus on file at the Commission at the time the Registration
Statement became effective, whether or not such revised prospectus is required
to be filed pursuant to Rule 424(b) of the 1933 Act Regulations, will furnish
the Underwriters and counsel for the Underwriters with copies of any such
amendment or supplement a reasonable amount of time prior to such proposed
filing or use, as the case may be, and will not file any such amendment or
supplement or use any such prospectus to which the Underwriters or counsel for
the Underwriters shall reasonably object.
(e) If any event shall occur as a result of which it is necessary to amend
or supplement the Prospectus (as then amended or supplemented) in order to
ensure that the Prospectus does not contain an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, or
it is necessary to amend or supplement the Prospectus to comply with the 1933
Act or any other law, the Company and the Trust will forthwith prepare and
furnish, at the Company's expense, to the Underwriters, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances under which
they were made, be misleading or so that the Prospectus will comply with the
1933 Act or such other law, as the case may be.
(f) The Trust and the Company, during the period when the Prospectus is
required to be delivered under the 1933 Act, will file promptly all documents
required to be filed with the Commission pursuant to Section 13, 14, or 15 of
the Exchange Act.
(g) The Company and the Trust will use their respective best efforts to
qualify the Preferred Securities for offer and sale under the securities or blue
sky laws of such jurisdictions as any Underwriter shall reasonably request and
to pay all reasonable expenses (including reasonable fees and disbursements of
counsel) in connection with such qualification and the printing of any memoranda
concerning the aforesaid qualification; provided, however, that neither Offeror
shall be required to qualify to do business in any jurisdiction where it is not
now qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where they are not now subject.
(h) During the period beginning on the date hereof and continuing to and
including the Date of Delivery, the Company and the Trust will not to offer,
sell, contract to sell or otherwise dispose of (other than in an offering made
exclusively outside the United
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States) any securities of the Company or the Trust substantially similar to the
Preferred Securities or any securities convertible into or exchangeable for the
Preferred Securities without the prior written consent of the Underwriters.
(i) During the period when the Preferred Securities are outstanding, the
Company will not be or become an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the 1940 Act.
(j) Neither the Company nor the Trust shall enter into any contractual
agreement with respect to the distribution of the Preferred Securities except
for the arrangements with the Underwriters.
(k) The Company will make generally available to its security holders, as
soon as it is practicable to do so, but in any event not later than 90 days
after the close of the period covered thereby, an "earning statement" (which
need not be audited) complying with the provisions of Rule 158 of the 1933 Act
Regulations and, covering a period of at least 12 consecutive months beginning
on the first day of the Company's first full fiscal quarter after the effective
date (as defined in Rule 158) of the Registration Statement.
(l) The Company and the Trust will use proceeds received from the sale of
the Preferred Securities in the manner specified in the Prospectus under "Use of
Proceeds."
(m) For a period of five years after the Closing Time the Trust and the
Company will furnish to the Underwriters copies of all reports and
communications delivered to the Trust's shareholders or to holders of the
Preferred Securities and will also furnish copies of all reports (excluding
exhibits) filed with the Commission on Forms 8-K, 10-Q and 10-K, and all other
reports and information furnished to its shareholders generally, not later than
the time such reports are first furnished to its shareholders generally.
Section 4. Payment of Expenses. The Company will pay and bear all costs,
fees and expenses incident to the performance of the Offerors obligations under
this Agreement (excluding fees and expenses of counsel for the Underwriters,
except as specifically set forth below), including (a) the preparation, printing
and filing of the Registration Statement (including financial statements and
exhibits), as originally filed and as amended, the Preliminary Prospectuses, the
Prospectus and any amendments or supplements thereto, and the cost of furnishing
copies thereof to the Underwriters, (b) the preparation, printing and
distribution of this Agreement, the Indenture, the Guarantee Agreement, the
Trust Agreement, the certificates representing the Preferred Securities, the
Blue Sky Memoranda and any instruments or documents relating to any of the
foregoing, (c) the issuance and delivery of the Preferred Securities to the
Underwriters, including any transfer taxes payable upon the sale of the
Preferred Securities to the Underwriters (other than transfer taxes on resales
by the Underwriters), (d) the fees and disbursements of the Company's and the
Trust's counsel and accountants, (e) the qualification of the Preferred
Securities, the Subordinated Debentures and the Guarantee under the applicable
securities laws in accordance with the terms of
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this Agreement, including filing fees and fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the Blue Sky
Memoranda, (f) all costs, fees and expenses in connection with the notification
to the Nasdaq Stock Market of the proposed issuance of the Preferred Securities,
(g) filing fees relating to the review of the offering by the NASD, (h) the
transfer agent's and registrar's fees and all miscellaneous expenses referred to
in Part II of the Registration Statement, (i) costs related to travel and
lodging incurred by the Company and its representatives relating to meetings
with and presentations to prospective purchasers of the Preferred Securities
reasonably determined by the Underwriters to be necessary or desirable to effect
the sale of the Preferred Securities to the public, (j) the fees and expenses of
the Indenture Trustee, the Guarantee Trustee and the Trustees, including the
fees and disbursements of counsel for any such Trustees, (k) any fees payable in
connection with the ratings, if any, of the Preferred Securities and
Subordinated Debentures, and (l) all other costs and expenses incident to the
performance of the Company's or the Trust's obligations hereunder (including
costs incurred in closing the purchase of the Option Preferred Securities, if
any) that are not otherwise specifically provided for in this section. The
Company, upon your request, will provide funds in advance for filing fees in
connection with "blue sky" qualifications.
If the sale of the Preferred Securities provided for herein is not
consummated because any condition to the obligations of the Underwriters set
forth in Section 5 hereof is not satisfied, because of any termination pursuant
to Section 8 hereof or because of any refusal, inability or failure on the part
of the Company or the Trust to perform any agreement herein or comply with any
provision hereof other than by reason of default by any of the Underwriters, the
Company will reimburse the Underwriters severally on demand for all reasonable
out-of-pocket expenses, including fees and disbursements of Underwriters'
counsel, reasonably incurred by the Underwriters in reviewing the Registration
Statement and the Prospectus, and in investigating and making preparations for
the marketing of the Preferred Securities.
Section 5. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase and pay for (i) the Firm Preferred Securities that they
have respectively agreed to purchase pursuant to this Agreement (and any Option
Preferred Securities as to which the option granted in Section 2 has been
exercised and the Date of Delivery determined by you is the same as the Closing
Time) at the Closing Time and (ii) the Option Preferred Securities at the Date
of Delivery of the Option Shares, are subject to the accuracy of the
representations and warranties of the Offerors contained herein as of the
Closing Time or the Date of Delivery, as the case may be, and to the accuracy of
the representations and warranties of the Offerors contained in certificates of
any officer of the Company or trustees of the Trust delivered pursuant to the
provisions hereof, to the performance by the Offerors of their obligations
hereunder, and to the following further conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act and no proceedings for that
purpose shall have been instituted or shall be pending or, to your knowledge or
the knowledge of the Offerors, shall be contemplated by the Commission, and any
request on the part of the Commission for additional information shall have been
complied with to the satisfaction of counsel for the
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Underwriters. If the Company and the Trust have elected to rely upon Rule 430A,
a Prospectus containing the Rule 430A Information shall have been filed with the
Commission in accordance with Rule 424(b) (or a post-effective amendment
providing such information shall have been filed and declared effective in
accordance with the requirements of Rule 430A).
(b) At the Closing Time, you shall have received a favorable opinion of
Greenebaum Doll & McDonald PLLC, counsel for the Company and the Trust, dated
as of the Closing Time, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of
Kentucky withh the corporate power and authority to own, lease and
operate its properties and to conduct its business as described in
the Registration Statement and the Prospectus, and is duly
registered as a banking holding company under the Bank Holding
Company Act of 1956, as amended. The Company is qualified to
transact business as a foreign corporation and is in good standing
in each of the jurisdictions in which the ownership or leasing of
the Company's properties or the nature or conduct of its business
requires such qualification, except where the failure to do so
would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its consolidated subsidiaries taken
as a whole.
(ii) Each of the Principal Subsidiaries is validly existing and in good
standing under the laws of the jurisdiction of its organization.
Each such entity has all requisite power and authority to own,
lease and operate its properties and conduct its business as
described in the Registration Statement and the Prospectus. Each
such entity is duly qualified to do business and is in good
standing in each other jurisdiction in which the ownership or
leasing of its properties or the nature or conduct of its business
requires such qualification, except where the failure to do so
would not have a material adverse effect on the condition
(financial or other), business, properties, net worth or results of
operations of the Company and its consolidated subsidiaries taken
as a whole.
(iii) All of the issued and outstanding shares of capital stock of each
Principal Subsidiary has been duly authorized and validly issued,
and is fully paid and non-assessable and the Company is the sole
record owner of the outstanding capital stock of each of the
Principal Subsidiaries.
(iv) This Agreement has been duly authorized, executed and delivered by
the Company and, assuming due authorization, execution and delivery
by the
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Underwriters, constitutes a valid and binding agreement of the
Company, enforceable i n accordance with its terms, except to the
extent enforceability may be limited by the Permitted Exceptions
and except to the extent that enforcement of the indemnification
provisions set forth in Section 6 of this Agreement may be limited
by federal or state securities laws or the public policy underlying
such laws.
(v) No authorization, approval, consent or order of, or filing or
declaration with, any court or governmental agency or body is
necessary for the valid authorization, issuance, sale and delivery
of the Preferred Securities, the execution, delivery and
performance of this Agreement and the consummation by the Company
of the transactions contemplated hereby, except such as have been
obtained under the 1933 Act and the 1933 Act Regulations, the 1939
Act and the rules and regulations thereunder and such as may be
necessary under state securities laws or required by the NASD in
connection with the purchase and distribution of the Preferred
Securities by the Underwriters, as to which such counsel need
express no opinion.
(vi) The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not
conflict with or result in a breach or violation of any of the
terms and provisions of, or (with or without the giving notice or
the passage of time or both) constitute a default under, the
charter or by-laws of the Company or the Principal Subsidiaries,
respectively, or, under any indenture, mortgage, deed of trust,
loan agreement, note, lease or other agreement or instrument to
which the Company or the Principal Subsidiaries, respectively, is a
party or to which the Company or the Principal Subsidiaries,
respectively, any of their respective properties or other assets,
is subject; or, to such counsel's knowledge, any applicable
statute, judgment, decree, order, rule or regulation of any court
or governmental agency or body; or to such counsel's knowledge,
result in the creation or imposition of any lien, charge, claim or
encumbrance upon any property or asset of the Company or the
Subsidiaries, respectively.
(vii) The statements set forth in the Registration Statement and the
Prospectus under the captions "Description of Preferred
Securities," "Description of Subordinated Debentures," "Description
of Guarantee" and "Relationship among the Preferred Securities, the
Subordinated Debentures and the Guarantee," insofar as they purport
to describe the provisions of the laws and documents referred to
therein, fairly summarize the matters described therein.
(viii) The Indenture has been duly qualified under the 1939 Act and has
been duly authorized, executed and delivered by the Company and is
a valid and
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binding agreement of the Company, enforceable in accordance with
its terms, except to the extent that enforceability may be limited
by the Permitted Exceptions.
(ix) The Trust Agreement has been duly qualified under the 1939 Act and
has been duly authorized, executed and delivered by the Company and
the Administrative Trustees, and assuming due authorization,
execution and delivery thereof by the Property Trustee and the
Delaware Trustee, the Trust Agreement is a valid and binding
agreement of the Company and the Administrative Trustees
enforceable in accordance with its terms, except to the extent that
enforceability may be limited by the Permitted Exceptions.
(x) The Guarantee has been duly qualified under the 1939 Act and has
been duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company, enforceable in
accordance with its terms, except to the extent that enforceability
may be limited by the Permitted Exceptions.
(xi) The Subordinated Debentures have been duly authorized and executed
by the Company and, when authenticated by the Indenture Trustee, in
accordance with the Indenture and delivered to the Trust against
payment therefor as described in the Registration Statement and the
Prospectus, will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, except to the
extent that enforceability may be limited by the Permitted
Exceptions.
(xii) To such counsel's knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation against the
Company, the Principal Subsidiaries or any of their respective
officers and directors or to which the properties, assets or rights
of any such entity are subject, before or brought by any court or
governmental agency or body or board of arbitrators, that are
required to be described in the Registration Statement or the
Prospectus but are not described as required.
(xiii) The Registration Statement has become effective under the 1933 Act
and, to the knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been instituted or is pending or
contemplated under the 1933 Act. Other than financial statements
and other financial and operating data and schedules contained
therein, as to which counsel need express no opinion, the
Registration Statement, all Preliminary Prospectuses, the
Prospectus and any amendment or supplement thereto, appear on their
face to conform as to form in all material respects with the
requirements of the
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1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations thereunder.
(xiv) The statements of law or legal conclusions and opinions set forth
in the Registration Statement under the caption "Certain United
States Federal Income Tax Consequences," subject to the assumptions
and conditions described therein, constitute such counsel's
opinion.
(xv) The Trust is not an "investment company," or a company "controlled"
by an "investment company," within the meaning of the 1940 Act.
(xvi) The descriptions in the Prospectus of statutes, regulations, legal
or governmental proceedings are accurate and present fairly a
summary of the information required to be shown under the 1933 Act
and the 1933 Act Regulations.
Such counsel also shall state that they have no reason to believe that the
Registration Statement, or any further amendment thereto made prior to the
Closing Time or the Date of Delivery, as the case may be, on its effective date
and as of the Closing Time or the Date of Delivery, as the case may be,
contained or contains any untrue statement of a material fact or omitted or
omits to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, or any
amendment or supplement thereto made prior to the Closing Time or the Date of
Delivery, as the case may be, as of its issue date and as of the Closing Time or
the Date of Delivery, as the case may be, contained or contains any untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading (provided that such
counsel need express no belief regarding the financial statements and related
schedules and other financial data contained in the Registration Statement, any
amendment thereto, or the Prospectus, or any amendment or supplement thereto).
In rendering the opinions set forth in Section 5(b), such counsel may
rely on the following:
(A) as to matters involving the application of laws other than
the laws of the United States and jurisdictions in which they are
admitted, to the extent such counsel deems proper and to the extent
specified in such opinion, upon an opinion or opinions (in form and
substance reasonably satisfactory to Underwriters' counsel) of
other counsel familiar with the applicable laws, and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and
certificates or
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other written statements of officers or departments of various
jurisdictions, having custody of documents respecting the
existence or good standing of the Company provided that copies
of all such opinions, statements or certificates shall be
delivered to Underwriters' counsel. The opinion of counsel for
the Company shall state that the opinion of any other counsel,
or certificate or written statement, on which such counsel is
relying is in form satisfactory to such counsel and that you
and they are justified in relying thereon.
(c) At the Closing Time, you shall have received a favorable opinion from
King & Spalding counsel for the Underwriters, dated as of the Closing Time, with
respect to the issuance and sale of the Preferred Securities, the Registration
Statement, the Prospectus and other related matters as the Underwriters may
reasonably require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them to
pass on such matters.
(d) The favorable opinion of Richards, Layton & Finger, special Delaware
counsel to the Offerors, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Act; all
filings required under the laws of the State of Delaware with
respect to the formation and valid existence of the Trust as a
business trust have been made; the Trust has all necessary
power and authority to own property and to conduct its business
as described in the Registration Statement and the Prospectus
and to enter into and perform its obligations under this
Agreement, the Preferred Securities and the Common Securities.
(ii) Assuming due authorization, execution and delivery by the
Company and the Trustees, the Trust Agreement is a valid and
binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as enforceability
thereof may be limited by the Permitted Exceptions.
(iii) The Common Securities have been duly authorized by the Trust
Agreement and are validly issued and represent undivided
beneficial interests in the assets of the Trust.
(iv) The Preferred Securities have been duly authorized by the Trust
Agreement and are validly issued and, subject to the terms of
the Trust Agreement, when delivered to and paid for by the
Underwriters
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pursuant to this Agreement, will be validly issued, fully paid
and non-assessable beneficial interests in the assets of the
Trust; the holders of the Preferred Securities will, subject to
the terms of the Trust Agreement, be entitled to the same
limitation of personal liability under Delaware law as is
extended to stockholders of private corporations for profit;
and the issuance of the Preferred Securities is not subject to
preemptive or other similar rights.
(v) This Agreement has been duly authorized by the Trust.
(vi) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the execution, delivery and
performance by the Trust of this Agreement, the consummation by
the Trust of the transactions contemplated hereby and the
compliance by the Trust with its obligations hereunder will not
violate (A) any of the provisions of the Certificate of Trust
or the Trust Agreement or (B) any applicable Delaware law or
administrative regulation.
(e) The favorable opinion of Richards, Layton & Finger, special Delaware
counsel to the Delaware Trustee, in form and substance satisfactory to counsel
for the Underwriters, to the effect that:
(i) The Delaware Trustee is a Delaware banking corporation with
trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware with all
necessary power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of the
Trust Agreement.
(ii) The execution, delivery and performance by the Delaware Trustee
of the Trust Agreement has been duly authorized by all
necessary corporate action on the part of the Delaware Trustee.
The Trust Agreement has been duly executed and delivered by the
Delaware Trustee, and constitutes the legal, valid and binding
obligation of the Delaware Trustee, enforceable against the
Delaware Trustee in accordance with its terms, except as
enforceability thereof may be limited by the Permitted
Exceptions.
(iii) The execution, delivery and performance of the Trust Agreement
by the Delaware Trustee does not conflict with or constitute a
breach of the articles of organization or bylaws of the
Delaware Trustee.
(iv) No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking authority is
required for
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the execution, delivery or performance by the Delaware Trustee
of the Trust Agreement.
(f) The favorable opinion, dated as of Closing Time, of Bingham Dana &
Gould, counsel of Trust Company, as Indenture Trustee under the Indenture, as
Guarantee Trustee under the Guarantee Agreement, and as Property Trustee under
the Trust Agreement, in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) Trust Company is a state chartered trust company, duly
organized, validly existing and in good standing under the laws
of the Commonwealth of Massachusetts with all necessary power
and authority to execute and deliver, and to carry out and
perform its obligations under the terms of the Trust Agreement,
the Indenture and the Guarantee Agreement.
(ii) The execution, delivery and performance by the Indenture
Trustee of the Indenture, the execution, delivery and
performance by the Property Trustee of the Trust Agreement, and
the execution, delivery and performance by the Guarantee
Trustee of the Guarantee Agreement have been duly authorized by
all necessary corporate action on the part of the Indenture
Trustee, the Property Trustee and the Guarantee Trustee,
respectively. The Indenture has been duly executed and
delivered by the Indenture Trustee, and constitutes the legal,
valid and binding obligation of the Indenture Trustee,
enforceable against the Indenture Trustee in accordance with
its terms, except as enforceability thereof may be limited by
the Permitted Exceptions. The Trust Agreement has been duly
executed and delivered by the Property Trustee, and constitutes
the legal, valid and binding obligation of the Property
Trustee, enforceable against the Property Trustee in accordance
with its terms, except as enforceability thereof may be limited
by the Permitted Exceptions. The Guarantee Agreement has been
duly executed and delivered by the Guarantee Trustee, and
constitutes the legal, valid and binding obligation of the
Guarantee Trustee, enforceable against the Guarantee Trustee in
accordance with its terms, except as enforceability thereof may
be limited by the Permitted Exceptions.
(iii) The execution, delivery and performance of the Indenture by the
Indenture Trustee, does not conflict with or constitute a
breach of the articles of organization or bylaws of the
Indenture Trustee. The execution, delivery and performance of
the Trust Agreement by the Property Trustee does not conflict
with or constitute a breach of the articles of organization or
bylaws of the Property Trustee. The
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execution, delivery and performance of the Guarantee Agreement
by the Guarantee Trustee does not conflict with or constitute a
breach of the articles of organization or bylaws of the
Guarantee Trustee.
(iv) No consent, approval or authorization of, or registration with
or notice to, any Massachusetts or federal banking authority is
required for the execution, delivery or performance by the
Indenture Trustee of the Indenture. No consent, approval or
authorization of, or registration with or notice to, any
Massachusetts or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of
the Trust Agreement. No consent, approval or authorization of,
or registration with or notice to, any Massachusetts or federal
banking authority is required for the execution, delivery or
performance by the Guarantee Trustee of the Guarantee
Agreement.
(g) At the Closing Time, (i) the Registration Statement, and the
Prospectus, as they may then be amended or supplemented, shall contain all
statements that are required to be stated therein under the 1933 Act and the
1933 Act Regulations and in all material respects shall conform to the
requirements of the 1933 Act and the 1933 Act Regulations; the Company shall
have complied in all material respects with Rule 430A (if it shall have elected
to rely thereon) and neither the Registration Statement nor the Prospectus, as
they may then be amended or supplemented, shall contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) there shall not
have been, since the respective dates as of which information is given in the
Registration Statement, any material adverse change in the business, prospects,
properties, assets, results of operations or condition (financial or otherwise)
of the Company or the Trust, whether or not arising in the ordinary course of
business, (iii) no action, suit or proceeding at law or in equity shall be
pending or, to the best of Offeror's knowledge, threatened against the Company
or the Trust that would be required to be set forth in the Prospectus other than
as set forth therein and no proceedings shall be pending or, to the best
knowledge of the Offerors, threatened against the Company or the Trust before or
by any federal, state or other commission, board or administrative agency
wherein an unfavorable decision, ruling or finding could materially adversely
affect the business, prospects, assets, results of operations or condition
(financial or otherwise) of the Company or the Trust, other than as set forth in
the Prospectus, (iv) the Company and the Trust shall have complied with all
agreements and satisfied all conditions on their part to be performed or
satisfied at or prior to the Closing Time, and (v) the representations and
warranties of the Offerors set forth in Section 1 shall be accurate as though
expressly made at and as of the Closing Time. At the Closing Time, you shall
have received a certificate executed by the President and Chief Financial
Officer of the Company dated as of the Closing Time, to such effect and with
respect to the following additional matters: (A) the Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or preventing or suspending the use
of the Prospectus has been issued, and no
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proceedings for that purpose have been instituted or are pending or, to the best
of their knowledge, threatened under the 1933 Act; and (B) they have reviewed
the Registration Statement and the Prospectus and, when the Registration
Statement became effective and at all times subsequent thereto up to the
delivery of such certificate, the Registration Statement, and the Prospectus and
any amendments or supplements thereto contained all statements and information
required to be included therein or necessary to make the statements therein not
misleading and neither the Registration Statement, nor the Prospectus nor any
amendment or supplement thereto included any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or necessary
to make the statements therein not misleading, and, since the effective date of
the Registration Statement, there has occurred no event required to be set forth
in an amended or supplemented Prospectus that has not been so set forth.
(h) You shall have received from Ernst & Young LLP letters dated,
respectively, the date hereof (but delivered prior to the execution of this
Agreement) and the Closing Time and the Date of Delivery, in form heretofore
agreed, with such variation, as may be reasonably acceptable to you.
(i) At the Closing Time, counsel for the Underwriters shall have been
furnished with all such documents, certificates and opinions as they may request
for the purpose of enabling them to pass upon the issuance and sale of the
Preferred Securities as contemplated in this Agreement and the matters referred
to in Section 5(c) and in order to evidence the accuracy and completeness of any
of the representations, warranties or statements of the Company and the Trust,
the performance of any of the covenants of the Company and the Trust, or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Company and the Trust at or prior to the Closing Time in connection with
the authorization, issuance and sale of the Preferred Securities as contemplated
in this Agreement shall be reasonably satisfactory in form and substance to you
and to counsel for the Underwriters. The Company and the Trust will furnish you
with such number of conformed copies of such opinions, certificates, letters and
documents as you shall reasonably request.
(j) The NASD, upon review of the terms of the public offering of the
Preferred Securities, shall not have objected to such offering, such terms or
the Underwriters' participation in the same.
(k) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) if there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions the effect of which on the financial markets of
the United States is such as to make it, in your judgment, impracticable to
market the Preferred Securities or enforce contracts for the sale of the
Preferred Securities, or (ii) if trading in any securities of the Company has
been suspended by the Commission or by the Nasdaq Stock Market, or if trading
generally on the New York Stock Exchange or in the over-the-counter market has
been suspended, or limitations on prices
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for trading (other than limitations on hours or numbers of days of trading) have
been fixed, or maximum ranges for prices for securities have been required, by
the NASD or by order of the Commission or any other governmental authority, or
(iii) if there has been any downgrading in the rating of the Company's debt
securities or preferred stock by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the 1933 Act), or
(iv) if a banking moratorium has been declared by federal or New York, Kentucky
or Tennessee authorities, or (v) any federal or state statute, regulation, rule
or order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which in your reasonable opinion
materially adversely affects or will materially adversely affect the business or
operations of the Company or the Trust, or (vi) any action has been taken by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse effect on
the securities markets in the United States.
If any of the conditions specified in this Section 5 shall not have been
fulfilled when and as required by this Agreement to be fulfilled, this Agreement
may be terminated by you on notice to the Company and the Trust at any time at
or prior to the Closing Time, and such termination shall be without liability of
any party to any other party, except as provided in Section 4. Notwithstanding
any such termination, the provisions of Section 6 shall remain in effect.
The several obligations of the Underwriters to purchase Option Preferred
Securities hereunder are subject to the satisfaction on and as of any Date of
Delivery for Option Preferred Securities of the conditions set forth in this
Section 5, except that, if any Date of Delivery for Option Preferred Securities
is other than the Closing Time, the certificates, opinions and letters referred
to in paragraphs (b), (c), (d), (e) and (f) shall be revised to reflect the sale
of Option Preferred Securities.
Section 6. Indemnification and Contribution.
(a) Each of the Company and the Trust, jointly and severally, will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject
under the 1933 Act, or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) (i) arise out of or are based upon
any breach of any warranty or covenant of the Company or the Trust herein
contained, (ii) arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in (A) any Preliminary Prospectus,
the Registration Statement, or the Prospectus, or any amendment or supplement
thereto, or (B) any application or other document, or any amendment or
supplement thereto, executed by the Company or the Trust or based upon written
information furnished by or on behalf of the Company or the Trust filed in any
jurisdiction in order to qualify the Preferred Securities under the securities
or blue sky laws thereof or filed with the Commission or any securities
association or securities exchange (each an "Application"), or (iii) arise out
of or are based upon the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any Application a material fact
23
<PAGE>
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each Underwriter for any legal or other expenses
reasonably incurred by such Underwriter in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company and the Trust shall not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any Preliminary Prospectus, the Registration Statement, or the
Prospectus, or any such amendment or supplement, in reliance upon and in
conformity with written information furnished to the Company or the Trust by any
Underwriter expressly for use therein. In addition to its other obligations
under this Section 6(a), the Company and the Trust agrees that, as an interim
measure during the pendency of any such claim, action, investigation, inquiry or
other proceeding arising out of or based upon any statement or omission, or any
alleged statement or omission, described in this Section 6(a), it will reimburse
the Underwriters on a quarterly basis for all reasonable legal and other
expenses incurred in connection with investigating or defending any such claim,
action, investigation, inquiry or other proceeding, notwithstanding the absence
of a judicial determination as to the propriety and enforceability of the
Company's and the Trust's obligation to reimburse the Underwriters for such
expenses and the possibility that such payments might later be held to have been
improper by a court of competent jurisdiction. Any such interim reimbursement
payments that are not made to an Underwriter within 30 days of a request for
reimbursement shall bear interest at the prime rate (or reference rate or other
commercial lending rate for borrowers of the highest credit standing) published
from time to time by The Wall Street Journal (the "Prime Rate") from the date of
such request. This indemnity agreement shall be in addition to any liabilities
that the Company and the Trust may otherwise have. Each of the Company and the
Trust will not, without the prior written consent of each Underwriter, settle or
compromise or consent to the entry of any judgment in any pending or threatened
action or claim or related cause of action or portion of such cause of action in
respect of which indemnification may be sought hereunder (whether or not such
Underwriter is a party to such action or claim), unless such settlement,
compromise or consent includes an unconditional release of such Underwriter from
all liability arising out of such action or claim (or related cause of action or
portion thereof).
The indemnity agreement in this Section 6(a) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each person, if any,
who controls any Underwriter within the meaning of the 1933 Act to the same
extent as such agreement applies to the Underwriters.
(b) Each Underwriter, severally but not jointly, will indemnify and hold
harmless the Company and the Trust against any losses, claims, damages or
liabilities to which the Company and the Trust may become subject, under the
1933 Act, or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any breach of any
warranty or covenant by such Underwriter herein contained or any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement, any 462(b) Registration
Statement or the Prospectus,
24
<PAGE>
or any amendment or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in any
Preliminary Prospectus, the Registration Statement or the Prospectus or any such
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company or the Trust by such Underwriter expressly
for use therein; and will reimburse the Company or the Trust for any legal or
other expenses reasonably incurred by the Company or the Trust in connection
with investigating or defending any such loss, claim, damage, liability or
action. In addition to its other obligations under this Section 6(b), the
Underwriters agree that, as an interim measure during the pendency of any such
claim, action, investigation, inquiry or other proceeding arising out of or
based upon any statement or omission, or any alleged statement or omission,
described in this Section 6(b), they will reimburse the Company and the Trust on
a quarterly basis for all reasonable legal and other expenses incurred in
connection with investigating or defending any such claim, action,
investigation, inquiry or other proceeding, notwithstanding the absence of a
judicial determination as to the propriety and enforceability of their
obligation to reimburse the Company and the Trust for such expenses and the
possibility that such payments might later be held to have been improper by a
court of competent jurisdiction. Any such interim reimbursement payments that
are not made to the Company or the Trust, as the case may be, within 30 days of
a request for reimbursement shall bear interest at the Prime Rate from the date
of such request. This indemnity agreement shall be in addition to any
liabilities that the Underwriters may otherwise have. No Underwriter will,
without the prior written consent of the Company and the Trust, settle or
compromise or consent to the entry of judgment in any pending or threatened
action or claim or related cause of action or portion of such cause of action in
respect of which indemnification may be sought hereunder (whether or not the
Company or the Trust is a party to such action or claim), unless such
settlement, compromise or consent includes an unconditional release of the
Company and the Trust from all liability arising out of such action or claim (or
related cause of action or portion thereof).
The indemnity agreement in this Section 6(b) shall extend upon the same
terms and conditions to, and shall inure to the benefit of, each officer and
director of the Company and the Trust and each person, if any, who controls the
Company and the Trust within the meaning of the 1933 Act to the same extent as
such agreement applies to the Company and the Trust.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; no indemnification provided for in subsection (a) or (b)
shall be available to any party who shall fail to give notice as provided in
this subsection (c) if the party to whom notice was not given was unaware of the
proceeding to which such notice would have related and was prejudiced by the
failure to give such notice, but the omission so to notify the indemnifying
party will not relieve the
25
<PAGE>
indemnifying party from any liability that it may have to any indemnified party
otherwise than under Section 6. In case any such action shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
defense thereof other than reasonable costs of investigation, except that if the
indemnified party has been advised by counsel in writing that there are one or
more defenses available to the indemnified party which are different from or
additional to those available to the indemnifying party, then the indemnified
party shall have the right to employ separate counsel and in that event the
reasonable fees and expenses of such separate counsel for the indemnified party
shall be paid by the indemnifying party; provided, however, that if the
indemnifying party is the Company or the Trust, the Company or the Trust shall
only be obligated to pay the reasonable fees and expenses of a single law firm
(and any reasonably necessary local counsel) employed by all of the indemnified
parties. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment.
(d) It is agreed that any controversy arising out of the operation of
the interim reimbursement arrangements set forth in Section 6(a) and (b) hereof,
including the amounts of any requested reimbursement payments, the method of
determining such amounts and the basis on which such amounts shall be
apportioned among the indemnifying parties, shall be settled by arbitration
conducted pursuant to the Code of Arbitration Procedure of the National
Association of Securities Dealers, Inc. Any such arbitration must be commenced
by service of a written demand for arbitration or a written notice of intention
to arbitrate, therein electing the arbitration tribunal. In the event the party
demanding arbitration does not make such designation of an arbitration tribunal
in such demand or notice, then the party responding to said demand or notice is
authorized to do so. Any such arbitration will be limited to the operation of
the interim reimbursement provisions contained in Sections 6(a) and (b) hereof
and will not resolve the ultimate propriety or enforceability of the obligation
to indemnify for expenses that is created by the provisions of Sections 6(a) and
(b).
(e) In order to provide for just and equitable contribution in
circumstances under which the indemnity provided for in this Section 6 is for
any reason judicially determined (by the entry of a final judgment or decree by
a court of competent jurisdiction and the expiration of time to appeal or the
denial of the right of appeal) to be unenforceable by the indemnified parties
although applicable in accordance with its terms, the Company and the Trust, on
the one hand and the Underwriters on the other shall contribute to the aggregate
losses, liabilities,
26
<PAGE>
claims, damages and expenses of the nature contemplated by such indemnity
incurred by the Company and the Trust, and one or more of the Underwriters, as
incurred, in such proportions that (a) the Underwriters are responsible pro rata
for that portion represented by the percentage that the underwriting discount
appearing on the cover page of the Prospectus bears to the public offering price
(before deducting expenses) appearing thereon, and (b) the Company and the Trust
are responsible for the balance, provided, however, that no person guilty of
fraudulent misrepresentations (within the meaning of Section 11(f) of the 1933
Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation; provided, further, that if the allocation
provided above is not permitted by applicable law, the Company and the Trust, on
the one hand, and the Underwriters on the other shall contribute to the
aggregate losses in such proportion as is appropriate to reflect not only the
relative benefits referred to above but also the relative fault of the Company
and the Trust, on the one hand and the Underwriters on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. Relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission to state a
material fact relates to information supplied by the Company or the Trust, on
the one hand or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company, the Trust and the Underwriters agree
that it would not be just and equitable if contributions pursuant to this
Section 6(e) were determined by pro rata allocation (even if the Underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to above in this Section 6(e). The amount paid or payable by a party as a result
of the losses, claims, damages or liabilities referred to above shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating or defending such action or claim.
Notwithstanding the provisions of this Section 6(e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Preferred Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. The Underwriters'
obligations in this Section 6(e) to contribute are several in proportion to
their respective underwriting obligations and not joint. For purposes of this
Section 6(e), each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as such Underwriter, and each director of the Company, each officer of the
Company or each trustee of the Trust who signed the Registration Statement, and
each person, if any, who controls the Company or the Trust, within the meaning
of Section 15 of the 1933 Act shall have the same rights to contribution as the
Company and the Trust.
Section 7. Representations, Warranties and Agreements to Survive Delivery.
The representations, warranties, indemnities, agreements and other statements of
the Offerors or its officers set forth in or made pursuant to this Agreement
will remain operative and in full force and
27
<PAGE>
effect regardless of any investigation made by or on behalf of the Offerors, or
any Underwriter or controlling person, and with respect to an Underwriter or the
Offerors will survive delivery of and payment for the Preferred Securities or
termination of this Agreement.
Section 8. Effective Date of Agreement and Termination.
(a) This Agreement shall become effective immediately as to Sections 4 and
6 and, as to all other provisions, at 10:00 a.m. E.D.T. on the first full
business day following the date of execution of this Agreement; but this
Agreement shall nevertheless become effective at such earlier time as you may
determine on and by notice to the Company or by release of any of the Preferred
Securities for sale to the public. For the purposes of this Section 8, the
Preferred Securities shall be deemed to have been so released upon the release
of publication of any newspaper advertisement relating to the Preferred
Securities or upon the release by you of telegrams (i) advising the Underwriters
that the Preferred Securities are released for public offering, or (ii) offering
the Preferred Securities for sale to securities dealers, whichever may occur
first. By giving notice before the time this Agreement becomes effective, you,
or the Company, may prevent this Agreement from becoming effective, without
liability of any party to any other party, except that the Company shall remain
obligated to pay costs and expenses to the extent provided in Section 4 hereof.
(b) You may terminate this Agreement, by notice to the Company and the
Trust, at any time at or prior to the Closing Time (i) in accordance with the
last paragraph of Section 5 of this Agreement, or (ii) if there has been since
the respective dates as of which information is given in the Registration
Statement, any material adverse change, or any development involving a
prospective material adverse change, in or affecting the business, prospects,
management, properties, assets, results of operations or condition (financial or
otherwise) of the Company, whether or not arising in the ordinary course of
business, or (iii) if there has occurred or accelerated any outbreak of
hostilities or other national or international calamity or crisis or change in
economic or political conditions the effect of which on the financial markets of
the United States is such as to make it, in your judgment, impracticable to
market the Shares or enforce contracts for the sale of the Preferred Securities,
or (iv) if trading in any securities of the Company has been suspended by the
Commission or by the Nasdaq Stock Market or if trading generally on the New York
Stock Exchange or in the over-the-counter market has been suspended, or
limitations on prices for trading (other than limitations on hours or numbers of
days of trading) have been fixed, or maximum ranges for prices for securities
have been required, by the NASD or by order of the Commission or any other
governmental authority, or (v) if there has been any downgrading in the rating
of the Company's debt securities or preferred stock by any "nationally
recognized statistical rating organization" (as defined for purposes of Rule
436(g) under the 1933 Act), or (vi) if a banking moratorium has been declared by
federal or New York, Kentucky or Tennessee authorities, or (vii) any federal or
state statute, regulation, rule or order of any court or other governmental
authority has been enacted, published, decreed or otherwise promulgated which in
your reasonable opinion materially adversely affects or will materially
adversely affect the business
28
<PAGE>
or operations of the Company, or (viii) any action has been taken by any
federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse effect on
the securities markets in the United States.
(c) If this Agreement is terminated pursuant to this Section 8, such
termination shall be without liability of any party to any other party, except
to the extent provided in Section 4. Notwithstanding any such termination, the
provisions of Section 6 shall remain in effect.
Section 9. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at the Closing Time to purchase the Preferred
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), you shall have the right, within 36 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms set forth in this Agreement; if, however, you have not completed such
arrangements within such 36-hour period, then:
(a) If the aggregate number of Firm Preferred Securities which are
Defaulted Securities does not exceed 10% of the aggregate number of Firm
Preferred Securities to be purchased pursuant to this Agreement, the non-
defaulting Underwriters shall be obligated to purchase the full amount thereof
in the proportions that their respective underwriting obligation proportions
bear to the underwriting obligations of all non-defaulting Underwriters, and
(b) If the aggregate number of Firm Preferred Securities which are
Defaulted Securities exceeds 10% of the aggregate number of Firm Preferred
Securities to be purchased pursuant to this Agreement, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default that does not result in a termination of
this Agreement, either you or the Company shall have the right to postpone the
Closing Time for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectus or in any other
documents or arrangements, and the Company agrees promptly to file any
amendments to the Registration Statement or supplements to the Prospectus that
may thereby be made necessary. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 9.
Section 10. Default by the Company. If the Company or the Trust shall fail
at the Closing Time to sell and deliver the aggregate number of Firm Preferred
Securities that it is obligated to sell, then this Agreement shall terminate
without any liability on the part of any non-defaulting party,
29
<PAGE>
except to the extent provided in Section 4 and except that the provisions of
Section 6 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company or the
Trust from liability, if any, in respect to such default.
Section 11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered, mailed or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o Morgan Keegan & Company, Inc.,
50 Front Street, Memphis, Tennessee 38103, Attention: Randy Coley (with a copy
sent in the same manner to King & Spalding, 120 West 45th Street, New York, New
York 10036, Attention: Stephen M. Wiseman); and notices to the Company shall be
directed to it at 208 North Mayo Trail, Pikeville, Kentucky 41501 Attention:
Richard M. Levy, Chief Financial Officer (with a copy sent in the same manner to
Greenebaum Doll & McDonald PLLC, 1400 Vine Center Tower, Lexington, Kentucky
40593 Attention: Nicholas R. Glancy).
Section 12. Parties. This Agreement is made solely for the benefit of
and is binding upon the Underwriters, the Company and the Trust to the extent
provided in Section 6, any person controlling the Company, the Trust or any of
the Underwriters, the officers, directors and trustees of the Company, and their
respective executors, administrators, successors and assigns and subject to the
provisions of Section 6, no other person shall acquire or have any right under
or by virtue of this Agreement. The term "successors and assigns" shall not
include any purchaser, as such purchaser, from any of the several Underwriters
of the Preferred Securities.
All of the obligations of the Underwriters hereunder are several and not
joint.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
THE LAWS OF THE STATE OF TENNESSEE. SPECIFIED TIME OF THE DAY REFERS TO UNITED
STATES EASTERN TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
Section 14. Counterparts. This Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement.
30
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, and upon the acceptance
hereof by the Underwriters, this instrument will become a binding agreement
among the Company and the several Underwriters in accordance with its terms.
Very truly yours,
COMMUNITY TRUST BANCORP, INC.
By:________________________________
Name:
Title:
CTBI PREFERRED CAPITAL TRUST
By: COMMUNITY TRUST BANCORP, INC., on
behalf of CTBI Preferred Capital Trust
By:___________________________
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first written above:
MORGAN KEEGAN & COMPANY, INC.
By:_______________________________
Name:
Title:
J.J.B. HILLIARD, W.L. LYONS, INC.
By:_______________________________
Name:
Title:
31
<PAGE>
SCHEDULE A
<TABLE>
<CAPTION>
Number of Firm
Preferred Securities
to be Purchased
--------------------
Underwriter
- -----------
<S> <C>
Morgan Keegan & Company, Inc.
J.J.B. Hilliard, W.L. Lyons, Inc.
TOTAL
</TABLE>
<PAGE>
Schedule B
Community Trust Bank, N.A.
Community Trust Bank, FSB
Trust Company of Kentucky
Commercial Bank, West Liberty, Kentucky
<PAGE>
Exhibit 4.1
CERTIFICATE OF TRUST OF
CTBI PREFERRED CAPITAL TRUST
This Certificate of Trust of the CTBI PREFERRED STOCK TRUST (the "Trust"),
dated March 18, 1997, is being duly executed and filed by WILMINGTON TRUST
COMPANY, a Delaware banking corporation, as trustee, to form a business trust
under the Delaware Business Trust Act (12 Del. C.(S) 3801 et seq.)
1. NAME. The name of the business trust formed hereby is CTBI
Preferred Capital Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware,
19890-0001, Attn: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY
as Trustee
By \s\ W. Chris Sponenberg
----------------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
<PAGE>
Exhibit 4.2
TRUST AGREEMENT, dated as of March 18, 1997, by and between Community Trust
Bancorp, Inc., a Kentucky corporation, as "Depositor", and Wilmington Trust
Company, a Delaware banking corporation, as "Trustee".
The Depositor and the Trustee hereby agree as follows:
Section 1. The Trust. The trust created hereby shall be known as CTBI
Preferred Capital Trust (the "Trust"), in which name the Trustee, or the
Depositor to the extent provided herein, may conduct the business of the Trust,
make and execute contracts, and sue and be sued.
Section 2. The Trust Estate. The Depositor hereby assigns, transfers,
conveys and sets over to the Trustee the sum of $10. The Trustee hereby
acknowledges receipt of such amount in trust from the Depositor, which amount
shall constitute the initial trust estate. The Trustee hereby declares that it
will hold the trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a business trust
under Chapter 39 of Title 12 of the Delaware Code, 12 Del C (S) 3801 et seq (the
"Business Trust Act"), and that this document constitute the governing
instrument of the Trust. The Trustee is hereby authorized and directed to
execute and file a certificate of trust with the Delaware Secretary of State in
accordance with the provisions of the Business Trust Act.
Section 3. Amended and Restated Trust Agreement. The Depositor, the
Trustee and certain other parties will enter into an amended and restated Trust
Agreement, satisfactory to each such party and substantially in the form to be
included as an exhibit to the 1933 Act Registration Statement (as defined
below), to provide for the contemplated operation of the Trust created hereby
and the issuance of the Capital Securities (as defined below) and common
securities of the Trust to be referred to therein. Prior to the execution and
delivery of such amended and restated Trust Agreement, the Trustee 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 of licenses, consents or approvals required
by applicable law or otherwise.
Section 4. Certain Authorizations. The Depositor and the Trustee hereby
authorize and direct the Depositor, as the sponsor of the Trust, (i) to file
with the Securities and Exchange Commission (the "Commission") and execute, in
each case on behalf of the Trust (a) the Registration Statement on Form S-3 (the
"1933 Act Registration Statement"), including any pre-effective or post-
effective amendments to such 1933 Act Registration Statement (including the
prospectus and the exhibits contained therein), relating to the registration
under the Securities Act of 1933, as amended, of the preferred securities of the
Trust (the "Capital Securities") and certain other securities of the Depositor
and (b) a Registration Statement on Form 8-A (the "1934 Act Registration
Statement")(including all pre-effective and post-effective amendments thereto)
relating to the registration of the Capital Securities of the Trust under
Section 12 of the Securities Exchange Act of 1934, as amended; (ii) to file with
the National Association of Securities Dealers ("NASD") and execute on behalf of
the Trust a listing application or applications and all other applications,
statements, certificates,
<PAGE>
agreements and other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on the NASD's Nasdaq National Market ("NASDAQ");
(iii) to file and execute 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 the Depositor on behalf of the Trust,
may deem necessary or desirable to register the Capital Securities under the
securities or "Blue Sky" laws; and (iv) to execute on behalf of the Trust such
Underwriting Agreements with one or more underwriters relating to the offering
of the Capital Securities as the Depositor, on behalf of the Trust, may deem
necessary or desirable. In the event that any filing referred to in clauses (i),
(ii) or (iii) above is required by the rules and regulations of the Commission,
the NASD or state securities or "Blue Sky" laws, to be executed on behalf of the
Trust by the Trustee, the Depositor and any Trustee appointed pursuant to
Section 6 hereof are hereby authorized to join in any such filing and to execute
on behalf of the Trust any and all of the foregoing.
Section 5. Counterparts. This Trust Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
Section 6. Trustees. The number of Trustees initially shall be one (1)
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 Depositor, which may
increase or decrease the number of Trustees; provided, 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 which has its principal place of business in the State of Delaware and
otherwise meets the requirements of applicable Delaware law. Subject to the
foregoing, the Depositor is entitled to appoint or remove without cause any
Trustee at any time. The Trustee may resign upon thirty days' prior notice to
the Depositor.
Section 7. Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware (without regard
to conflicts of law principals).
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed as of the day and year first above written.
COMMUNITY TRUST BANCORP, INC.
as Depositor
By: /s/ Richard M. Levy
----------------------------
Name: Richard M. Levy
Title: Executive Vice President
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ W. Chris Sponenberg
-----------------------------
Name: W. Chris Sponenberg
Title: Senior Financial Services Officer
<PAGE>
Exhibit 4.3
State Street Bank and Trust Company, not in its
individual capacity but solely as Trustee
By __________________________________
Name: _______________________________
Title: ______________________________
Richard M. Levy
not in his individual capacity but solely as Trustee
Jean R. Hale
not in her individual capacity but solely as Trustee
CTBI PREFERRED CAPITAL TRUST
AMENDED AND RESTATED
TRUST AGREEMENT
among
COMMUNITY TRUST BANCORP, INC., as Depositor
STATE STREET BANK AND TRUST COMPANY, as Property Trustee
WILMINGTON TRUST COMPANY, as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of _________ ___, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
1. Defined terms...................................................................... 2
1.1 Definitions................................................................... 2
2. Establishment Of The Trust......................................................... 11
2.1 Name.......................................................................... 11
2.2 Office of the Delaware Trust; Principal Place of Business..................... 11
2.3 Initial Contribution of Trust Property; Organizational Expenses............... 11
2.4 Issuance of the Preferred Securities.......................................... 11
2.5 Issuance of the Common Securities; Subscription and Purchase of Debentures.... 12
2.6 Declaration of Trust.......................................................... 12
2.7 Authorization to Enter into Certain Transactions.............................. 12
2.8 Assets of Trust............................................................... 16
2.9 Title to Trust Property....................................................... 16
3. Payment Account.................................................................... 16
3.1 Payment Account............................................................... 16
4. Distributions, Redemption.......................................................... 16
4.1 Distributions................................................................. 16
4.2 Redemption.................................................................... 17
4.3 Subordination of Common Securities............................................ 19
4.4 Payment Procedures............................................................ 20
4.5 Tax Returns and Reports....................................................... 20
4.6 Payment of Taxes, Duties, Etc. Of The Trust................................... 20
4.7 Payments Under Indenture...................................................... 20
5. Trust Securities Certificates...................................................... 20
5.1 Initial Ownership............................................................. 21
5.2 The Trust Securities Certificates............................................. 21
5.3 Execution And Delivery Of Trust Securities Certificates....................... 21
5.4 Registration Of Transfer And Exchange Of Preferred Securities Certificates.... 21
5.5 Mutilated, Destroyed, Lost Or Stolen Trust Securities Certificates............ 22
5.6 Persons Deemed Securityholders................................................ 23
5.7 Access To List Of Securityholders' Name And Addresses......................... 23
5.8 Maintenance Of Office Or Agency............................................... 23
5.9 Appointment Of Paying Agent................................................... 23
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
5.10 Ownership Of Common Securities By Depositor..................................... 24
5.11 Book-Entry Preferred Securities Certificates; Common Securities
Certificate.................................................................. 24
5.12 Notices To Clearing Agency...................................................... 25
5.13 Definitive Preferred Securities Certificates.................................... 25
5.14 Rights Of Securityholders....................................................... 26
6. Acts Of Securityholders; Meetings; Voting............................................. 27
6.1 Limitations on Voting Rights..................................................... 27
6.2 Notice of Meetings............................................................... 28
6.3 Meetings of Preferred Securityholders............................................ 28
6.4 Voting Rights.................................................................... 28
6.5 Proxies, Etc..................................................................... 28
6.6 Securityholder Action by Written Consent......................................... 29
6.7 Record Date for Voting and Other Purposes........................................ 29
6.8 Acts of Securityholders.......................................................... 29
6.9 Inspection of Records............................................................ 30
7. Representations And Warranties........................................................ 30
7.1 Representations and Warranties of the Bank....................................... 30
7.2 Representations and Warranties of the Delaware Bank.............................. 31
7.3 Representations and Warranties of Depositor...................................... 32
8. The Trustees.......................................................................... 33
8.1 Certain Duties and Responsibilities............................................... 33
8.2 Certain Notices................................................................... 34
8.3 Certain Rights of Property Trustee................................................ 35
8.4 Not Responsible for Recitals or Issuance of Securities............................ 37
8.5 May Hold Securities............................................................... 37
8.6 Compensation; Indemnity; Fees..................................................... 37
8.7 Corporate Property Trustee Required; Eligibility of Trustees...................... 37
8.8 Conflicting Interests............................................................. 38
8.9 Co-Trustees and Separate Trustee.................................................. 38
8.10 Resignation and Removal; Appointment of Successor................................ 40
8.11 Acceptance of Appointment by Successor........................................... 41
8.12 Merger, Conversion, Consolidation or Succession to Business...................... 42
8.13 Preferential Collection of Claims Against Depositor or Trust..................... 42
8.14 Reports by Property Trustee...................................................... 42
8.15 Reports to the Property Trustee.................................................. 43
8.16 Evidence of Compliance with Conditions Precedent................................. 43
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
<S> <C>
8.17 Number of Trustees.................................................. 43
8.18 Delegation of Power................................................. 43
8.19 Voting.............................................................. 44
9. Termination, Liquidation And Merger...................................... 44
9.1 Termination upon Expiration Date..................................... 44
9.2 Early Termination.................................................... 44
9.3 Termination.......................................................... 44
9.4 Liquidation.......................................................... 44
9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust.. 46
10. Miscellaneous Provisions................................................. 47
10.1 Limitation of Rights of Securityholders............................ 47
10.2 Amendment.......................................................... 47
10.3 Separability....................................................... 48
10.4 Governing Law...................................................... 48
10.5 Payments Due on Non-Business Day................................... 49
10.6 Successors......................................................... 49
10.7 Headings........................................................... 49
10.8 Reports, Notices and Demands....................................... 49
10.9 Agreement not to Petition.......................................... 50
10.10 Trust Indenture Act; Conflict with Trust Indenture Act............ 50
10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture... 50
</TABLE>
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<PAGE>
EXHIBITS
<TABLE>
<CAPTION>
Description Exhibit
<S> <C>
Certificate of Trust........................................................ A
Certificate Depository Agreement............................................ B
Certificate Evidencing Common Securities.................................... C
Form of Agreement as to Expenses and Liabilities............................ D
Certificate Evidencing Preferred Securities................................. E
</TABLE>
AMENDED AND RESTATED TRUST AGREEMENT
CROSS-REFERENCE TABLE
<TABLE>
<CAPTION>
Section of Section of
Trust Indenture Act Indenture
of 1939, As Amended
<S> <C>
310(a)(1)................................................................. 8.7
310(a)(2)................................................................. 8.7
310(a)(3)................................................................. 8.7
310(a)(4)............................................................. 2.7(a)(1)
310(b).................................................................... 8.8
311(a).................................................................... 8.13
311(b).................................................................... 8.13
312(a).................................................................... 5.7
312(b).................................................................... 5.7
312(c).................................................................... 5.7
313(a)................................................................. 8.14(a)
313(a)(4).............................................................. 8.14(b)
313(b)................................................................. 8.14(b)
313(c)................................................................. 8.14(b)
313(d)................................................................. 8.14(c)
314(a).................................................................... 8.15
314(b).......................................................... Not Applicable
314(c)(1)................................................................. 8.16
314(c)(2)................................................................. 8.16
314(c)(3)....................................................... Not Applicable
314(d).......................................................... Not Applicable
314(e)................................................................ 1.1, 8.16
315(a).......................................................... 8.1(a), 8.3(a)
315(b).................................................................... 8.2
315(c)................................................................. 8.1(a)
315(d)................................................................ 8.1, 8.3
315(e).......................................................... Not Applicable
316(a).......................................................... Not Applicable
316(a)(1)(A).................................................... Not Applicable
316(a)(1)(B).................................................... Not Applicable
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
316(a)(2)................................ Not Applicable
316(b)................................... Not Applicable
316(c).............................................. 6.7
317(a)(1)................................ Not Applicable
317(a)(2)................................ Not Applicable
317(b).............................................. 5.9
318(a)............................................. 10.10
</TABLE>
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
THIS AMENDED AND RESTATED TRUST AGREEMENT is entered into and effective as of
April ____, 1997, by and between (i) COMMUNITY TRUST BANCORP, INC., a Kentucky
corporation (including any successors or assigns, the "Depositor"), (ii) STATE
STREET BANK AND TRUST COMPANY, a Massachusetts corporation duly organized and
existing under the laws of the State of Massachusetts, as property trustee (the
"Property Trustee" and, in its separate corporate capacity and not in its
capacity as Property Trustee, the "Bank"), (iii) WILMINGTON TRUST COMPANY, a
Delaware banking corporation, duly organized and existing under the laws of the
State of Delaware, as Delaware Trustee (the "Delaware Trustee" and, in its
separate corporate capacity and not in its capacity as Delaware Trustee, the
"Delaware Bank"), (iv) JEAN R. HALE, an individual, and RICHARD M. LEVY, an
individual, each of whose address is c/o Community Trust Bancorp, Inc., 208
North Mayo Trail, Pikeville, Kentucky 41501 (each an "Administrative Trustee"
and collectively the "Administrative Trustees") (the Property Trustee, the
Delaware Trustee and Administrative Trustees referred to collectively as the
"Trustees") and (v) the several Holders, as hereinafter defined.
RECITALS:
A. Whereas, the Depositor and the Delaware Trustee have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into of that certain Trust Agreement, dated as of
March 18, 1997 (the "Original Trust Agreement"), and by the execution and filing
by the Delaware Trustee with the Secretary of State of the State of Delaware of
the Certificate of Trust, filed on March 18, 1997 the form of which is attached
as Exhibit A; and
B. Whereas, the Depositor, the Delaware Trustee, the Property Trustee and the
Administrative Trustees desire to amend and restate the Original Trust Agreement
in its entirety as set forth herein to provide for, among other things, (i) the
issuance of the Common Securities by the Trust to the Depositor, (ii) the
issuance and sale of the Preferred Securities by the Trust pursuant to the
Underwriting Agreement, (iii) the acquisition by the Trust from the Depositor of
all of the right, title and interest in the Debentures and (iv) the appointment
of the Property Trustee;
Agreement:
NOW, THEREFORE, in consideration of the agreements and obligations set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each party, for the benefit of the
Securityholders, hereby amends and restates the Original Trust Agreement in its
entirety and agrees as follows:
<PAGE>
1. DEFINED TERMS.
1.1 Definitions.
(a) For all purposes of this Trust Agreement, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Section have the meanings assigned
to them in this Section and include the plural as well as the singular;
(2) all other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) unless the context otherwise requires, any reference to a
"Section" refers to a Section, as the case may be, of this Trust Agreement;
and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Trust Agreement as a whole and not to any
particular Section or other subdivision.
(b) "Act" has the meaning specified in Section 6.8.
(c) "Additional Amount" means, with respect to Trust Securities of a
given Liquidation Amount and/or a given period, the amount of additional
interest accrued on interest in arrears and paid by the Depositor on a Like
Amount of Debentures for such period.
(d) "Additional Sums" has the meaning specified in Section 2.5(c) of
the Indenture.
(e) "Administrative Trustee" means each of Richard M. Levy and Jean R.
Hale solely in their capacity as an Administrative Trustee of the Trust formed
and continued hereunder and not in their individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
(f) "Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(g) "Bank" has the meaning specified in the preamble to this Trust
Agreement.
(h) "Bankruptcy Event" means, with respect to any Person:
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(1) the entry of a decree or order by a court having jurisdiction
in the premises adjudging such Person as bankrupt or insolvent, or
approving as properly filed a petition seeking liquidation or
reorganization of or in respect of such Person under the Federal Bankruptcy
Code or any other similar applicable Federal or State law, and the
continuance of any such decree or order unvacated and unstayed for a period
of 90 days; or the commencement of an involuntary case under the Federal
Bankruptcy Code in respect of such Person, which shall continue undismissed
for a period of 90 days or entry of an order for relief in such case; or
the entry of a decree or order of a court having jurisdiction in the
premises for the appointment on the ground of insolvency or bankruptcy of a
receiver, custodian, liquidator, trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have remained in
force unvacated and unstayed for a period of 90 days; or
(2) the institution by such Person of proceedings to be
adjudicated a voluntary bankrupt, or the consent by such Person to the
filing of a bankruptcy proceeding against it, or the filing by such Person
of a petition or answer or consent seeking liquidation or reorganization
under the Federal Bankruptcy Code or other similar applicable Federal or
State law, or the consent by such Person to the filing of any such petition
or to the appointment on the ground of insolvency or bankruptcy of a
receiver or custodian or liquidator or trustee or assignee in bankruptcy or
insolvency of such Person or of its property, or shall make a general
assignment for the benefit of creditors.
(i) "Bankruptcy Laws" has the meaning specified in Section 10.9.
(j) "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full force and effect on
the date of such certification, and delivered to the appropriate Trustee.
(k) "Book Entry Preferred Securities Certificates" means certificates
representing Preferred Securities issued in global, fully registered form to the
Clearing Agency as described in Section 5.11.
(l) "Business Day" means a day other than (a) a Saturday or Sunday,
(b) a day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed, or (c) a day on which
the Property Trustee's Corporate Trust Office or the Corporate Trust Office of
the Debenture Trustee is closed for business.
(m) "Capital Event" means that CTBI Trust has received an opinion of
independent counsel experienced in such matters that the Company cannot, or
within 90 days of such opinion, will not be permitted by the applicable
regulatory authorities, due to a change in law, regulation,
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<PAGE>
policy or guideline, to account for the Preferred Securities as Tier I Capital
under the capital guidelines or policies of the Federal Reserve.
(n) "Certificate Depository Agreement" Trust, means the agreement
among the Depositor and The Depositary Trust Company, as the initial
Clearing Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
(o) "Certificate of Trust" means the certificate of trust filed with
the Secretary of State of the State of Delaware with respect to the Trust, as
amended or restated from time to time.
(p) "Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
(q) "Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
(r) "Closing Date" means the date of execution and delivery of this
Trust Agreement.
(s) "Code" means the Internal Revenue Code of 1986, as amended.
(t) "Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
(u) "Common Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
(v) "Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
(w) "Corporate Trust Office" means the principal corporate trust
office of the Property Trustee located at Two International Place, 4th Floor,
Boston, Massachusetts 02110.
(x) "Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
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<PAGE>
(y) "Debenture Redemption Date" means, with respect to any Debentures
to be redeemed under the Indenture, the date fixed for redemption under the
Indenture.
(z) "Debenture Tax Event" means a "Tax Event" as defined in the
Indenture.
(aa) "Debenture Trustee" means State Street Bank and Trust Company, a
Massachusetts banking corporation organized under the laws of the State of
Massachusetts and any successor thereto, as trustee under the Indenture.
(bb) "Debentures" means the $_____________ aggregate principal amount
of the Depositor's _______% Subordinated Debentures, issued pursuant to the
Indenture.
(cc) "Definitive Preferred Securities Certificates" means either or
both (as the context requires) of (a) Preferred Securities Certificates issued
as Book-Entry Preferred Securities Certificates as provided in Section
5.11(a) and 5.11(b) and (b) Preferred Securities Certificates issued in
certificated, fully registered form as provided in Section 5.13.
(dd) "Delaware Bank" has the meaning specified in the preamble to this
Trust Agreement.
(ee) "Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Delaware Code Sections 3801 et seq, as it may be amended from
time to time.
(ff) "Delaware Trustee" means the commercial bank or trust company
identified as the "Delaware Trustee" in the preamble to this Trust Agreement
solely in its capacity as Delaware Trustee of the Trust performed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor trustee appointed as herein provided.
(gg) "Depositor" has the meaning specified in the preamble to this
Trust Agreement.
(hh) "Distribution Date" has the meaning specified in Section 4.1(a).
(ii) "Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.1.
(jj) "Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) the occurrence of a Debenture Event of Default; or
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<PAGE>
(2) default by the Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a period of 30
days; or
(3) default by the Trust in the payment of any Redemption Price
of any Trust Security when it becomes due and payable; or
(4) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Trust Agreement
(other than a covenant or warranty a default in the performance of which or the
breach of which is dealt with in clause (b) or (c), above) and continuation of
such default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the defaulting Trustee or Trustees by the
Holders of at least 25% in aggregate liquidation preference of the Outstanding
Preferred Securities a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(5) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a successor
Property Trustee within 60 days thereof.
(kk) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(ll) "Expense Agreement" means the Agreement as to Expenses and
Liabilities between the Depositor and the Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
(mm) "Expiration Date" has the meaning specified in Section 9.1.
(nn) "Extended Interest Payment Period" has the meaning specified in
Section 4.1 of the Indenture.
(oo) "Guarantee" means the Guarantee Agreement executed and delivered
by the Depositor and State Street Bank and Trust Company as trustee,
contemporaneously with the execution and delivery of this Trust Agreement, for
the benefit of the holders of the Preferred Securities, as amended from time to
time.
(pp) "Indenture" means the Indenture, dated as of ___________ ____,
1997, between the Depositor and the Debenture Trustee, as trustee, as amended or
supplemented from time to time.
(qq) "Investment Company Event" means the receipt by the Trust of an
Opinion of Counsel, rendered by a law firm experienced in such matters, to the
effect that, as a result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), the Trust is or will be considered an "investment company" that is
required
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<PAGE>
to be registered under the 1940 Act, which Change in 1940 Act Law becomes
effective on or after the date of original issuance of the Preferred Securities
under this Trust Agreement.
(rr) "Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trusty, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
(ss) "Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture and the proceeds of which will be used to pay the Redemption Price of
such Trust Securities and (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a termination or liquidation of
the Trust, Debentures having a principal amount equal to the Liquidation Amount
of the Trust Securities of the Holder to whom such Debentures are distributed.
(tt) "Liquidation Amount" means the stated amount of $25 per Trust
Security.
(uu) "Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination and
liquidation of the Trust pursuant to Section 904(a).
(vv) "Liquidation Distribution" has the meaning specified in Section
9.4(d).
(ww) "1940 Act" means the Investment Company Act of 1940, as amended.
(xx) "Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary, of the Depositor, and delivered to the appropriate Trustee. One of
the officers signing an Officers' Certificate given pursuant to Section 816
shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided in this Trust Agreement shall include:
(1) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(3) 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
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<PAGE>
(4) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
(yy) "Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Trust, the Property Trustee, the Delaware Trustee or the
Depositor, but not an employee of any thereof, and who shall be reasonably
acceptable to the Property Trustee.
(zz) "Original Trust Agreement" has the meaning specified in the
recitals to this Trust Agreement.
(aaa) "Outstanding", when used with respect to Preferred Securities,
means, as of the date of determination, all Preferred Securities theretofore
executed and delivered under this Trust Agreement, except:
(1) Preferred securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(2) Preferred Securities for whose payment or redemption money in
the necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Preferred Securities; provided that, if
such Preferred Securities are to be redeemed, notice of such redemption has been
duly given pursuant to this Trust Agreement; and
(3) Preferred Securities which have been paid or in exchange for
or in lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13; provided, however, that in
determining whether the Holders of the requisite Liquidation Amount of the
Outstanding Preferred Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, Preferred Securities owned by
the Depositor, any Trustee or any Affiliate of the Depositor or any Trustee
shall be disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or wavier, only
Preferred Securities that such Trustee knows to be so owned shall be so
disregarded and (b) the foregoing shall not apply at any time when all of the
outstanding Preferred Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Preferred Securities so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Administrative Trustees the pledgee's
right so to the Depositor or any Affiliate of the Depositor.
(bbb) "Owner" means each Person who is the beneficial owner of a Book
Entry Preferred Securities Certificate as reflected in the records of the
Clearing Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an
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account with such Clearing Agency (directly or indirectly, in accordance with
the rules of such clearing Agency).
(ccc) "Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.9 and shall initially be the Bank.
(ddd) "Payment Account" means a segregated non-interest-bearing
corporate trust account maintained by the Property Trustee with the Bank in its
trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Debentures will be held and from which the Property
Trustee shall make payments to the Securityholders in accordance with Sections
4.1 and 4.2.
(eee) "Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
(fff) "Preferred Security" means an undivided beneficial interest in
the assets of the Trust, having a Liquidation Amount of $25 and having the
rights provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
(ggg) "Preferred Securities Certificate", means a certificate
evidencing ownership of Preferred Securities, substantially in the form attached
as Exhibit E.
(hhh) "Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee", in the preamble to this Trust Agreement
solely in its capacity as Property Trustee of the Trust heretofore formed and
continued hereunder and not in its individual capacity, or its successor in
interest in such capacity, or any successor property trustee appointed as herein
provided.
(iii) "Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated maturity
of the Debentures shall be a Redemption Date for a Like Amount of Trust
Securities.
(jjj) "Redemption Price" means with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures, allocated on a pro rata basis (based on Liquidation Amounts) among
the Trust Securities.
(kkk) "Relevant Trustee" shall have the meaning specified in Section
8.10.
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(lll) "Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.4.
(mmm) "Securityholder" or "Holder" means a Person in whose name a
Trust Security or Securities is registered in the Securities Register; any such
Person is a beneficial owner within the meaning of the Delaware Business Trust
Act.
(nnn) "Tax Event" means the receipt by the Trust of an Opinion of
Counsel, rendered by a law firm experienced in such matters, to the effect that,
as a result of any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after the
date of such Opinion of Counsel, will not be, deductible by the Depositor, in
whole or in part, for United States federal income tax purposes or (iii) the
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.
(ooo) "Trust" means the Delaware business trust created and continued
hereby and identified on the cover page to this Trust Agreement.
(ppp) "Trust Agreement" means this Amended and Restated Trust
Agreement, as the same may be modified, amended or supplemented in accordance
with the applicable provisions hereof, including all exhibits hereto, including,
for all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
(qqq) "Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
(rrr) "Trust Property" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing to,
the Payment Account and (d) all proceeds and rights in respect of the foregoing
and any other property and assets for the time being held or deemed to be held
by the Property Trustee pursuant to the trusts of this Trust Agreement.
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(sss) "Trust Security" means any one of the Common Securities or the
Preferred Securities.
(ttt) "Trust Securities Certificate" means any one of the Common
Securities Certificates or the Preferred Securities Certificates.
(uuu) "Trustee" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
(vvv) "Underwriting Agreement" means the Underwriting Agreement, dated
as of _________ ____, 1997, among the Trust, the Depositor and the Underwriter
named therein.
2. Establishment Of The Trust.
2.1 Name. The trust created and continued hereby shall be known as "CTBI
Preferred Capital Trust," as such name may be modified from time to time by the
Administrative Trustees following written notice to the Holders of Trust
Securities and the other Trustees, in which name the Trustees may engage in the
transactions contemplated hereby, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
2.2 Office of the Delaware Trust; Principal Place of Business. The address
of the Delaware Trustee in the State of Delaware is c/o Wilmington Trust
Company, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Corporate Trust Administration, or such other address in the State of Delaware
as the Delaware Trustee may designate by written notice to the Securityholders
and the Depositor. The principal executive office of the Trust is c/o Community
Trust Bancorp, Inc., 208 North Mayo Trail, Pikeville, Kentucky 41501.
2.3 Initial Contribution of Trust Property; Organizational Expenses. The
trustees acknowledge receipt in trust from the Depositor in connection with the
Original Trust Agreement of the sum of $10, which constituted the initial Trust
Property. The Depositor shall pay organizational expenses of the Trust as they
arise or shall, upon request of any Trustee, promptly reimburse such Trustee for
any such expenses paid by such Trustee. The Depositor shall make no claim upon
the Trust Property for the payment of such expenses.
2.4 Issuance of the Preferred Securities. On _________ ____, 1997, the
Depositor, on behalf of the Trust and pursuant to the Original Trust Agreement,
executed and delivered the Underwriting Agreement. Contemporaneously with the
execution and delivery of this Trust Agreement, an Administrative Trustee, on
behalf of the Trust, shall execute in accordance with Section 5.2 and deliver in
accordance with the Underwriting Agreement Preferred Securities Certificates,
registered in the name of the nominee of the initial Clearing Agency, in an
aggregate amount of ___________. Preferred Securities having an aggregate
Liquidation Amount of $_________, against receipt of the aggregate purchase
price of such Preferred Securities of
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$_____________, which amount such Administrative Trustee shall promptly deliver
to the Property Trustee.
2.5 Issuance of the Common Securities; Subscription and Purchase of
Debentures.
(a) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute and
deliver Common Securities certificates, registered in the name of the Depositor,
in an aggregate amount of ________ Common Securities having an aggregate
liquidation amount of $____________, against receipt of the aggregate purchase
price of such Common Securities of $___________, which amount such
Administrative Trustee shall promptly deliver to the Property Trustee.
(b) Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall subscribe to
and purchase from the Depositor, Debentures, registered in the name of the
Property Trustee on behalf of the Trust and having an aggregate principal amount
equal to $_____________, and, in satisfaction of the purchase price for such
Debentures, an Administrative Trustee, on behalf of the Trust, shall transfer
$___________ to the Depositor.
2.6 Declaration of Trust. The exclusive purposes and functions of the Trust
are (a) to issue and sell Trust Securities and use the proceeds from such sale
to acquire the Debentures, and (b) to engage in those activities necessary,
convenient or incidental thereto. The Depositor hereby appoints the Trustees as
trustees of the Trust, to have all the rights, powers and duties to the extent
set forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property in trust upon and
subject to the conditions set forth herein for the benefit of the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of the
duties and responsibilities, of the Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
2.7 Authorization to Enter into Certain Transactions.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth in
paragraph (b) of this Section and Section 8, and in accordance with the
following provisions (i) and (ii), the Administrative Trustees shall have the
authority to enter into all transactions and agreements determined by the
Administrative Trustees to be appropriate in exercising the authority, express
or implied, otherwise granted to the Administrative Trustees under this Trust
Agreement, and to perform all acts in furtherance thereof, including without
limitation, the following:
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(1) As among the Trustees, each Administrative Trustee, acting singly
or jointly, shall have the power and authority to act on behalf of the Trust
with respect to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements or documents as
may be necessary or desirable in connection with the purposes and function
of the Trust;
(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state securities or
blue sky laws, and the qualification of this Trust Agreement as a trust
indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon
the NASDAQ National Market or such securities exchange or exchanges as
shall be determined by the Depositor and the registration of the Preferred
Securities under the Securities Exchange Act of 1934, as amended, and the
preparation and filing of all periodic and other reports and other
documents pursuant to the foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(G) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the Secretary
of State of the State of Delaware;
(H) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory business trust under the
laws of the State of Delaware and of each other jurisdiction in which such
existence is necessary to protect the limited liability of the Holders of
the Preferred Securities or to enable the Trust to effect the purposes for
which the Trust was created; and
(I) the taking of any action incidental to the foregoing as the
Administrative Trustees may from time to time determine is necessary or
advisable to give effect to the terms of this Trust Agreement for the
benefit of the Securityholders (without consideration of the effect of any
such action on any particular Securityholder).
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(2) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the following
matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities in accordance with the terms of this Trust
Agreement;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the Securityholders in
accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust;
(I) after an Event of Default the taking of any action
incidental to the foregoing as the Property Trustee may from time to time
determine is necessary or advisable to give effect to the terms of this
Trust Agreement and protect and conserve the Trust Property for the benefit
of the Securityholders (without consideration of the effect of any such
action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance
with this Trust Agreement; and
(K) except as otherwise provided in this Section 2.7(a)(2), the
Property Trustee shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in Section 2.7(a)(1).
(b) So long as this Trust Agreement remains in effect, the Trust (or
the Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not (i) acquire any investments or
engage in any activities not authorized by this Trust Agreement, (ii) sell,
assign, transfer, exchange, mortgage, pledge, set-off or otherwise dispose of
any of the Trust
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Property or interests therein, including to Securityholders, except as expressly
provided herein, (iii) take any action that would cause the Trust to fail or
cease to qualify as a "grantor trust" for United States federal income tax
purposes, (iv) incur any indebtedness for borrowed money or issue any other debt
or (v) take or consent to any action that would result in the placement of a
Lien on any of the Trust Property. The Administrative Trustees shall defend all
claims and demands of all Persons at any time claiming any Lien on any of the
Trust Property adverse to the interest of the Trust or the Securityholders in
their capacity as Securityholders.
(c) In connection with the issue and sale of the Preferred
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(1) the preparation and filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities and the
Debentures, including any amendments thereto;
(2) the determination of the states in which to take appropriate
action to qualify or, register for sale all or part of the Preferred
Securities and to do any and all such acts, other than actions which must
be taken by or on behalf of the Trust, and advise the Trustees of actions
they must take on behalf of the Trust, and prepare for execution and filing
any documents to be executed and filed by the Trust or on behalf of the
Trust, as the Depositor deems necessary or advisable in order to comply
with the applicable laws of any such states;
(3) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the NASDAQ National Market or a
national stock exchange or other organizations for listing upon notice of
issuance of any Preferred Securities and to file or cause an Administrative
Trustee to file thereafter with such exchange or organization such
notifications and documents as may be necessary from time to time;
(4) the preparation for filing by the Trust with the Commission
and the execution on behalf of the Trust of a registration statement on
Form 8-A relating to the registration of the Preferred Securities under
Section 12(b) or 12(g) of the Exchange Act, including any amendments
thereto;
(5) the negotiation of the terms of, and the execution an
delivery of, the Underwriting Agreement providing for the sale of the
Preferred Securities; and
(6) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the
Administrative Trustees are authorized and directed to conduct the affairs of
the Trust and to operate the Trust so that the
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Trust will not be deemed to be an "investment company" required to be registered
under the 1940 Act, will be classified as a "grantor trust" and not as an
association taxable as a corporation for United States federal income tax
purposes and so that the Debentures will be treated as indebtedness of the
Depositor for United States federal income tax purposes. In this connection,
subject to Section 10.2, the Depositor and the Administrative Trustees are
authorized to take any action, not in consistent with applicable law or this
Trust Agreement, that each of the Depositor and the Administrative Trustees
determines in their discretion to be necessary or desirable for such purposes.
2.8 Assets of Trust. The assets of the Trust shall consist of the Trust
Property.
2.9 Title to Trust Property. Legal title to all Trust Property shall be
vested at all times in the Property Trustee (in its capacity as such) and shall
be held and administered by the Property Trustee for the benefit of the
Securityholders in accordance with this Trust Agreement.
3. Payment Account.
3.1 Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and any agent of the
Property Trustee shall have exclusive control and sole right of withdrawal with
respect to the Payment Account for the purpose of making deposits and
withdrawals from the Payment Account in accordance with this Trust Agreement.
All monies and other property deposited or held from time to time in the Payment
Account shall be held by the Property Trustee in the Payment Account for the
exclusive benefit of the Securityholders and for distribution as herein
provided, including (and subject to) any priority of payments provided for
herein.
(b) The Property Trustee shall deposit in the Payment Account,
promptly upon receipt, all payments of principal of or interest on, and any
other payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
4. Distributions, Redemption.
4.1 Distributions.
(a) Distributions on the Trust Securities shall be cumulative, and
will accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accumulate from _________, 1997,
and, except during any Extended Interest Payment Period with respect to the
Debentures, shall be payable quarterly in arrears on March 31, June 30,
September 30 and December 31 of each year, commencing on June 30, 1997 (each
date on which distributions are payable in accordance with the foregoing a
"Distribution Date").
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If any date on which a Distribution is otherwise payable on the Trust Securities
is not a Business Day, then the payment of such Distribution shall be made on
the next succeeding day that is a Business Day (and without any additional
Distributions, interest or other payment in respect of any such delay), in each
case with the same force and effect as if made on the date such payment was
originally payable.
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and the Distributions on the Trust Securities shall be
payable at a rate of _____% per annum of the Liquidation Amount of the Trust
Securities. The amount of Distributions payable for any full period shall be
computed on the basis of a 360-day year of twelve 30-day months. The amount of
Distributions for any partial period shall be computed on the basis of the
number of days elapsed in a 360-day year of twelve 30 day months. During any
Extended Interest Payment Period with respect to the Debentures, Distributions
on the Preferred Securities will be deferred for a period equal to the Extended
Interest Payment Period. The amount of Distributions payable for any period
shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the
Property Trustee solely from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on hand and
immediately available in the Payment Account for the payment of such
Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities on the relevant record date, which
shall be one Business Day prior to such Distribution Date; provided, however,
that in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the 15th day of the month in which the
relevant Distribution Date occurs.
4.2 Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of
the Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Securities Register. The Property
Trustee shall have no responsibility for the accuracy of any CUSIP number
contained in such notice. All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
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(3) the CUSIP number;
(4) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the aggregate Liquidation Amount of the
particular Trust Securities to be redeemed; and
(5) that on the Redemption Date the Redemption Price will become
due and payable upon each such Trust Security to be redeemed and that
Distributions thereon will cease to accumulate on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Trust has immediately available funds then on hand and available in the
Payment Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so long
as the Preferred Securities are in book-entry-only form, deposit with the
Clearing Agency for the Preferred Securities funds sufficient to pay the
applicable Redemption Price and will give such Clearing Agency irrevocable
instructions and authority to pay the Redemption Price to the holders thereof.
If the Preferred Securities are no longer in book-entry-only form, the Property
Trustee, subject to Section 4.2(c), will deposit with the Paying Agent funds
sufficient to pay the applicable Redemption Price and will give the Paying Agent
irrevocable instructions and authority to pay the Redemption Price to the
Holders thereof upon surrender of their Preferred Securities Certificates.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Trust Securities called for redemption shall be payable
to the Holders of such Trust Securities as they appear on the Register for the
Trust Securities on the relevant record dates for the related Distribution
Dates. If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of Securityholders
holding Trust Securities so called for redemption will cease, except the right
of such Securityholders to receive the Redemption Price and any Distribution
payable on or prior to the Redemption Date, but without interest, and such
Securities will cease to be Outstanding. In the event that any date on which any
Redemption Price is payable is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay), with the same force and effect as if made on such date. In the
event that payment of the Redemption Price in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either by
the Trust or by the Depositor pursuant to the Guarantee, Distributions on such
Trust Securities will continue to accumulate, at the then applicable rate, from
the Redemption Date originally established by the Trust for such Trust
Securities to the date such Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
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(e) Payment of the Redemption Price on the Trust Securities shall be
made to the record holders thereof as they appear on the Securities Register for
the Trust Securities on the relevant record date, which shall be one Business
Day prior to the relevant Redemption Date; provided, however, that in the event
that the Preferred Securities do not remain in book-entry-only form, the
relevant record date shall be a date at least fifteen days prior to the relevant
Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption Date by the
Property Trustee from the outstanding Preferred Securities not previously called
for redemption, by such method (including, without limitation, by lot) as the
Property Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to $25 or an integral multiple of
$25 in excess thereof) of the Liquidation Amount of Preferred Securities of a
denomination larger than $25. The Property Trustee shall promptly notify the
Securities Registrar in writing of the Preferred Securities selected for
redemption and, in the case of any Preferred Securities selected for partial
redemption, the Liquidation Amount thereof to be redeemed. For all purposes of
this Trust Agreement, unless the context otherwise requires, all provisions
relating to the redemption of Preferred Securities shall relate, in the case of
any Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities which has been or is to be
redeemed.
4.3 Subordination of Common Securities.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 4.2(f), pro rata among the Common
Securities and the Preferred Securities based on the Liquidation Amount of the
Trust Securities; provided, however, that if on any Distribution Date or
Redemption Date any Event of Default resulting from a Debenture Event of Default
shall have occurred and be continuing, no payment of any Distribution (including
Additional Amounts, if applicable) on, or Redemption Price of, any Common
Security, and no other payment on account of the redemption, liquidation or
other acquisition of Common Securities, shall be made unless payment in full in
cash of all accumulated and unpaid Distributions (including Additional Amounts,
if applicable) on all Outstanding Preferred Securities for all Distribution
periods terminated on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all Outstanding
Preferred Securities then called for redemption, shall have been made or
provided for, and all funds immediately available to the Property Trustee shall
first be applied to the payment in full in cash of all Distributions (including
Additional Amounts, if applicable) on, or the Redemption Price of, Preferred
Securities then due and payable.
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(b) In the case of the occurrence of any Event of Default resulting
from a Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of Default
under this Trust Agreement until the effect of all such Events of Default with
Respect to the Preferred Securities shall have been cured, waived or otherwise
eliminated. Until any such Event of Default under this Trust Agreement with
respect to the Preferred Securities shall have been so cured, waived or
otherwise eliminated, the Property Trustee shall act solely on behalf of the
Holders of the Preferred Securities and not the Holder of the Common Securities,
and only the Holders of the Preferred Securities will have the right to direct
the Property Trustee to act on their behalf.
4.4 Payment Procedures. Payments of Distributions (including Additional
Amounts, if applicable) in respect of the Preferred Securities shall be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Securities Register or, if the Preferred Securities are held by a
Clearing Agency, such Distributions shall be made to the Clearing Agency in
immediately available funds, which shall credit the relevant Persons' accounts
at such Clearing Agency on the applicable distribution dates. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Common Securityholder.
4.5 Tax Returns and Reports. The Administrative Trustees shall prepare
(or cause to be prepared), at the Depositor's expense, and file all United
States federal, state and local tax and information returns and reports required
to be filed by or in respect of the Trust. In this regard, the Administrative
Trustees shall (a) prepare and file (or cause to be prepared and filed) the
appropriate Internal Revenue Service Form required to be filed in respect of the
Trust in each taxable year of the Trust and (b) prepare and furnish (or cause to
be prepared and furnished) to each Securityholder the appropriate Internal
Revenue Service Form required to be furnished to such Securityholder or the
information required to be provided on such form. The Administrative Trustees
shall provide the Depositor with a copy of all such returns and reports promptly
after such filing or furnishing. The Property Trustee shall comply with the
United States federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to
Securityholders under the Trust Securities.
4.6 Payment of Taxes, Duties, Etc. Of The Trust. Upon receipt under the
Debentures of Additional Sums, the Property Trustee, at the direction of an
Administrative Trustee or the Depositor, shall promptly pay any taxes, duties or
governmental charges of whatsoever nature (other than withholding taxes) imposed
on the Trust by the United States or any other taxing authority.
4.7 Payments Under Indenture. Any amount payable hereunder to any Holder
of Preferred Securities shall be reduced by the amount of any corresponding
payment such Holder has directly received under the Indenture pursuant to
Section 5.14(b) or 5.14(c) hereof.
5. Trust Securities Certificates.
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5.1 Initial Ownership. Upon the creation of the Trust and the
contribution by the Depositor pursuant to Section 2.3 and until the issuance of
the Trust Securities, and at any time during which no Trust Securities are
outstanding, the Depositor shall be the sole beneficial owner of the Trust.
5.2 The Trust Securities Certificates. The Preferred Securities
Certificates shall be issued in minimum denominations of $25 Liquidation Amount
and integral multiples of $25 in excess thereof, and the Common Securities
Certificates shall be issued in denominations of $25 Liquidation Amount and
integral multiples thereof. The Trust Securities Certificates shall be executed
on behalf of the Trust by manual signature of at least one Administrative
Trustee. Trust Securities Certificates bearing the manual signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefits of the Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of such
Trust Securities Certificates or did not hold such offices at the date of
delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled to
the rights and subject to the obligations of a Securityholder hereunder, upon
due registration of such Trust Securities Certificate in such transferee's name
pursuant to Sections 5.4, 5.11 and 5.13.
5.3 Execution And Delivery Of Trust Securities Certificates. On the
Closing Date and on the date on which the Underwriter exercises the Option, as
applicable (the "Option Closing Date"), the Administrative Trustees shall cause
Trust Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust by at least one of
the Administrative Trustees and delivered to or upon the written order of the
Depositor, signed by its President, any Vice President, the Treasurer or any
Assistant Treasurer without further corporate action by the Depositor, in
authorized denominations.
5.4 Registration Of Transfer And Exchange Of Preferred Securities
Certificates.
(a) The Depositor shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 5.8, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Preferred Securities Certificates (herein referred to as the "Securities
Register") in which the registrar designated by the Depositor (the "Securities
Registrar"), subject to such reasonable regulations as it may prescribe, shall
provide for the registration of Preferred Securities Certificates and Common
Securities Certificates (subject to Section in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Property Trustee shall be the
initial Securities Registrar.
(b) Upon surrender for registration of transfer of any Preferred
Securities Certificate at the office or agency maintained pursuant to Section
5.8, the Administrative Trustees or any one of them shall execute and deliver,
in the name of the designated transferee or transferees, one or
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more new Preferred Securities Certificates in authorized denominations of a like
aggregate Liquidation Amount dated the date of execution by such Administrative
Trustee or Trustees. The Securities Registrar shall not be required to register
the transfer of any Preferred Securities that have been called for redemption.
At the option of a Holder, Preferred Securities Certificates may be exchanged
for other Preferred Securities Certificates in authorized denominations of the
same class and of a like aggregate Liquidation Amount upon surrender of the
Preferred Securities Certificates to be exchanged at the office or agency
maintained pursuant to Section 5.8.
(c) Every Preferred Securities Certificate presented or surrendered
for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly authorized
in writing. Each Preferred Securities Certificate surrendered for registration
of transfer or exchange shall be canceled and subsequently disposed of by the
Property Trustee in accordance with its customary practice. The Trust shall not
be required to (i) issue, register the transfer of, or exchange any Preferred
Securities during a period beginning at the opening of business 15 calendar days
before the date of mailing of a notice of redemption of any Preferred Securities
called for redemption and ending at the close of business on the day of such
mailing or (ii) register the transfer of or exchange any Preferred Securities so
selected for redemption, in whole or in part, except the unredeemed portion of
any such Preferred Securities being redeemed in part.
(d) No service charge shall be made for any registration of transfer
or exchange of Preferred Securities Certificates, but the Securities Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Preferred
Securities Certificates.
5.5 Mutilated, Destroyed, Lost Or Stolen Trust Securities Certificates.
If (a) any mutilated Trust Securities certificate shall be surrendered to the
Securities Registrar, or if the Securities Registrar shall receive evidence to
its satisfaction of the destruction, loss or theft of any Trust Securities
Certificate and (b) there shall be delivered to the Securities Registrar and the
Administrative Trustees such security or indemnity as may be required by them to
save each of them harmless, then in the absence of notice that such Trust
Securities Certificate shall have been acquired by a bona fide purchaser, the
Administrative Trustees, or any one of them, on behalf of the Trust shall
execute and make available for delivery, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Trust Securities Certificate, a new Trust
Securities Certificate of like class, tenor and denomination. In connection with
the issuance of any new Trust Securities Certificate under this Section, the
Administrative Trustees or the Securities Registrar may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Trust Securities Certificate issued
pursuant to this Section shall constitute conclusive evidence of an undivided
beneficial interest in the assets of the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Securities Certificate shall be found
at any time.
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5.6 Persons Deemed Securityholders. The Trustees, the Paying Agent and
the Securities Registrar shall treat the Person in whose name any Trust
Securities Certificate shall be registered in the Securities Register as the
owner of such Trust Securities Certificate for the purpose of receiving
Distributions and for all other purposes whatsoever, and neither the Trustees
nor the Securities Registrar shall be bound by any notice to the contrary.
5.7 Access To List Of Securityholders' Name And Addresses. At any time
when the Property Trustee is not also acting as the Securities Registrar, the
Administrative Trustees or the Depositor shall furnish or cause to be furnished
to the Property Trustee (a) semi-annually on or before January 15 and July 15 in
each year, a list, in such form as the Property Trustee may reasonably require,
of the names and addresses of the Securityholders as of the most recent record
date and (b) promptly after receipt by any Administrative Trustee or the
Depositor of a request therefor from the Property Trustee in order to enable the
Property Trustee to discharge its obligations under this Trust Agreement, in
each case to the extent such information is in the possession or control of the
Administrative Trustees or the Depositor and is not identical to a previously
supplied list or has not otherwise been received by the Property Trustee in its
capacity as Securities Registrar. The rights of Securityholders to communicate
with other Securityholders with respect to their rights under this Trust
Agreement or under the Trust Securities, and the corresponding rights of the
Trustee shall be as provided in the Trust Indenture Act. Each Holder, by
receiving and holding a Trust Securities Certificate, and each owner shall be
deemed to have agreed not to hold the Depositor, the Property Trustee or the
Administrative Trustees accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
5.8 Maintenance Of Office Or Agency. The Administrative Trustees shall
maintain in Boston, Massachusetts, an office or offices or agency or agencies
where Preferred Securities Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustees in
respect of the Trust Securities Certificates may be served. The Administrative
Trustees initially designate the principal corporate trust office of the
Property Trustee, at Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Department as the principal corporate trust
office for such purposes. The Administrative Trustees shall give prompt written
notice to the Depositor and to the Securityholders of any change in the location
of the Securities Registrar or any such office or agency.
5.9 Appointment Of Paying Agent. The Paying Agent shall make
Distributions to Securityholders from the Payment Account and shall report the
amounts of such Distributions to the Property Trustee and the Administrative
Trustees. Any Paying Agent shall have the revocable power to withdraw funds from
the Payment Account for the purpose of making the Distributions referred to
above. The Administrative Trustees may revoke such power and remove the Paying
Agent if such Trustees determine in their sole discretion that the Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. The Paying Agent shall initially be the Property Trustee, and
any co-paying agent chosen by the Property Trustee, and acceptable to the
Administrative Trustees, and the Depositor. Any Person acting as Paying
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Agent shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Administrative Trustees, the Property Trustee and the Depositor. In the
event that the Property Trustee shall no longer be the Paying Agent or a
successor Paying Agent shall resign or its authority to act be revoked, the
Administrative Trustees shall appoint a successor that is acceptable to the
Property Trustee and the Depositor to act as Paying Agent (which shall be a bank
or trust company). The Administrative Trustees shall cause such successor Paying
Agent or any additional Paying Agent appointed by the Administrative Trustees to
execute and deliver to the Trustees an instrument in which such successor Paying
Agent or additional Paying Agent shall agree with the Trustees that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Securityholders in trust for the
benefit of the Securityholders entitled thereto until such sums shall be paid to
such Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall also
return all funds in its possession to the Property Trustee. The provisions of
Sections 8.1, and 8.6 shall apply to the Property Trustee also in its role as
Paying Agent, for so long as the Property Trustee shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference to this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
5.10 Ownership Of Common Securities By Depositor. On the Closing Date,
the Depositor shall acquire and retain beneficial and record ownership of the
Common Securities. To the fullest extent permitted by law, any attempted
transfer of the Common Securities (other than a transfer in connection with a
merger or consolidation of the Depositor into another corporation pursuant to
Section 12.1 of the Indenture) shall be void. The Administrative Trustees shall
cause each Common Securities Certificate issued to the Depositor to contain a
legend stating "THIS CERTIFICATE IS NOT TRANSFERABLE".
5.11 Book-Entry Preferred Securities Certificates; Common Securities
Certificate.
(a) The Preferred Securities Certificates, upon original issuance,
will be issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to or held on behalf of the Depositary Trust Company, the initial
Clearing Agency, by, or on behalf of, the Trust. Such Book-Entry Preferred
Securities Certificate or Certificates shall initially be registered on the
Securities Register in the name of Cede & Co. the nominee of the initial
Clearing Agency, and no beneficial owner will receive a Definitive Preferred
Securities Certificate representing such beneficial owner's interest in such
Preferred Securities, except as provided in Section 5.13 unless and until
Definitive Preferred Securities Certificates have been issued to beneficial
owners pursuant to Section 5.13:
(1) the provisions of this Section 5.11(a) shall be in full
force and effect;
(2) the Securities Registrar, the Paying Agent and the Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book
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Entry Preferred Securities Certificates (including the payment of the
Liquidation Amount of and Distributions on the Book-Entry Preferred
Securities) as the sole Holder of Book-Entry Preferred Securities and shall
have no obligations to the Owners thereof;
(3) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the provisions
of the Section 5.11 shall control; and
(4) the rights of the Owners of the Book-Entry Preferred
Securities Certificates shall be exercised only through the Clearing Agency
and shall be limited to those established by law and agreements between
such Owners and the Clearing Agency and/or the Clearing Agency
Participants. Pursuant to the Certificate Depository Agreement, unless and
until Definitive Preferred Securities Certificates are issued pursuant to
Section 5.13, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit payments on
the Preferred Securities to such Clearing Agency Participants. Any Clearing
Agency designated pursuant hereto will not be deemed an agent of the
Trustees for any purpose.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
5.12 Notices To Clearing Agency. To the extent that a notice or other
communication to the Owners is required under this Trust Agreement, unless and
until Definitive Preferred Securities Certificates shall have been issued to
Owners pursuant to Section 5.13, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to the Owners.
5.13 Definitive Preferred Securities Certificates. If (a) the Depositor
advises the Trustees in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Preferred
Securities Certificates, and the Depositor is unable to locate a qualified
successor, or if at any time the Depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934, as amended, at a time when
the Depositary is required to be so registered to act as such depositary, (b)
the Depositor at its option advises the Trustees in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (c) after the
occurrence of a Debenture Event of Default, Owners of Preferred Securities
Certificates representing beneficial interests aggregating at least a majority
of the Liquidation Amount advise the Property Trustee in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Owners of Preferred Securities Certificates, then the
Property Trustee shall notify the Clearing Agency, and the Clearing Agency shall
notify all Owners of Preferred Securities Certificates, of the occurrence of any
such event and of the availability of the Definitive Preferred Securities
Certificates to owners of such class or classes, as applicable, requesting the
same. Upon surrender to the Property Trustee of the typewritten Preferred
Securities Certificate or Certificates representing the Book-Entry Preferred
Securities Certificates by the Clearing Agency, accompanied by
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registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities Registrar
nor the Trustees shall be liable for any delay in delivery of such instructions
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Preferred Securities Certificates,
the Trustees shall recognize the Holders of the Definitive Preferred Securities
Certificates as Securityholders. The Definitive Preferred Securities
Certificates shall be printed, lithographed or engraved or may be produced in
any other manner as is reasonably acceptable to the Administrative Trustees, as
evidenced by the execution thereof by the Administrative Trustees or any one of
them.
5.14 Rights Of Securityholders.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Securityholders shall not have any right or title therein other than the
undivided beneficial interest in the assets of the Trust conferred by their
Trust Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust Securities
shall have no preemptive or similar rights. When issued and delivered to the
Holders of the Preferred Securities against payment of the purchase price
therefor, the Preferred Securities will be fully paid and nonassessable
interests in the Trust. The Holders of the Preferred Securities, in their
capacities as such, shall be entitled to the same limitation of personal
liability extended to stockholders of private corporations for profit organized
under the General Corporation Law of the State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders of
not less than 25% in principal amount of the outstanding Debentures fail to
declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to the
Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal and
interest on such Debentures shall remain subordinated to the extent provided in
the Indenture.
(c) For so long as any Preferred Securities remain outstanding, if,
upon a Debenture Event of Default, arising from the failure to pay interest or
principal on the Debentures, the Holders of any Preferred Securities then
Outstanding shall, to the fullest extent permitted by law, have the right to
directly institute proceedings for enforcement of payment to such Holders of
principal of or interest on the Debentures having a principal amount equal to
the Liquidation Amount of the Preferred Securities of such Holders.
6. Acts Of Securityholders; Meetings; Voting.
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6.1 Limitations on Voting Rights.
(a) Except as provided in this Section, in Sections 5.14, 8.10 and
10.2 and in the Indenture and as otherwise required by law, no Holder of
Preferred Securities shall have any right to vote or in any manner otherwise
control the administration, operation and management of the Trust or the
obligations of the parties hereto, nor shall anything herein set forth, or
contained in the terms of the Trust Securities Certificates, be construed so as
to constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
Property Trustee shall not (i) direct the time, method and place of conducting
any proceeding for any remedy available to the Debenture Trustee, or executing
any trust or power conferred on the Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 6 of the
Indenture, (iii) exercise any right to rescind or annul a declaration that the
principal of all the Debentures shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Debentures, where
such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of at least a majority in Liquidation Amount of all
Outstanding Preferred Securities; provided, however, that where a consent under
the Indenture would require the consent of each Holder of Outstanding Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior written consent of each holder of Preferred Securities. The Property
Trustee shall not revoke any action previously authorized or approved by a vote
of the Holders of the Outstanding Preferred Securities, except by a subsequent
vote of the Holders of the outstanding Preferred Securities. The Property
Trustee shall notify each Holder of the Outstanding Preferred Securities of any
notice of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the Holders of
the Preferred Securities, prior to taking any of the foregoing actions, the
Property Trustee shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will continue
to be classified as a grantor trust and not as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of the
Preferred Securities, whether by way of amendment to the Trust Agreement or
otherwise, or (ii) the dissolution, winding-up or termination of the Trust,
other than pursuant to the terms of this Trust Agreement, then the Holders of
Outstanding Preferred Securities as a class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a majority in Liquidation
Amount of the Outstanding Preferred Securities. No amendment to this Trust
Agreement may be made if, as a result of such amendment, the Trust would cease
to be classified as a grantor trust or would be classified as an association
taxable as a corporation for United States federal income tax purposes.
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6.2 Notice of Meetings. Notice of all meetings of the Preferred
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.8 to each Preferred
Securityholder of record, at his registered address, at least 15 days and not
more than 90 days before the meeting. At any such meeting, any business
properly before the meeting may be so considered whether or not stated in the
notice of the meeting. Any adjourned meeting may be held as adjourned without
further notice.
6.3 Meetings of Preferred Securityholders.
(a) No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders of
25% of the Outstanding Preferred Securities (based upon their aggregate
Liquidation Amount) and the Administrative Trustees or the Property Trustee may,
at any time in their discretion, call a meeting of Preferred Securityholders to
vote on any matters as to which the Preferred Securityholders are entitled to
vote.
(b) Preferred Securityholders of record of 50% of the Outstanding
Preferred Securities (based upon their aggregate Liquidation Amount), present in
person or by proxy, shall constitute a quorum at any meeting of Securityholders.
(c) If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding more
than a majority of the Preferred Securities (based upon their aggregate
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of the
Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
6.4 Voting Rights. Securityholders shall be entitled to one vote for each
$25 of Liquidation Amount represented by their Trust Securities in respect of
any matter as to which such Securityholders are entitled to vote.
6.5 Proxies, Etc. At any meeting of Securityholders, any Securityholder
entitled to vote thereat may vote by proxy, provided that no proxy, shall be
voted at any meeting unless it shall have been placed on file with the
Administrative Trustees, or with such other officer or agent of the Trust as the
Administrative Trustees may direct, for verification prior to the time at which
such vote shall be taken. When Trust Securities are held jointly by several
persons, any one of them may vote at any meeting in person or by proxy in
respect of such Trust Securities, but if more than one of them shall be present
at such meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received in
respect of such Trust Securities. A proxy purporting to be executed by or on
behalf of a Securityholder shall be deemed valid unless challenged at or prior
to its exercise, and, the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
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6.6 Securityholder Action by Written Consent. Any action which may be
taken by Securityholders at a meeting may be taken without a meeting if
Securityholders holding more than a majority of all Outstanding Trust Securities
(based upon their aggregate Liquidation Amount) entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
express provision of this Trust Agreement) shall consent to the action in
writing (based upon their aggregate Liquidation Amount).
6.7 Record Date for Voting and Other Purposes. For the purposes of
determining the Securityholders who are entitled to notice of and to vote at any
meeting or by written consent, or to participate in any Distribution on the
Trust Securities in respect of which a record date is not otherwise provided for
in this Trust Agreement, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
6.8 Acts of Securityholders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Trust Agreement to be
given, made or taken by Securityholders or Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders or owners in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders or Owners signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Trustees, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner which any Trustee receiving the same deems sufficient.
(c) The ownership of Preferred Securityholders shall be proved by the
Securities Register.
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(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of every
Trust Security issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done, omitted or suffered to
be done by the Trustees or the Trust in reliance thereon, whether or not
notation of such action is made upon such Trust Security.
(e) Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
liquidation amount.
(f) Securityholder may institute a legal proceeding directly against
the Depositor under the Guarantee to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trust (as
defined in the Guarantee), the Trust or any Person.
6.9 Inspection of Records. Upon reasonable notice to the Administrative
Trustees and the Property Trustee, the records of the Trust shall be open to
inspection by Securityholders during normal business hours for any purpose
reasonably related to such Securityholder's interest as a Securityholder.
7. Representations And Warranties.
7.1 Representations and Warranties of the Bank. The Bank, as of the date
hereof, and each Successor Property Trustee at the time of the Successor
Property Trustee's acceptance of its appointment as Property Trustee hereunder
(the term "Bank" being used to refer to such Successor Property Trustee in its
separate corporate capacity) hereby represents and warrants (as applicable) for
the benefit of the Depositor and the Securityholders that:
(a) the Bank is a Massachusetts banking corporation duly organized,
validly existing and in good standing under the laws of the State of
Massachusetts;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized executed and
delivered by the Bank and constitutes the valid and legally binding agreement of
the Bank enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors, rights
and to general equity principles;
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(d) the execution, delivery and performance by the Bank of this Trust
Agreement has been duly authorized by all necessary corporate or other action on
the part of the Bank and does not require any approval of stockholders of the
Bank and such execution, delivery and performance will not (i) violate the
Bank's charter or by-laws, (ii) violate any provision of, or constitute, with or
without notice or lapse of time, a default under, or result in the creation or
imposition of, any Lien on any properties included in the Trust Property
pursuant to the provisions of, any indenture, mortgage, credit agreement,
license or other agreement or instrument to which the Bank is a party or by
which it is bound, or (iii) violate any law, governmental rule or regulation of
the United States or the State of Massachusetts, as the case may be, governing
the banking or trust powers of the Bank or any order, judgment or decree
applicable to the Bank;
(e) neither the authorization, execution or delivery by the Bank of
this Trust Agreement nor the consummation of any of the transactions by the
Property Trustee contemplated herein or therein requires the consent or approval
of, the giving of notice to, the registration with or the taking of any other
action with respect to any governmental authority or agency under any existing
federal law governing the banking or trust powers of the Bank under the laws of
the United States or the State of Massachusetts, and
(f) there are no proceedings pending or, to the best of the Bank's
knowledge, threatened against or affecting the Bank in any court or before any
governmental authority, agency or arbitration board or tribunal which,
individually or in the aggregate, would materially and adversely affect the
Trust or would question the right, power and authority of the Bank to enter into
or perform its obligations as one of the Trustees under this Trust Agreement.
7.2 Representations and Warranties of the Delaware Bank. The Delaware
Bank, as of the date hereof, and each Successor Delaware Trustee at the time of
the Successor Delaware Trustee's acceptance of appointment as Delaware Trustee
hereunder (the term "Delaware Bank" being used to refer to such Successor
Delaware Trustee in its separate corporate capacity), hereby represents and
warrants (as applicable) for the benefit of the Depositor and the
Securityholders that:
(a) the Delaware Bank is a Delaware banking corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware;
(b) the Delaware Bank has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and
delivered by the Delaware Trustee and constitutes the valid and legally binding
agreement of the Delaware Bank enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent
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transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors, rights and to general equity principles;
(d) the execution, delivery and performance by the Delaware Bank of
this Trust Agreement has been duly authorized by all necessary corporate or
other action on the part of the Delaware Bank and does not require any approval
of stockholders of the Delaware Bank and such execution, delivery and
performance will not (i) violate the Delaware Bank's charter or by-laws, (ii)
violate any provision of, or constitute, with or without notice or lapse of
time, a default under, or result in the creation or imposition of, any Lien on
any properties included in the Trust Property pursuant to the provisions of, any
indenture, mortgage, credit agreement, license or other agreement or instrument
to which the Delaware Bank is a party or by which it is bound, or (iii) violate
any law, governmental rule or regulation of the United States or the State of
Delaware, as the case may be, governing the banking or trust powers of the
Delaware Bank or any order, judgment or decree applicable to the Delaware Bank;
(e) neither the authorization, execution or delivery by the Delaware
Bank of this Trust Agreement nor the consummation of any of the transactions by
the Delaware Bank contemplated herein or therein requires the consent or
approval of, the giving of notice to, the registration with or the taking of any
other action with respect to any governmental authority or agency under any
existing federal law governing the banking or trust powers of the Delaware Bank
under the laws of the United States or the State of Delaware; and
(f) there are no proceedings pending or, to the best of the Delaware
Bank's knowledge, threatened against or affecting the Delaware Bank in any court
or before any governmental authority, agency or arbitration board or tribunal
which, individually or in the aggregate, would materially and adversely affect
the Trust or would question the right, power and authority of the Delaware
Trustee to enter into or perform its obligations as one of the Trustees under
this Trust Agreement.
7.3 Representations and Warranties of Depositor. The Depositor hereby
represents and warrants for the benefit of the Securityholders that:
(a) the Trust Securities Certificates issued on the Closing Date or
the Option Closing Date, if applicable, on behalf of the Trust have been duly
authorized and will have been, duly and validly executed, issued and delivered
by the Administrative Trustees pursuant to the terms and provisions of, and in
accordance with the requirements of, this Trust Agreement and the
Securityholders will be, as of such date, entitled to the benefits of this Trust
Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the State
of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
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8. The Trustees.
8.1 Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee, by
the Trust Indenture Act. Notwithstanding the foregoing, no provision of this
Trust Agreement shall require the Trustees to expend or risk their own funds or
otherwise incur any financial liability in the performance of any of their
duties hereunder, or in the exercise of any of their rights or powers, if they
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it. No Administrative Trustee nor the Delaware Trustee shall be liable for its
acts or omissions hereunder except as a result of its own gross negligence or
willful misconduct. The Property Trustee's liability shall be determined under
the Trust Indenture Act. Whether or not therein expressly so provided, every
provision of this Trust Agreement relating to the conduct or affecting the
liability of or affording protection to the Trustees shall be subject to the
provisions of this Section. To the extent that, at law or in equity, the
Delaware Trustee or an Administrative Trustee has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to the Securityholders,
the Delaware Trustee or such Administrative Trustee shall not be liable to the
Trust or to any Securityholder for such Trustee's good faith reliance on the
provisions of this Trust Agreement. The provisions of this Trust Agreement, to
the extent that they restrict the duties and liabilities of the Delaware Trustee
or the Administrative Trustees otherwise existing at law or in equity, are
agreed by the Depositor and the Securityholders to replace such other duties and
liabilities of the Delaware Trustee or Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each
Securityholder, by its acceptance of a Trust Security, agrees that it will look
solely to the revenue and proceeds from the Trust Property to the extent legally
available for distribution to it as herein provided and that the Trustees are
not personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Trustees expressly set forth
elsewhere in this Trust Agreement or, in the case of the Property Trustee, in
the Trust Indenture Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property Trustee,
unless it shall be proved that the Property Trustee was negligent in
ascertaining the pertinent facts;
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(2) 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 Trust Securities relating to the time, method and place of conducting any
proceeding for any remedy available to the Property Trustee, or exercising any
trust or power conferred upon the Property Trustee under this Trust Agreement;
(3) the Property Trustee's sole duty with respect to the custody,
safe keeping and physical preservation of the Debentures and the Payment Account
shall be to deal with such Property in a similar manner as the Property Trustee
deals with similar property for its own account, subject to the protections and
limitations on liability afforded to the Property Trustee under this Trust
Agreement and the Trust Indenture Act;
(4) the Property Trustee shall not be liable for any interest on
any money received by it except as it may otherwise agree with the Depositor and
money held by the Property Trustee need not be segregated from other funds held
by it except in relation to the Payment Account maintained by the Property
Trustee pursuant to Section and except to the extent otherwise required by law;
and
(5) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property Trustee be
liable for the negligence, default or misconduct of the Administrative Trustees
or the Depositor.
8.2 Certain Notices.
(a) Within five Business Days after the occurrence of any Event of
Default actually known to the Property Trustee, the Property Trustee shall
transmit, in the manner and to the extent provided in Section 10.8 notice of
such Event of Default to the Securityholders, the Administrative Trustees and
the Depositor, unless such Event of Default shall have been cured or waived. For
purposes of this Section the term "Event of Default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default.
(b) The Administrative Trustees shall transmit, to the Securityholders
in the manner and to the extent provided in Section 10.8 notice of the
Depositor's election to begin or further extend an Extended Interest Payment
Period on the Debentures (unless such election shall have been revoked) within
the time specified for transmitting such notice to the holders of the Debentures
pursuant to the Indenture as originally executed.
8.3 Certain Rights of Property Trustee. Subject to the provisions of
Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation
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of a Holder or transferee, certificate of auditors or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order,
appraisal, bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with other provisions contained
herein or (iii) the Property Trustee is unsure of the application of any
provision of this Trust Agreement, then, except as to any matter as to which the
Preferred Securityholders are entitled to vote under the terms of this Trust
Agreement, the Property Trustee shall deliver a notice to the Depositor
requesting written instructions of the Depositor as to the course of action to
be taken and the Property Trustee shall take such action, or refrain from taking
such action, as the Property Trustee shall be instructed in writing to take, or
to refrain from taking, by the Depositor; provided, however, that if the
Property Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonable shorter
period of time set forth in such notice (which to the extent practicable shall
not be less than two Business Days), it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement as
it shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own bad
faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence of
bad faith on its part, request and conclusively rely upon an Officer's
Certificate which, upon receipt of such request, shall be promptly delivered by
the Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty 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;
(f) the Property Trustee may consult with counsel of its choice (which
counsel may be counsel to the Depositor or any of its Affiliates) and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon and in accordance with such advice, such counsel may be
counsel to the Depositor 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 Trust Agreement from any
court of competent jurisdiction;
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(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Securityholders pursuant to this Trust Agreement, unless
such Securityholders shall have offered to the Property Trustee reasonable
security or indemnity against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such facts
or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or recklessness with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders of the Trust Securities
which instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to direct the
Property Trustee under the terms of the Trust Securities in respect of such
remedy, right or action, (ii) may refrain from enforcing such remedy or right or
taking such other action until such instructions are received, and (iii) shall
be protected in acting in accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action that
is discretionary under the provisions of this Trust Agreement. No provision of
this Trust Agreement shall be deemed to impose any duty or obligation on the
Property Trustee to perform any act or acts or exercise any right, power, duty
or obligation conferred or imposed on it, in any jurisdiction in which it shall
be illegal, or in which the Property Trustee shall be unqualified or incompetent
in accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Property Trustee shall be construed to be a duty.
8.4 Not Responsible for Recitals or Issuance of Securities. The recitals
contained herein and in the Trust Securities Certificates shall be taken as the
statements of the Trust, and the Trustees do not assume any responsibility for
their correctness. The Trustees shall not be accountable for the use or
application by the Depositor of the proceeds of the Debentures.
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8.5 May Hold Securities. Any Trustee or any other agent of any Trustee or
the Trust, in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 8.8 and 8.13 and except as
provided in the definition of the term "Outstanding" in Section 1, may otherwise
deal with the Trust with the same rights it would have if it were not a Trustee
or such other agent.
8.6 Compensation; Indemnity; Fees. The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this Trust
Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to such Trustee's negligence, bad faith or
willful misconduct (or, in the case of the Administrative Trustees or the
Delaware Trustee, any such expense, disbursement or advance as may be
attributable to his or her gross negligence, bad faith or willful misconduct);
and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims, liability,
penalty or expense incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance or administration of this Trust
Agreement, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of its
powers or duties hereunder, except as any such indemnification is attributable
to such Trustee's negligence, bad faith or willful misconduct (or, in the case
of the Administrative Trustees or the Delaware Trustee, any such expense,
disbursement or advance as may be attributable to his or her gross negligence,
bad faith or willful misconduct).
(d) No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
8.7 Corporate Property Trustee Required; Eligibility of Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
eligible pursuant to the Trust Indenture Act to act as such and has a combined
capital and surplus of at least $50,000,000. If any such Person publishes
reports of condition at least annually, pursuant to law or to the requirements
of its supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such Person shall be deemed to be
its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Property Trustee with respect
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to the Trust Securities shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect hereinafter specified in this Section.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law that shall act
through one or more persons authorized to bind such entity.
8.8 Conflicting Interests. If the Property Trustee has or shall acquire a
conflicting interest within the meaning of the Trust Indenture Act, the Property
Trustee shall either eliminate such interest or resign, to the extent and in the
manner provided by, and subject to the provisions of, the Trust Indenture Act
and this Trust Agreement.
8.9 Co-Trustees and Separate Trustee.
(a) Unless an Event of Default shall have occurred and be continuing,
at any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor shall have power to appoint,
and upon the written request of the Property Trustee, the Depositor shall for
such purpose join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Property Trustee either to act as co-
trustee, jointly with the Property Trustee, of all or any part of such Trust
Property, or to the extent required by law to act as separate trustee of any
such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Depositor does not join
in such appointment within 15 days after the receipt by it of a request so to
do, or in case a Debenture Event of Default has occurred and is continuing, the
Property Trustee alone shall have power to make such appointment. Any co-trustee
or separate trustee pointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States or (ii) a legal entity with its principal place of business in the United
States that shall act through one or more persons authorized to bind such
entity.
(b) Should any written instrument from the Depositor be required by
any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right, or power, any
and all such instruments shall, on request, be executed, acknowledged, and
delivered by the Depositor.
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(c) Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(1) The Trust Securities shall be executed and delivered and all
rights, powers, duties and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustees or separate
trustee.
(2) The rights, powers, duties and obligations hereby conferred
or imposed upon the Property Trustee in respect of any property covered by
such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-
trustee or separate trustee jointly, as shall be provided in the instrument
appointing such co-trustee or separate trustee, except to the extent that
under any law of any jurisdiction in which any particular act is to be
performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(3) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept
the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred
and is continuing, the Property Trustee shall have the power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the
execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor
to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section 8.9.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee
or any other trustee hereunder.
(5) The Property Trustee shall not be liable by reason of any act
of a co-trustee or separate trustee.
(6) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
8.10 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of any Trustee (the "Relevant Trustee")
and no appointment of a successor Trustee pursuant to this Section shall become
effective until the
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acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 8.11.
(a) Subject to the immediately preceding paragraph, the Relevant
Trustee may resign at any time with respect to the Trust Securities by giving
written notice thereof to the Securityholders. If the instrument of acceptance
by the successor Trustee required by Section 8.11 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the Depositor,
any court of competent jurisdiction for the appointment of a successor Relevant
Trustee with respect to the Trust Securities.
(c) Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of at least 25% in Liquidation
Amount of the Preferred Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Common Securityholder at any time.
(d) If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees with respect to the Trust Securities and the Trust, and the successor
Trustee shall comply with the applicable requirements of Section 8.11. If the
Property Trustee or the Delaware Trustee shall resign, be removed or become
incapable of continuing to act as the Property Trustee or the Delaware Trustee,
as the case may be, at a time when a Debenture Event of Default shall have
occurred and is continuing, the Preferred Securityholders, by Act of the
Securityholders of a majority in Liquidation Amount of the Preferred Securities
then Outstanding delivered to the retiring Relevant Trustee, shall promptly
appoint a successor Relevant Trustee or Trustees with respect to the Trust
Securities and the Trust, and such successor Trustee shall comply with the
applicable requirements of Section 8.11. If an Administrative Trustee shall
resign, be removed or become incapable of acting as Administrative Trustee, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Common Securityholder, by Act of the Common Securityholder delivered to an
Administrative Trustee, shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and the
Trust, and such successor Administrative Trustee or Administrative Trustees
shall comply with the applicable requirements of Section 8.11. If no successor
Relevant Trustee with respect to the Trust Securities shall have been so
appointed by the Common Securityholder or the Preferred Securityholders and
accepted appointment in the manner required by Section 8.11, any Securityholder
who has been a Securityholder of Trust Securities on behalf of himself and all
others similarly situated may petition a court of competent jurisdiction for the
appointment Trustee with respect to the Trust Securities.
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(e) The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust office if it is the Property
Trustee.
(f) Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by: (1) the unanimous act of remaining Administrative Trustees if
there are at least two of them; or (2) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees set forth in Section 8.7).
8.11 Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Relevant
Trustee with respect to the Trust Securities and the Trust, the retiring
Relevant Trustee and each successor Relevant Trustee with respect to the Trust
Securities shall execute and deliver an instrument wherein each successor
Relevant Trustee shall accept such appointment and which shall contain such
provisions as shall be necessary or desirable to transfer and confirm to, and to
vest in, each successor Relevant Trustee all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities and
the Trust and upon the execution and delivery of such instrument the resignation
or removal of the retiring Relevant Trustee shall become effective to the extent
provided therein and each such successor Relevant Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Relevant Trustee with respect to the Trust Securities
and the Trust; but, on request of the Trust or any successor Relevant Trustee
such retiring Relevant Trustee shall duly assign, transfer and deliver to such
successor Relevant Trustee all Trust Property, all proceeds thereof and money
held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Trust.
(b) Upon request of any such successor Relevant Trustee, the Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the immediately preceding paragraph, as the case may be.
(c) No successor Relevant Trustee shall accept its appointment unless
at the time of such acceptance such successor Relevant Trustee shall be
qualified and eligible under this Section.
8.12 Merger, Conversion, Consolidation or Succession to Business. Any
Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger,
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conversion or consolidation to which such Relevant Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of such Relevant Trustee, shall be the successor of such Relevant
Trustee hereunder, provided such Person shall be otherwise qualified and
eligible under this Section, without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
8.13 Preferential Collection of Claims Against Depositor or Trust. If and
when the Property Trustee or the Delaware Trustee shall be or become a creditor
of the Depositor or the Trust (or any other obligor upon the Debentures or the
Trust Securities), the Property Trustee or the Delaware Trustee, as the case may
be, shall be subject to and shall take all actions necessary in order to comply
with the provisions of the Trust Indenture Act regarding the collection of
claims against the Depositor or Trust (or any such other obligor).
8.14 Reports by Property Trustee.
(a) Not later than July 15 of each year commencing with July 15, 1997,
the Property Trustee shall transmit to all Securityholders in accordance with
Section , and to the Depositor, a brief report dated as of such May 15 with
respect to:
(1) its eligibility under Section 8.7 or, in lieu thereof, if to
be the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect; and
(2) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken by
the Property Trustee in the performance of its duties hereunder which it has
not previously reported and which in its opinion materially affects the
Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with the NASDAQ National Market or
other organization upon which the Trust Securities are listed, with the
Commission and with the Depositor.
8.15 Reports to the Property Trustee. The Depositor and the Administrative
Trustees on behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as required by Section 314 of the Trust
Indenture Act (if any) and the compliance certificate required by Section 314(a)
of the Trust Indenture Act in the form, in the manner and at the times required
by Section 314 of the Trust Indenture Act.
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8.16 Evidence of Compliance with Conditions Precedent. Each of the
Depositor and the Administrative Trustees on behalf of the Trust shall provide
to the Property Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Trust Agreement that relate to any of
the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) of the Trust Indenture Act shall be given in the form of an Officers'
Certificate.
8.17 Number of Trustees.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease the
number of Administrative Trustees. The Property Trustee and the Delaware Trustee
may be the same Person.
(b) If a Trustee ceases to hold office for any reason and the number
of Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance with
Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to annul the Trust. Whenever a vacancy in the number of Administrative Trustees
shall occur, until such vacancy is filled by the appointment of an
Administrative Trustee in accordance with Section 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Trust Agreement.
8.18 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21 his
or her power for the purpose of executing any documents contemplated in Section
2.7(a); and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the name of the trust or the names
of the Administrative Trustees or otherwise as the Administrative Trustees may
deem expedient, to the extent such delegation is not prohibited by applicable
law or contrary to the provisions of the Trust, as set forth herein.
8.19 Voting. Except as otherwise provided in this Trust Agreement, the
consent or approval of the Administrative Trustees shall require consent or
approval by not less than a majority of the Administrative Trustees unless there
are only two, in which case both must consent.
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9. Termination, Liquidation And Merger.
9.1 Termination upon Expiration Date. Unless earlier dissolved, the Trust
shall automatically dissolve on March 31, 2036 (the "Expiration Date") subject
to distribution of the Trust Property in accordance with Section 9.4.
9.2 Early Termination. The first to occur of any of the following events is
an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) delivery of written direction to the Property Trustee by the
Depositor at any time (which direction is optional and wholly within the
discretion of the Depositor) to dissolve the Trust and distribute the Debentures
to Securityholders in exchange for the Preferred Securities in accordance with
Section 9.4;
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all of the Debentures; and
(d) an order for dissolution of the Trust shall have been entered by a
court of competent jurisdiction.
9.3 Termination. The respective obligations and responsibilities of the
Trustees and the Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or
upon the redemption of all of the Trust Securities pursuant to Section 4.2, of
all amounts required to be distributed hereunder upon the final payment of the
Trust Securities; (b) the payment of any expenses owed by the Trust; (c) the
discharge of all administrative duties of the Administrative Trustees, including
the performance of any tax reporting obligations with respect to the Trust or
the Securityholders, and (d) the filing of a certificate of cancellation by the
Administrative Trustee under the Business Trust Act.
9.4 Liquidation.
(a) If an Early Termination Event specified in clause (a), (b), or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be liquidated
by the Trustees as expeditiously as the Trustees determine to be possible by
distributing, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, to each Securityholder a Like Amount of Debentures,
subject to Section 9.4(d). Notice of liquidation shall be given by the Property
Trustee by first-class mail, postage pre-paid, mailed not later than 30 nor more
than 60 days prior to the Liquidation Date to each Holder of Trust Securities at
such holder's address appearing in the Securities Register. All notices of
liquidation shall:
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(1) state the Liquidation Date;
(2) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(3) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities certificates for Debentures, or
if Section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment of
a separate exchange agent, shall establish such procedures as it shall deem
appropriate to effect the distribution of Debentures in exchange for the
Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
outstanding, (ii) certificates (or, at the election of the Depositor a Global
Debenture, subject to the provisions of the Indenture) representing a Like
Amount of Debentures will be issued to holders of Trust Securities Certificates
upon surrender of such certificates to the Administrative Trustees or their
agent for exchange, (iii) the Depositor shall use its reasonable efforts to have
the Debentures listed on The Nasdaq Stock Market's National Market or on such
other securities exchange or other organization as the Preferred Securities are
then listed or traded, (iv) any Trust Securities Certificates not so surrendered
for exchange will be deemed to represent a Like Amount of Debentures, accruing
interest at the rate provided for in the Debentures from the last Distribution
Date on which a Distribution was made on such Trust Securities Certificates
until such certificates are so surrendered (and until such certificates are so
surrendered, no payments of interest or principal will be made to holders of
Trust Securities Certificates with respect to such Debentures) and (v) all
rights of Securityholders holding Trust Securities will cease, except the right
of such Securityholders to receive Debentures upon surrender of Trust Securities
Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court of
competent jurisdiction or otherwise, distribution of the Debentures in the
manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as the
Property Trustee determines. In such event, on the date of the dissolution,
winding-up or other termination of the Trust, Securityholders will be entitled
to receive out of the assets of the Trust available for distribution to
Securityholders, after satisfaction of liabilities to creditors of the Trust as
provided by applicable law, an amount equal to the Liquidation Amount per Trust
Security plus
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accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If, upon any such dissolution, winding-up
or termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro rata
basis (based upon Liquidation Amounts). The holder of the Common Securities will
be entitled to receive Liquidation Distributions upon any such dissolution,
winding-up or termination pro rata (determined as aforesaid) with Holders of
Preferred securities, except that, if a Debenture Event of Default has occurred
and is continuing, the Preferred Securities shall have a priority over the
Common Securities.
9.5 Mergers, Consolidations, Amalgamations or Replacements of the Trust.
The Trust may not merge with or into, consolidate, amalgamate, or be replaced
by, or convey, transfer or lease its properties and assets substantially as an
entirety to any corporation or other Person, except pursuant to this Section
9.5. At the request of the Depositor, with the consent of the Administrative
Trustees and without the consent of the holders of the Preferred Securities, the
Property Trustee or the Delaware Trustee, the Trust may merge with or into,
consolidate, amalgamate, be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as such
under the laws of any state; provided, that (i) such successor entity either (a)
expressly assumes all of the obligations of the Trust with respect to the
Preferred Securities or (b) substitutes for the Preferred Securities other
securities having substantially the same terms as the Preferred Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Preferred Securities rank in priority with respect to distributions and payments
upon liquidation, redemption and otherwise, (ii) the Depositor expressly
appoints a trustee of such successor entity possessing substantially the same
powers and duties as the Property Trustee as the holder of the Debentures, (iii)
the Successor Securities are listed or traded, or any Successor Securities will
be listed or traded upon notification of issuance, on the NASDAQ National Market
or any national securities exchange or other organization on which the Preferred
Securities are then listed, if any, (iv) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of the Preferred
Securities (including any Successor Securities) in any material respect (v) such
successor entity has a purpose identical to that of the Trust, (vi) prior to
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease, the Depositor has received an Opinion of Counsel to the effect that (a)
such merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences and privileges of the
holders of the Preferred Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the 1940 Act
and (vii) the Depositor owns all of the Common Securities of such successor
entity and guarantees the obligations of such successor entity under the
Successor Securities at least to the extent provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the consent of
holders of 100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or lease
its properties and assets
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substantially as entirety to any other Person or permit any other Person 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.
10. Miscellaneous Provisions.
10.1 Limitation of Rights of Securityholders. The death or incapacity of
any Person having an interest, beneficial or otherwise, in Trust Securities
shall not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such Person or any Securityholder for such Person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding-up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
10.2 Amendment.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i) as
provided in Section 8.11 with respect to acceptance of appointment by a
successor Trustee, (ii) to cure any ambiguity, correct or supplement any
provision herein or therein which may be inconsistent with any other provision
herein or therein, or to make any other provisions with respect to matters or
questions arising under this Trust Agreement, that shall not be inconsistent
with the other provisions of this Trust Agreement, or (iii) to modify, eliminate
or add to any provisions of this Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the 1940 Act; provided, however, that in the case
of clause (ii), such action shall not adversely affect in any material respect
the interests of any Securityholder; and any amendments of this Trust Agreement
shall become effective when notice thereof is given to the Securityholders.
(b) Except as provided in Section 6.1(c) or Section 10.2(c) hereof, any
provision of this Trust Agreement may be amended by the Trustees and the
Depositor (i) with the consent of Trust Securityholders representing not less
than a majority (based upon Liquidation Amounts) of the Trust Securities then
Outstanding and (ii) upon receipt by the Trustees of an Opinion of Counsel to
the effect that such amendment or the exercise of any power granted to the
Trustees in accordance with such amendment 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 1940 Act.
(c) In addition to and notwithstanding any other provision in this Trust
Agreement, without the consent of each affected Securityholder (such consent
being obtained in accordance with Section 6.3 or 6.6 hereof), this Trust
Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the
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amount of any Distribution required to be made in respect of the Trust
Securities as of a specified date or (ii) restrict the right of a Securityholder
to institute suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with Section 6.3 or
6.6 hereof), this paragraph (c) of this Section 10.2 may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Administrative Trustee shall enter into or consent to any amendment to this
Trust Agreement which would cause the Trust to fail or cease to qualify for the
exemption from status of an "investment company" under the 1940 Act or to fail
or cease to be classified as a grantor trust for United States federal income
tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended in
a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
10.3 Separability. In case any provision in this Trust Agreement or in the
Trust Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not be
in any way affected or impaired thereby.
10.4 Governing Law. This Trust Agreement and the Rights and Obligations of
Each of the Securityholders, the Trust and the Trustees with Respect to this
Trust Agreement and the Trust Securities Shall Be Construed in Accordance with
and Governed by the Laws of the State of Delaware (Without Regard to Conflict of
Laws Principles).
10.5 Payments Due on Non-Business Day. If the date fixed for any payment on
any Trust Security shall be a day that is not a Business Day, then such payment
need not be made on such date but may be made on the next succeeding day which
is a Business Day, with the same force and effect as though made on the date
fixed for such payment, and no distribution shall accumulate thereon for the
period after such date.
10.6 Successors. This Trust Agreement shall be binding upon and shall inure
to the benefit of any successor to the Depositor, the Trust or the Relevant
Trustee(s), including any successor
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by operation of law. Except in connection with a consolidation, merger or sale
involving the Depositor that is permitted under Section 12 of the Indenture and
pursuant to which the assignee agrees in writing to perform the Depositor's
obligations hereunder, the Depositor shall not assign its obligations hereunder.
10.7 Headings. The Section headings are for convenience only and shall not
affect the Construction of this Trust Agreement.
10.8 Reports, Notices and Demands.
(a) Any report, notice, demand or other communication which by any
provision of this Trust Agreement is required or permitted to be given or served
to or upon any Securityholder or the Depositor may be given or served in writing
by deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Preferred Securityholder, to such Preferred Securityholder as such
Securityholder's name and address may appear on the Securities Register; and (b)
in the case of the Common Securityholder or the Depositor, to Community Trust
Bancorp, Inc., 208 North Mayo Trail, Pikeville, Kentucky 40502, Attention:
Treasurer, facsimile no. (606) 437-3366. Any notice to Preferred
Securityholders shall also be given to such owners as have, within two years
preceding the giving of such notice, filed their names and addresses with the
Property Trustee for that purpose. Such notice, demand or other communication
to or upon a Securityholder shall be deemed to have been sufficiently given or
made, for all purposes, upon hand delivery, mailing or transmission.
(b) Any notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon CTBI Trust, the Delaware Trustee the Property Trustee or the Administrative
Trustees shall be given in writing addressed (until another address is published
by the Trust) as follows: (a) with respect to the Property Trustee to State
Street Bank and Trust Company, Two International Place, 4th Floor, Boston,
Massachusetts 02110, Attention: Corporate Trust Department; (b) with respect to
the Delaware Trustee, to Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Trustee Administration; and (c) with respect to the Administrative Trustees, to
them at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of CTBI Preferred Capital Trust." Such notice, demand or
other communication to or upon the Trust or the Property Trustee shall be deemed
to have been sufficiently given or made only upon actual receipt of the writing
by the Trust or the Property Trustee.
10.9 Agreement not to Petition. Each of the Trustees and the Depositor
agree for the benefit of the Securityholders that, until at least one year and
one day after the Trust has been terminated in accordance with Section 9, they
shall not file, or join in the filing of, a petition against the Trust under any
bankruptcy, insolvency, reorganization or other similar law (including, without
limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy
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Laws") or otherwise join in the commencement of any proceeding against the Trust
under any Bankruptcy Law. In the event the Depositor takes action in violation
of this Section 10.9, the Property Trustee agrees, for the benefit of
Securityholders, that at the expense of the Depositor (which expense shall be
paid prior to the filing), it shall file an answer with the bankruptcy court or
otherwise properly contest the filing of such petition by the Depositor against
the Trust or the commencement of such action and raise the defense that the
Depositor has agreed in writing not to take such action and should be stopped
and precluded therefrom. The provisions of this Section 10.9 shall survive the
termination of this Trust Agreement.
10.10 Trust Indenture Act; Conflict with Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required
provision shall control. If any provision of this Trust Agreement modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust Agreement
as so modified or to be excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
10.11 Acceptance of Terms of Trust Agreement, Guarantee and Indenture. The
Receipt and Acceptance of a Trust Security or Any Interest Therein by or on
Behalf of a Securityholder or Any Beneficial Owner, Without Any Signature or
Further Manifestation of Assent, Shall Constitute the Unconditional Acceptance
by the Securityholder and All Others Having a Beneficial Interest in Such Trust
Security of All of the Terms and Provisions of this Trust Agreement and
Agreement to the Subordination Provisions and Other Terms of the Guarantee and
the Indenture, and Shall Constitute the Agreement of the Trust, Such
Securityholder and Such Others That the Terms and Provisions of this Trust
Agreement Shall Be Binding, Operative and Effective as Between the Trust and
Such Securityholder and Such Others.
Community Trust Bancorp, Inc.
as Depositor
By:
__________________________________
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Name: Richard M. Levy
Title: Executive Vice President and
Chief Financial Officer
State Street Bank and Trust Company
as Property Trustee
By:
__________________________________
Name: ___________________________
Title: __________________________
Wilmington Trust Company
as Delaware Trustee
By:
__________________________________
Name: ___________________________
Title: __________________________
---------------------------------------
Jean R. Hale
as Administrative Trustee
---------------------------------------
Richard M. Levy
as Administrative Trustee
<PAGE>
Exhibit "A"
Certificate of Trust of
CTBI Preferred Capital Trust
This Certificate of Trust of the CTBI PREFERRED STOCK TRUST (the
"Trust"), dated March 18, 1997, is being duly executed and filed by WILMINGTON
TRUST COMPANY, a Delaware banking corporation, as trustee, to form a business
trust under the Delaware Business Trust Act (12 Del. C.(S) 3801 et seq.)
1. NAME. The name of the business trust formed hereby is CTBI Preferred
Capital Trust.
2. DELAWARE TRUSTEE. The name and business address of the trustee of the
Trust in the State of Delaware is Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware, 19890-
0001, Attn: Corporate Trust Administration.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective upon
filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
has executed this Certificate of Trust as of the date first above written.
WILMINGTON TRUST COMPANY
as Trustee
By \s\ W. Chris Sponenberg
----------------------------------
Name: W. Chris Sponenberg______
Title: Senior Financial Services Officer
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Exhibit "B"
Certificate Depository Agreement
__________ ___, 1997
The Depository Trust Company
55 Water Street, 49th Floor
New York, New York 10041-0099
Attention: __________________________
General Counsel's Office
Re: CTBI Preferred Capital Trust
Cumulative Trust Preferred Securities
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters relating to the
issuance and deposit with The Depository Trust Company ("DEPOSITORY TRUST
COMPANY") of CTBI Preferred Capital Trust Cumulative Trust Preferred Securities
(the "Preferred Securities"), of CTBI Preferred Capital Trust, a Delaware
business trust (the "Issuer"), created pursuant to a Trust Agreement between
Community Trust Bancorp, Inc. a Kentucky corporation ("CTBI"), State Street Bank
and Trust Company, as Property Trustee, Wilmington Trust Company, as Delaware
and the Administrative Trustees named therein. The payment of distributions on
the Preferred Securities and payments due upon liquidation of Issuer or
redemption of the Preferred Securities, to the extent the Issuer has funds
available for the payment thereof, are guaranteed by CTBI to the extent set
forth in a Guarantee Agreement, dated ___________ ___, 1997, by CTBI with
respect to the Preferred Securities. CTBI and the Issuer propose to sell the
Preferred Securities to Morgan Keegan & Company, Inc. and J.J.B. Hilliard, W. L.
Lyons, Inc. (the"Underwriters") pursuant to an Underwriting Agreement, dated
_________, ___, 1997, by and among the Underwriters, the Issuer and CTBI, and
the Underwriters wish to take delivery of the Preferred Securities through
DEPOSITORY TRUST COMPANY. State Street Bank and Trust Company is acting as
transfer agent and registrar with respect to the Preferred Securities (the
"Transfer Agent and Registrar").
To induce DEPOSITORY TRUST COMPANY to accept the Preferred Securities as
eligible for deposit at DEPOSITORY TRUST COMPANY, and to act in accordance with
DEPOSITORY TRUST COMPANY's rules with respect to the Preferred Securities, the
Issuer, the Transfer Agent and Registrar and DEPOSITORY TRUST COMPANY agree
among each other as follows:
1. Prior to the closing of the sale of the Preferred Securities to the
Underwriter, which is expected to occur on or about April 9, 1997, there shall
be deposited with DEPOSITORY TRUST COMPANY one or more global certificates
(individually and collectively, the "Global
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Certificate") registered in the name of DEPOSITORY TRUST COMPANY's Preferred
Securities nominee, Cede & Co., representing an aggregate of 1,200.000 Preferred
Securities (Liquidation Amount $25 per Preferred Security) and bearing the
following legend:
Unless this certificate is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DEPOSITORY
TRUST COMPANY"), to Issuer or its agent for registration of transfer,
exchange, or payment, and any certificate issued is registered in the
name of Cede & Co. or in such other name as is requested by an
authorized representative of DEPOSITORY TRUST COMPANY (and any payment
is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DEPOSITORY TRUST COMPANY), ANY TRANSFER,
PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has
an interest herein.
2. The Amended and Restated Trust Agreement of the Issuer provides for the
voting by holders of the Preferred Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DEPOSITORY TRUST COMPANY notice of such
record date not less than 15 calendar days in advance of such record date.
3. In the event of a stock split, conversion, recapitalization,
reorganization or any other similar transaction resulting in the cancellation of
all or any part of the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice of
such event at least 5 business days prior to the effective date of such event.
4. In the event of distribution on, or an offering or issuance of rights
with respect to, the Preferred Securities outstanding, the Issuer or the
Transfer Agent and Registrar shall send DEPOSITORY TRUST COMPANY a notice
specifying: (a) the amount of and conditions, if any, applicable to the payment
of any such distribution or any such offering or issuance of rights; (b) any
applicable expiration or deadline date, or any date by which any action on the
part of the holders of Preferred Securities is required; and (c) the date any
required notice is to be mailed by or on behalf of the Issuer to holders of
Preferred Securities or published by or on behalf of the Issuer (whether by mail
or publication, the "Publication Date"). Such notice shall be sent to
DEPOSITORY TRUST COMPANY by a secure means (e.g., legible telecopy, registered
or certified mail, overnight delivery) in a timely manner designed to assure
that such notice is in DEPOSITORY TRUST COMPANY's possession no later than the
close of business on the business day before the Publication Date. The Issuer
or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such
notice shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
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Preferred Securities. After establishing the amount of payment to be made on
the Preferred Securities, the Issuer or the Transfer Agent and Registrar will
notify DEPOSITORY TRUST COMPANY's Dividend Department of such payment 5 business
days prior to payment date. Notices to DEPOSITORY TRUST COMPANY's Dividend
Department by telecopy shall be sent to (212) 709-1723. Such notices by mail or
by any other means shall be sent to:
Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
The Issuer or the Transfer Agent and Registrar shall confirm DEPOSITORY
TRUST COMPANY's receipt of such telecopy by telephoning the Dividend Department
at (212) 709-1270.
5. In the event of a redemption by the Issuer of the Preferred
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DEPOSITORY TRUST COMPANY not less than 30 calendar days prior to
such event by a secure means in the manner set forth in paragraph 4. Such
redemption notice shall be sent to DEPOSITORY TRUST COMPANY's Call Notification
Department at (516) 227-4164 or (516) 227-4190, and receipt of such notice shall
be confirmed by telephoning (516) 227-4070. Notice by mail or by any other
means shall be sent to:
Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719
6. In the event of any invitation to tender the Preferred Securities,
notice specifying the terms of the tender and the Publication Date of such
notice shall be sent by the Issuer or the Transfer Agent and Registrar to
DEPOSITORY TRUST COMPANY by a secure means and in a timely manner as described
in paragraph 4. Notices to DEPOSITORY TRUST COMPANY pursuant to this paragraph
and notices of other corporate actions (including mandatory tenders, exchanges
and capital changes), shall be sent, unless notification to another department
is expressly provided for herein, by telecopy to DEPOSITORY TRUST COMPANY's
Reorganization Department at (212) 709-1093 or (212) 709-1094 and receipt of
such notice shall be confirmed by telephoning (212) 709-6884 or by mail or any
other means to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
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7. All notices and payment advices sent to DEPOSITORY TRUST COMPANY shall
contain the CUSIP number or numbers of the Preferred Securities and the
accompanying designation of the Preferred Securities, which, as of the date of
this letter, is "CTBI Preferred Capital Trust Cumulative Trust Preferred
Securities."
8. Distribution payments or other cash payments with respect to the
Preferred Securities evidenced by the Global Certificate shall be received by
Cede & Co., as nominee of DEPOSITORY TRUST COMPANY, or its registered assigns in
next day funds on each payment date (or in accordance with existing arrangements
between the Issuer or the Transfer Agent and Registrar and DEPOSITORY TRUST
COMPANY). Such payments shall be made payable to the order of Cede & Co., and
shall be addressed as follows:
NDFS Redemption Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695
9. DEPOSITORY TRUST COMPANY may by prior written notice direct the Issuer
and the Transfer Agent and Registrar to use any other telecopy number or address
of DEPOSITORY TRUST COMPANY as the number or address to which notices or
payments may be sent.
10. In the event of a conversion, redemption, or any other similar
transaction (e.g., tender made and accepted in response to the Issuer's or the
Transfer Agent and Registrar's invitation) necessitating a reduction in the
aggregate number of Preferred Securities outstanding evidenced by the Global
Certificate, DEPOSITORY TRUST COMPANY, in its discretion: (a) may request the
Issuer or the Transfer Agent and Registrar to issue and countersign a new Global
Certificate; or (b) may make an appropriate notation on the Global Certificate
indicating the date and amount of such reduction.
11. DEPOSITORY TRUST COMPANY may discontinue its services as a securities
depository with respect to the Preferred Securities at any time by giving at
least 90 days' prior written notice to the Issuer and the Transfer Agent and
Registrar (at which time DEPOSITORY TRUST COMPANY will confirm with the Issuer
or the Transfer Agent and Registrar the aggregate number of Preferred Securities
deposited with it) and discharging its responsibilities with respect thereto
under applicable law. Under such circumstances, the Issuer may determine to
make alternative arrangements for book-entry settlement for the Preferred
Securities, make available one or more separate global certificates evidencing
Preferred Securities to any Participant having Preferred Securities credited to
its DEPOSITORY TRUST COMPANY account, or issue definitive Preferred Securities
to the beneficial holders thereof, and in any such case, DEPOSITORY TRUST
COMPANY agrees to cooperate fully with the Issuer and the Transfer Agent and
Registrar and to return the Global Certificate, duly endorsed for transfer as
directed by the Issuer or the Transfer Agent and Registrar, together with any
other documents of transfer reasonably requested by the Issuer or the Transfer
Agent and Registrar.
-56-
<PAGE>
12. In the event that the Issuer determines that beneficial owners of
Preferred Securities shall be able to obtain definitive Preferred Securities,
the Issuer or the Transfer Agent and Registrar shall notify DEPOSITORY TRUST
COMPANY of the availability of certificates. In such event, the Issuer or the
Transfer Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DEPOSITORY TRUST COMPANY and others, and
DEPOSITORY TRUST COMPANY agrees to cooperate fully with the Issuer and the
Transfer Agent and Registrar and to return the Global Certificate, duly endorsed
for transfer as directed by the Issuer or the Transfer Agent and Registrar,
together with any other documents of transfer reasonably requested by the Issuer
or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Nothing herein shall be deemed to require the Transfer Agent and Registrar
to advance funds on behalf of CTBI Preferred Capital Trust.
Very truly yours,
CTBI Preferred Capital Trust
(As Issuer)
By: ____________________________
Name: Richard M. Levy
Title: Executive Vice President
-57-
<PAGE>
State Street Bank and Trust Company
As Property Trustee and as Transfer
Agent and Registrar
By: ____________________________
Name: __________________________
Title: _________________________
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By: ____________________________
Name: __________________________
Title: _________________________
-58-
<PAGE>
Exhibit "C"
Certificate Evidencing Common Securities
Certificate Number _______ Number of Common Securities
Certificate Evidencing Common Securities
of
CTBI Preferred Capital Trust
% Common Securities
(liquidation amount $25 per Common Security)
CTBI Preferred Capital Trust, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that COMMUNITY
TRUST BANCORP, INC. (the "Holder") is the registered owner of Thirty-Six
Thousand (36,000) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the __________%
Common Securities (liquidation amount $25 per Common Security) (the "Common
Securities"). In accordance with Section 5.10 of the Trust Agreement (as
defined below), the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences, and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Trust, dated
as of __________ _____, 1997, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of ________, 1997.
CTBI Preferred Capital Trust
By:___________________________
Name: _____________________
Title: Administrative Trustee
-59-
<PAGE>
Exhibit "D"
Agreement as to Expenses and Liabilities
AGREEMENT dated as of ____________ ____, 1997, between COMMUNITY TRUST
BANCORP, INC., a Kentucky corporation ("CTBI"), and CTBI Preferred Capital
Trust, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its common securities (the "Common
Securities") to, and receive Debentures from, CTBI and to issue and sell ____%
Cumulative Trust Preferred Securities (the "Preferred Securities") with such
powers, preferences and special rights and restrictions as are set forth in the
Amended and Restated Trust Agreement of the Trust dated as of _____________
____, 1997, as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, CTBI will directly or indirectly own all of the Common Securities
of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase CTBI hereby agrees shall benefit CTBI and
which purchase CTBI acknowledges will be made in reliance upon the execution and
delivery of this Agreement, CTBI, including in its capacity as holder of the
Common Securities, and the Trust hereby agree as follows:
1. Section I.
1.1 Guarantee by CTBI. Subject to the terms and conditions hereof, CTBI,
including in its capacity as holder of the Common Securities, hereby irrevocably
and unconditionally guarantees to each person or entity to whom the Trust is now
or hereafter becomes indebted or liable (the "Beneficiaries") the full payment
when and as due, of any and all Obligations (as hereinafter defined) to such
Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Trust other than obligations of the Trust to pay to holders
of any Preferred Securities or other similar interests in the Trust the amounts
due such holders pursuant to the terms of the Preferred Securities or such other
similar interests, as the case may be. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
1.2 Term of Agreement. This Agreement shall terminate and be of no
further force and effect upon the later of (a) the date on which full payment
has been made of all amounts payable to all holders of all the Preferred
Securities (whether upon redemption, liquidation, exchange or otherwise) and (b)
the date on which there are no Beneficiaries remaining; provided, however, that
this Agreement shall continue to be effective or shall be reinstated, as the
case may be, if at any time any holder of Preferred Securities or any
Beneficiary must restore payment of any sums paid under the Preferred
Securities, under any obligation, under the Guarantee Agreement, dated
-60-
<PAGE>
the date hereof by CTBI and State Street Bank and Trust Company as guarantee
trustee or under this Agreement for any reason whatsoever. This Agreement is
continuing, irrevocable, unconditional and absolute.
1.3 Waiver of Notice. CTBI hereby waives notice of acceptance of this
Agreement and of any obligation to which it applies or may apply, and CTBI
hereby waives presentment, demand for payment, protest, notice of nonpayment,
notice of dishonor, notice of redemption and all other notices and demands.
1.4 No Impairment. The obligations, covenants, agreements and duties of
CTBI under this Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the obligations or for the performance of any other obligation under,
arising gout of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the obligations or any
action on the part of the Trust granting indulgence or extension of any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement composition or readjustment of debt of,
or other similar proceedings affecting, the Trust or any of the assets of the
Trust.
(d) There shall be no obligation of the Beneficiaries to give notice
to, or obtain the consent of, CTBI with respect to the happening of any of the
foregoing.
1.5 Enforcement. A Beneficiary may enforce this Agreement directly
against CTBI, and CTBI waives any right or remedy to require that any action be
brought against the Trust or any other person or entity before proceeding
against CTBI.
2. Section II.
2.1 Binding Effect. All guarantees and agreements contained in this
Agreement shall bind the successors, assigns, receivers, trustees and
representatives of CTBI and shall inure to the benefit of the Beneficiaries.
2.2 Amendment. So long as there remains any Beneficiary or any Preferred
Securities of any series are outstanding, this Agreement shall not be modified
or amended in any manner adverse to such Beneficiary or to the holders of the
Preferred Securities.
2.3 Notices. Any notice, request or other communication required or
permitted to be given hereunder shall be given in writing by delivering the same
by facsimile transmission (confirmed
-61-
<PAGE>
by mail), telex, or by registered or certified mail, addressed as follows (and
if so given, shall be deemed given when mailed or upon receipt of an answer
back, if sent by telex):
CTBI Preferred Capital Trust
c/o Community Trust Bancorp, Inc.
208 Mayo Trail
P.O. Box 2947
Pikeville, Kentucky 41502
Facsimile No.: (606) 437-3366
Attention: Chief Financial Officer
Community Trust Bancorp, Inc.
208 North Mayo Trail
Pikeville, Kentucky 41502
Facsimile No.: (606) 437-3366
Attention: Chief Financial Officer
2.4 Governing Law. Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of Kentucky (without regard
to conflict of laws principles).
THIS AGREEMENT is executed as of the day and year first above written.
Community Trust Bancorp, Inc.
By:_________________________________
Name: Richard M. Levy
Title: Executive Vice President and
Chief Financial Officer
CTBI Preferred Capital Trust
By:_________________________________
Name: Jean R. Hale
Title: Administrative Trustee
-62-
<PAGE>
Exhibit "E"
Certificate Evidencing Preferred Securities
This Preferred Security is a Global Certificate within the meaning of the
Trust Agreement hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York Corporation ("DEPOSITORY TRUST COMPANY") or
a nominee of the DEPOSITORY TRUST COMPANY. This Preferred Security is
exchangeable for Preferred Securities registered in the name of a person other
than the DEPOSITORY TRUST COMPANY or its nominee only in the limited
circumstances described in the Trust Agreement (as defined below) and no
transfer of this Preferred Security (other than a transfer of this Preferred
Security as a whole by the DEPOSITORY TRUST COMPANY to a nominee of the
DEPOSITORY TRUST COMPANY or by a nominee of the DEPOSITORY TRUST COMPANY to the
DEPOSITORY TRUST COMPANY or another nominee of the DEPOSITORY TRUST COMPANY) may
be registered except in limited circumstances.
Unless this Preferred Security is presented by an authorized representative
of the DEPOSITORY TRUST COMPANY to CTBI Preferred Capital Trust or its agent for
registration of transfer, exchange or payment, and any certificate issued is
registered in the name of Cede & Co., or such other name as is requested by an
authorized representative of DEPOSITORY TRUST COMPANY (and any payment hereon is
made to Cede & Co. or to such other entity as is requested by an authorized
representative of DEPOSITORY TRUST COMPANY, ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P -
CUSIP NO. __________________________
-63-
<PAGE>
Certificate Evidencing Cumulative Trust Preferred Securities
of
CTBI Preferred Capital Trust
% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
CTBI Preferred Capital Trust, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that CEDE & CO.
(the "Holder") is the registered owner of One Million, Two Hundred Thousand
(1,200.000) preferred securities of the Trust representing undivided beneficial
interests in the assets of the Trust and designated the _________% Cumulative
Trust Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities"). The Preferred Securities are transferable on the books
and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer as
provided in Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences, and other terms and
provisions of the Preferred Securities are set forth in, and this certificate
and the Preferred Securities represented hereby are issued and shall in all
respects be subject to the terms and provisions of, the Amended and Restated
Trust Agreement of the Trust dated as of ________ ______, 1997, as the same may
be amended from time to time (the "Trust Agreement"), including the designation
of the terms of Preferred Securities as set forth therein. The Holder is
entitled to the benefits of the Preferred Securities Guarantee Agreement entered
into by Community Trust Bancorp, Inc. a Kentucky corporation, and as guarantee
trustee, dated as of _________ _____, 1997 (the "Guarantee"), to the extent
provided therein. The Trust will furnish a copy of the Trust Agreement and the
Guarantee to the Holder without charge upon written request to the Trust at its
principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
In Witness Whereof, one of the Administrative Trustees of the Trust has
executed this certificate this ____ day of ________, 1997.
CTBI Preferred Capital Trust
By:_________________________
Name: Richard M. Levy
Title: Administrative Trustee
-64-
<PAGE>
Exhibit 4.4
-----------------------------------------------------------------------
COMMUNITY TRUST BANCORP, INC.
AND
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
INDENTURE
% SUBORDINATED DEBENTURES
-----------------------------------------------------------------------
, 1997
<PAGE>
TABLE OF CONTENTS
Section Page
1. Definitions............................................................. 2
1.1 Definitions of Terms................................................ 2
2. Issue, Description, Terms, Conditions, Registration And Exchange Of The
Debentures....................................................... 9
2.1 Designation and Principal Amount.................................... 9
2.2 Maturity............................................................ 9
2.3 Form and Payment.................................................... 10
2.4 Interest............................................................ 11
2.5 Execution and Authentications....................................... 11
2.6 Registration of Transfer and Exchange............................... 12
2.7 Temporary Securities................................................ 13
2.8 Mutilated, Destroyed, Lost or Stolen Securities..................... 14
2.9 Cancellation........................................................ 14
2.10 Benefit of Indenture............................................... 15
2.11 Authenticating Agent............................................... 15
3. Redemption Of Debentures................................................ 16
3.1 Redemption.......................................................... 16
3.2 Special Event Redemption............................................ 16
3.3 Optional Redemption by Company...................................... 16
3.4 Notice of Redemption................................................ 17
3.5 Payment Upon Redemption............................................. 18
3.6 No Sinking Fund..................................................... 18
4. Extension of Interest Payment Period.................................... 18
4.1 Extension of Interest Payment Period................................ 19
4.2 Notice of Extension................................................. 19
4.3 Limitation of Transactions.......................................... 20
5. Particular Covenants Of The Company..................................... 20
5.1 Payment of Principal and Interest................................... 20
5.2 Maintenance of Agency............................................... 20
5.3 Paying Agents....................................................... 20
5.4 Appointment to Fill Vacancy in Office of Trustee.................... 22
5.5 Compliance with Consolidation Provisions............................ 22
5.6 Limitation on Dividends; Transactions with Affiliates............... 22
5.7 Covenants as to CTBI Trust.......................................... 22
-i-
<PAGE>
TABLE OF CONTENTS
Section Page
6. Securityholders' Lists And Reports By The Company And The Trustee....... 23
6.1 Company to Furnish Trustee Names and Addresses of Securityholders... 23
6.2 Preservation of Information Communications with Securityholders..... 23
6.3 Reports by the Company.............................................. 23
6.4 Reports by the Trustee.............................................. 24
7. Remedies Of The Trustee And Securityholders On Event Of Default......... 24
7.1 Events of Default................................................... 24
7.2 Collection of Indebtedness and Suits for Enforcement by Trustee..... 26
7.3 Application of Moneys Collected..................................... 28
7.4 Limitation on Suits................................................. 28
7.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver........ 29
7.6 Control by Securityholders.......................................... 29
7.7 Undertaking to Pay Costs............................................ 30
8. Form of Debenture and Original Issue.................................... 30
8.1 Form of Debenture................................................... 30
8.2 Original Issue of Debentures........................................ 30
9. Concerning The Trustee.................................................. 31
9.1 Certain Duties and Responsibilities of Trustee...................... 31
9.2 Notice of Defaults.................................................. 32
9.3 Certain Rights of Trustee........................................... 32
9.4 Trustee Not Responsible for Recitals or Issuance of Securities...... 33
9.5 May Hold Securities................................................. 34
9.6 Monies Held in Trust................................................ 34
9.7 Compensation and Reimbursement...................................... 34
9.8 Reliance on Officers' Certification................................. 34
9.9 Disqualification: Conflicting Interests............................. 35
9.10 Corporate Trustee Required; Eligibility............................ 35
9.11 Resignation and Removal; Appointment of Successor.................. 35
9.12 Acceptance of Appointment by Successor............................. 36
9.13 Merger, Conversion, Consolidation or Succession to Business........ 37
9.14 Preferential Collection of Claims Against the Company.............. 37
10. Concerning The Securityholders......................................... 38
10.1 Evidence of Action by Securityholders.............................. 38
10.2 Proof of Execution by Securityholders.............................. 38
10.3 Who May Be Deemed Owners........................................... 38
10.4 Certain Securities Owned by Company Disregarded.................... 39
-ii-
<PAGE>
TABLE OF CONTENTS
Section Page
10.5 Actions Binding on Future Securityholders........................... 39
11. Supplemental Indentures................................................. 40
11.1 Supplemental Indentures Without the Consent of Security holders..... 40
11.2 Supplement Indentures with Consent of Securityholders............... 41
11.3 Effect of Supplemental Indentures................................... 41
11.4 Securities Affected by Supplemental Indentures...................... 42
11.5 Execution of Supplemental Indentures................................ 42
12. Successor Corporation................................................... 42
12.1 Company May Consolidate, Etc........................................ 42
12.2 Successor Corporation Substituted................................... 43
12.3 Evidence of Consolidation, Etc. to Trustee.......................... 43
13. Satisfaction And Discharge.............................................. 43
13.1 Satisfaction and Discharge of Indenture............................. 43
13.2 Discharge of Obligations............................................ 44
13.3 Deposited Moneys to be Held in Trust................................ 44
13.4 Payment of Monies Held by Paying Agents............................. 44
13.5 Repayment to Company................................................ 45
14. Immunity of Incorporators, Stockholders, Officers And Directors......... 45
14.1 No Recourse......................................................... 45
15. Miscellaneous Provisions................................................ 45
15.1 Effect on Successors and Assigns.................................... 45
15.2 Actions by Successors............................................... 46
15.3 Surrender of Company Powers......................................... 46
15.4 Notices............................................................. 46
15.5 Governing Law....................................................... 46
15.6 Treatment of Debentures as Debt..................................... 46
15.7 Compliance Certificates and Opinions................................ 46
15.8 Payments on Business Days........................................... 47
15.9 Conflict With Trust Indenture Act................................... 47
15.10 Counterparts....................................................... 47
15.11 Severability....................................................... 47
15.12 Assignment......................................................... 47
15.13 Acknowledgment of Rights........................................... 47
16. Subordination Of Securities............................................. 48
-iii-
<PAGE>
TABLE OF CONTENTS
Section Page
16.1 Agreement to Subordinate.............................................. 48
16.2 Default on Senior Debt, Subordinated Debt or Additional
Senior Obligations.................................................. 48
16.3 Liquidation; Dissolution; Bankruptcy.................................. 49
16.4 Subrogation........................................................... 50
16.5 Trustee to Effectuate Subordination................................... 51
16.6 Notice by the Company................................................. 51
16.7 Rights of the Trustee; Holders of Senior Indebtedness................. 52
16.8 Subordination May Not be Impaired..................................... 52
-iv-
<PAGE>
EXHIBITS
Description Exhibit
Form of Face of Debenture.................................................... A
Certificate of Authentication................................................ B
Subordinated Debenture....................................................... C
TRUST INDENTURE ACT
CROSS-REFERENCE TABLE
Section of Trust Indenture
Acts of 1939, Amended Section of Indenture
310(a)......................................................... 9.1
310(b)......................................................... 9.9, 9.10
310(c)......................................................... Not Applicable
311(a)......................................................... 9.14
311(b)......................................................... 9.14
311(c)......................................................... Not Applicable
312(a)......................................................... 6.1, 6.2(a)
312(b)......................................................... 6.2(c)
312(c)......................................................... 6.2(c)
313(a)......................................................... 6.4(a)
313(b)......................................................... 6.4(b)
313(c)......................................................... 6.4(a), 6.4(b)
313(d)......................................................... 6.4(c)
314(a)......................................................... 6.3
314(b)......................................................... Not Applicable
314(c)......................................................... 15.7
314(d)......................................................... Not Applicable
314(e)......................................................... 15.7(b)
314(f)......................................................... Not Applicable
315(a)......................................................... 7.6, 9.1(b), 9.3
315(b)......................................................... 9.2
315(c)......................................................... 9.1
315(d)......................................................... 9.1(b)
315(e)......................................................... 7.7
316(a)......................................................... 7.6, 9.1(b), 9.3
316(b)......................................................... 7.4
316(c)......................................................... 10.1
317(a)......................................................... 7.2
317(b)......................................................... 5.3
318(a)......................................................... 15.9
-v-
<PAGE>
INDENTURE
This Indenture is entered into and effective as of , 1997, by and
between Community Trust Bancorp, Inc. ("Company"), a Kentucky corporation, and
State Street Bank and Trust Company ("Trustee"), Boston, Massachusetts.
Recitals:
A. WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the execution and delivery of this Indenture to provide for the issuance of a
new series of its securities to be known as its ____% Subordinated Debentures
due 2027 (hereinafter referred to as the "Debentures"), the form and substance
of such Debentures and the terms, provisions and conditions thereof to be set
forth as provided in this Indenture;
B. WHEREAS, CTBI Preferred Capital Trust, a Delaware statutory business trust
("CTBI Trust") has offered to the public $_______________ aggregate liquidation
amount of its ____% Cumulative Trust Preferred Securities (the "Preferred
Securities"), representing undivided beneficial interests in the assets of CTBI
Trust and proposes to invest the proceeds from such offering, together with the
proceeds of the issuance and sale by CTBI Trust to the Company of $__________
aggregate liquidation amount of its ____% Trust Common Securities, in
$___________ aggregate principal amount of the Debentures; and
C. WHEREAS, the Company has requested that the Trustee execute and deliver
this Indenture and all requirements necessary to make this Indenture a valid
instrument in accordance with its terms, and to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee, the
valid obligations of the Company, have been performed, and the execution and
delivery of this Indenture has been duly authorized in all respects;
D. WHEREAS, to provide the terms and conditions upon which the Debentures are
to be authenticated, issued and delivered, the Company has duly authorized the
execution of this Indenture; and
E. WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company, in accordance with its terms, have been done.
Agreement:
Now, Therefore, in consideration of the premises and the purchase of the
Securities by the holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the holders of the Securities:
<PAGE>
1. Definitions.
1.1 Definitions of Terms. The terms defined in this Section 1.1 (except as
in this Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section and shall
include the plurals as well as the singular. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939, as amended or
that are by reference in such Act defined in the Securities Act of 1933, as
amended (except as herein otherwise expressly provided or unless the context
otherwise requires), shall have the meanings assigned to such terms in said
Trust Indenture Act and in said Securities Act as in force at the date of the
execution of this instrument.
(a) "Accelerated Maturity Date" means if the Company elects to
accelerate the Maturity Date in accordance with Section 2.2(c), the date
selected by the Company which is prior to the Scheduled Maturity Date, but is
after March 31, 2007.
(b) "Additional Sums" shall have the meaning set forth in Section 2.5.
(c) "Additional Senior Obligations" means all indebtedness of the
Company whether incurred on or prior to the date of this Indenture or thereafter
incurred, for claims in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts and similar arrangements;
provided, however, that Additional Senior Obligations do not include claims in
respect of Senior Debt or Subordinated Debt or obligations which, by their
terms, are expressly stated to be not superior in right of payment to the
Debentures or to rank pari passu in right of payment with the Debentures. For
purposes of this definition, "claim" shall have the meaning assigned thereto in
Section 101(4) of the United States Bankruptcy Code of 1978, as amended.
(d) "Affiliate" means, with respect to a specified Person, (1) any
Person directly or indirectly owning, controlling or holding with power to vote
10% or more of the outstanding voting securities or other ownership interests of
the specified Person, (2) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (3) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (4) a partnership in which the specified Person is a
general partner, (5) any officer or director of the specified Person, and (6) if
the specified Person is an individual, any entity of which the specified Person
is an officer, director or general partner.
(e) "Authenticating Agent" means an authenticating agent with respect
to all or any of the series of Securities appointed with respect to the
Securities by the Trustee pursuant to Section 2.12.
-2-
<PAGE>
(f) "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors.
(g) "Board of Directors" means the Board of Directors of the Company
or any duly authorized committee of such Board.
(h) "Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.
(i) "Business Day" means, with respect to any series of Securities,
any day other than a day on which Federal or State banking institutions in the
Boston, MA are authorized or obligated by law, executive order or regulation to
close or a day on which the Trustee's Corporate Trust Office is closed for
business.
(j) "Capital Event" means that CTBI Trust has received an opinion of
independent counsel experienced in such matters (which may be counsel to the
Company) that the Company cannot or, within 90 days of such opinion, will not be
permitted by the applicable regulatory authorities, due to a change in law,
regulation, policy or guideline or interpretation or application of law or
regulation, policy or guideline, to account for the Preferred Securities as Tier
I Capital under the capital guidelines or policies of the Federal Reserve.
(k) "CTBI Trust" means CTBI Preferred Capital Trust, a Delaware
business trust created for the sole purpose of issuing preferred securities in
connection with the issuance of Securities under this Indenture and holding the
Subordinated Debentures.
(l) "Certificate" means a certificate signed by the principal
executive officer, the principal financial officer or the principal accounting
officer of the Company. The Certificate need not comply with the provisions of
Section 15.7.
(m) "Common Securities" means undivided beneficial interests in the
assets of CTBI Trust which rank pari passu with Preferred Securities issued by
CTBI Trust; provided, however, that upon the occurrence of an Event of Default,
the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
(n) "Common Securities Guarantee" means any guarantee that the Company
may enter into with the Trustee or other Persons that operate directly or
indirectly for the benefit of holders of Common Securities of CTBI Trust.
(o) "Company" means Community Trust Bancorp, Inc., a corporation duly
organized and existing under the laws of the Commonwealth of Kentucky, and,
subject to the provisions of Section 12, shall also include its successors and
assigns.
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(p) "Compounded Interest" shall have the meaning set forth in Section
4.1.
(q) "Corporate Trust Office" means the office of the Trustee at which,
at any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at Two International
Place, 4th Floor, Boston, Massachusetts, 02110, Attention: Corporate Trust
Department.
(r) "Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
(s) "Debentures" means the Subordinated Debentures authenticated and
delivered under this Indenture.
(t) "Debt" means with respect to any Person, whether recourse is to
all or a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person; (iv) every obligation of such Person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of such Person; 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, directly or indirectly, as
obligator or otherwise.
(u) "Default" means any event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
(v) "Deferred Interest" shall have the meaning set forth in Section
4.1.
(w) "Depositary" means, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, The Depository Trust Company, New York, New York, another
clearing agency, or any successor registered as a clearing agency under the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), or other
applicable statute or regulation, which, in each case, shall be designated by
the Company pursuant to this Indenture.
(x) "Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, CTBI Trust is to be dissolved in accordance
with CTBI Trust Agreement and the Debentures held by the Property Trustee are to
be distributed to the holders of CTBI Trust Securities issued by CTBI Trust pro
rata in accordance with the Trust Agreement.
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(y) "Event of Default" means, with respect to the Debentures, any
event specified in Section 7.1, continued for the period of time, if any,
therein designated.
(z) "Extended Interest Payment Period" shall have the meaning set
forth in Section 4.1.
(aa) "Extended Maturity Date" means if the Company elects to extend
the Maturity Date in accordance with Section 2.2(b), the date selected by the
Company which is after the Scheduled Maturity Date but before March 31, 2036.
(bb) "Federal Reserve" means the Board of Governors of the Federal
Reserve System.
(cc) "Global Security" means, with respect to any series of
Securities, a Security executed by the Company and delivered by the Trustee to
the Depositary or pursuant to the Depositary's instruction, all in accordance
with the Indenture, which shall be registered in the name of the Depositary or
its nominee.
(dd) "Governmental Obligations" means securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America, the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America that, in either case, are not
callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on any
such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
(ee) "Herein," "hereof," and "hereunder," and other words of similar
import, refer to this Indenture as a whole and not to any particular Section or
other subdivision.
(ff) "Holder" means a Person in whose name a security is registered
in the Securities Register.
(gg) "Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
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(hh) "Interest Payment Date," when used with respect to any
installment of interest on the Debentures, means the date specified in the
Debenture as the fixed date on which an installment of interest with respect to
the Debentures is due and payable.
(ii) "Investment Company Event" means the receipt by CTBI Trust of an
Opinion of Counsel, rendered by a law firm experienced in such matters, to the
effect that, as a result of the occurrence of a change in law or regulation or a
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority (a "Change in 1940 Act
Law"), CTBI Trust is or will be considered an "investment company" that is
required to be registered under the 1940 Act, which Change in 1940 Act Law
becomes effective on or after the date of original issuance of the Preferred
Securities under the Trust Agreement.
(jj) "Maturity Date" means the date on which the Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Compounded Interest and Additional
Interest, if any.
(kk) "Non Book-Entry Preferred Securities" shall have the meaning set
forth in Section 2.4.
(ll) "Officers' Certificate" means a certificate signed by the
President or a Vice President and by the Treasurer or an Assistant Treasurer or
the Controller or an Assistant Controller or the Secretary or an Assistant
Secretary of the Company that is delivered to the Trustee in accordance with the
terms hereof. Each such certificate shall include the statements provided for in
Section 15.7, if and to the extent required by the provisions thereof.
(mm) "Opinion of Counsel" means an opinion in writing of legal
counsel, who may not be an employee of the Company but may be counsel to the
Company, that is delivered to the Trustee in accordance with the terms hereof.
Each such opinion shall include the statements provided for in Section 15.7, if
and to the extent required by the provisions thereof.
(nn) "Outstanding," when used with reference to the Debentures,
means, subject to the provisions of Section 10.4, as of any particular time, all
Debentures theretofore authenticated and delivered by the Trustee under this
Indenture, except (1) Debentures theretofore cancelled by the Trustee or any
paying agent, or delivered to the Trustee or any paying agent for cancellation
or that have previously been cancelled; (2) Debentures or portions thereof for
the payment or redemption of which moneys or Governmental Obligations in the
necessary amount shall have been deposited in trust with the Trustee or with any
paying agent (other than the Company) or shall have been set aside and
segregated in trust by the Company (if the Company shall act as its own paying
agent); provided, however, that if such Debentures or portions of such
Debentures are to be redeemed prior to the maturity date thereof, notice of such
redemption shall have been given as provided in Section 3, or provision
satisfactory to the Trustee shall have been made for giving such notice; and (3)
Debentures in lieu of or in substitution for which other Debentures shall have
been authenticated and delivered pursuant to the terms of Section 2.9.
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(oo) "Person" means any individual, corporation, partnership, joint-
venture, joint-stock company, unincorporated organization or government or any
agency or political subdivision thereof.
(pp) "Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt and as that
evidenced by such particular Security; and, for the purposes of this definition,
any Security authenticated and delivered under Section 2.9 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
(qq) "Preferred Securities" means undivided beneficial interests in
the assets of CTBI Trust which rank pari passu with Common Securities issued by
CTBI Trust; provided, however, that upon the occurrence of an Event of Default,
the rights of holders of Common Securities to payment in respect of
distributions and payments upon liquidation, redemption and otherwise are
subordinated to the rights of holders of Preferred Securities.
(rr) "Preferred Securities Guarantee" means any guarantee that the
Company may enter into with State Street Bank and Trust Company or other Persons
that operate directly or indirectly for the benefit of holders of Preferred
Securities of CTBI Trust.
(ss) "Property Trustee" has the meaning set forth in CTBI Trust
Agreement of CTBI Trust.
(tt) "Responsible Officer" when used with respect to the Trustee
means the Chairman of the Board of Directors, the President, any Vice President,
the Secretary, the Treasurer, any trust officer, any corporate trust officer or
any other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the Persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of and familiarity with the particular subject.
(uu) "Scheduled Maturity Date" means March 31, 2027.
(vv) "Securities" means any Debentures.
(ww) "Securityholder," "holder of securities," "registered holder,"
or other similar term, means the Person or Persons in whose name or names a
particular Security shall be registered on the books of the Company kept for
that purpose in accordance with the terms of this Indenture.
(xx) "Senior Debt" means the principal of (and premium, if any) and
interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
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incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior in right of payment to the Debentures or to other Debt which is pari
passu with, or subordinated to, the Debentures; provided, however, that Senior
Debt shall not be deemed to include (i) any Debt of the Company which when
incurred and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, without recourse to the Company,
(ii) any Debt of the Company to any of its subsidiaries, (iii) Debt to any
employee of the Company, (iv) debt which by its terms is subordinated to trade
accounts payable or accrued liabilities arising in the ordinary course of
business to the extent that payments made to the holders of such Debt by the
holders of the Debentures as a result of the subordination provisions of this
Indenture would be greater than they otherwise would have been as a result of
any obligation of such holders to pay amounts over to the obligees on such trade
accounts payable or accrued liabilities arising in the ordinary course of
business as a result of subordination provisions to which such Debt is subject;
(v) Debt which constitutes Subordinated Debt, and (vi) any other debt securities
issued pursuant to this Indenture.
(yy) "Special Event" means a Tax Event, an Investment Company Event or
a Capital Event.
(zz) "Subordinated Debt" means the principal of (and premium, if any)
and interest, if any (including interest accruing on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company whether or
not such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Indenture or thereafter
incurred, which is by its terms expressly provided to be junior and subordinate
to other Debt of the Company (other than the Debentures).
(aaa) "Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of whose outstanding Voting Stock shall at the
time be owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of
whose outstanding partnership or similar interests shall at the time be owned by
such Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries and (iii) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
(bbb) "Tax Event" means the receipt by CTBI Trust of an Opinion of
Counsel experienced in such matters to the effect that, as a result of any
amendment to, or change (including any announced prospective change) in, the
laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Debentures under this Indenture, there is more than an insubstantial risk
that (1) CTBI Trust is, or will be within 90 days after the date of such Opinion
of Counsel, subject to United States federal income tax with respect to interest
received or accrued on the Debentures, (2) interest payable by the Company on
the Debentures is not, or within 90 days after the date of such Opinion of
Counsel, will not be, deductible by the Company,
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in whole or in part, for United States federal income tax purposes, or (3) CTBI
Trust is, or will be within 90 days after the date of such Opinion of Counsel,
subject to more than a de minimis amount of other taxes, duties, assessments or
other governmental charges.
(ccc) "Trust Agreement" means the Amended and Restated Trust
Agreement, dated __________ __, 1997, of CTBI Trust.
(ddd) "Trustee" means State Street Bank and Trust Company and,
subject to the provisions of Section 9, shall also include its successors and
assigns, and, if at any time there is more than one Person acting in such
capacity hereunder, "Trustee" shall mean each such Person. The term "Trustee" as
used with respect to a particular series of the Securities shall mean the
trustee with respect to that series.
(eee) "Trust Indenture Act," means CTBI Trust Indenture Act of 1939,
subject to the provisions of Sections 11.1, 11.2, and 12.1, as in effect at the
date of execution of this instrument.
(fff) "Trust Securities" means Common Securities and Preferred
Securities of CTBI Trust.
(ggg) "Voting Stock," as applied to stock of any Person, means
shares, interests, participations or other equivalents in the equity interest
(however designated) in such Person having ordinary voting power for the
election of a majority of the directors (or the equivalent) of such Person,
other than shares, interests, participations or other equivalents having such
power only by reason of the occurrence of a contingency.
2. ISSUE, DESCRIPTION, TERMS, CONDITIONS REGISTRATION AND EXCHANGE OF THE
DEBENTURES.
2.1 Designation and Principal Amount. There is hereby authorized a series
of Securities designated the "____% Subordinated Debentures due 2027", limited
in aggregate principal amount to $__________ which amount shall be as set forth
in any written order of the Company for the authentication and delivery of
Debentures pursuant to Section 8.2 of this Indenture.
2.2 Maturity.
(a) The Maturity Date will be either:
(1) the Scheduled Maturity Date; or
(2) if the Company elects to extend the Maturity Date beyond the
Scheduled Maturity Date in accordance with Section 2.2(b), the Extended
Maturity Date; or
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(3) if the Company elects to accelerate the Maturity Date to be
prior a date to the Scheduled Maturity Date in accordance with Section
2.2(c), the Accelerated Maturity Date.
(b) The Company may at any time before the day which is 90 days
before the Scheduled Maturity Date, elect to extend the Maturity Date only once
to the Extended Maturity Date provided that the Company has received the prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve and further provided that the
following conditions in this Section 2.2(b) are satisfied both at the date the
Company gives notice in accordance with Section 2.2(d) of its election to extend
the Maturity Date and at the Scheduled Maturity Date:
(1) the Company is not in bankruptcy, otherwise insolvent or in
liquidation;
(2) the Company is not in default in the payment of any interest
or principal on the Debentures; and
(3) CTBI Trust is not in arrears on payments of Distributions on
the Preferred Securities issued by it and no deferred Distributions are
accumulated.
(c) The Company may at any time before the day which is 90 days
before the Scheduled Maturity Date and after March 31, 2027, elect to shorten
the Maturity Date only once to the Accelerated Maturity Date provided that the
Company has received the prior approval of the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve.
(d) If the Company elects to extend the Maturity Date in accordance
with Section 2.2(b), the Company shall give notice to registered holders of the
Debentures, the Property Trustee and CTBI Trust of the extension of the Maturity
Date and the Extended Maturity Date at least 90 days and no more than 180 days
before the Scheduled Maturity Date.
(e) If the Company elects to accelerate the Maturity Date in
accordance with Section 2.2(c), the Company shall give notice to registered
holders of the Debentures, the Property Trustee and CTBI Trust of the
acceleration of the Maturity Date and the Accelerated Maturity Date at least 90
days and no more than 180 days before the Accelerated Maturity Date.
2.3 Form and Payment. The Debentures shall be issued in fully registered
certificated form without interest coupons. Principal and interest on the
Debentures issued in certificated form shall be payable, the transfer of such
Debentures shall be registrable and such Debentures shall be exchangeable for
Debentures bearing identical terms and provisions at the office or agency of the
Trustee; provided, however, that payment of interest may be made at the option
of the Company by check mailed to the holder at such address as shall appear in
the Debenture Register or by wire transfer to an account maintained by the
holder as specified in the Debenture Register, provided that the holder provides
proper transfer instructions by the regular record date. Notwithstanding
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the foregoing, so long as the holder of any Debentures is the Property Trustee,
the payment of the principal of and interest (including Compounded Interest and
Additional Interest, if any) on such Debentures held by the Property Trustee
shall be made at such place and to such account as may be designated by the
Property Trustee.
2.4 Global Debenture
(a) In connection with a Dissolution Event,
(1) the Debentures in certificated form may be presented to the
Trustee by the Property Trustee in exchange for a Global Debenture to be
registered in the name of the Depositary, or its nominee, and delivered by the
Trustee to the Depositary for crediting to the accounts of its participants
pursuant to the instructions of the Administrative Trustees. The Company upon
any such presentation shall execute a Global Debenture in such aggregate
principal amount and deliver the same to the Trustee for authentication and
delivery in accordance with this Indenture. Payments on the Debentures issued as
a Global Debenture will be made to the Depositary; and
(2) if any Preferred Securities are held in non book-entry
certificated form, the Debentures in certified form may be presented to the
Trustee by the Property Trustee and any Preferred Security Certificate which
represents Preferred Securities other than Preferred Securities held by the
Clearing Agency or its nominee ("Non Book-Entry Preferred Securities") will be
deemed to represent beneficial interests in Debentures presented to the Trustee
by the Property Trustee having an aggregate principal amount equal to the
aggregate liquidation amount of the Non Book-Entry Preferred Securities until
such Preferred Security Certificates are presented to the Security Registrar for
transfer or reissuance at which time such Preferred Security Certificates will
be canceled and a Debenture, registered in the name of the holder of the
Preferred Security Certificate or the transferee of the holder of such Preferred
Security Certificate, as the case may be, with an aggregate principal amount
equal to the aggregate liquidation amount of the Preferred Security Certificate
canceled, will be executed by the Company and delivered to the Trustee for
authentication and delivery in accordance with this Indenture. On issue of such
Debentures, Debentures with an equivalent aggregate principal amount that were
presented by the Property Trustee to the Trustee will be deemed to have been
canceled.
(b) A Global Debenture may be transferred, in whole but not in part,
only to another nominee of the Depositary, or to a successor Depositary selected
or approved by the Company or to a nominee of such successor Depositary.
(c) If at any time (i) the Depositary notifies the Company that it is
unwilling or unable to continue as Depositary or if at any time the Depositary
for the Debentures shall no longer be registered or in good standing under the
Securities Exchange Act of 1934, as amended, or other applicable statute or
regulation, and a successor Depositary for the Debentures is not appointed by
the Company within 90 days after the Company receives such notice or becomes
aware of such condition, as the case may be, or (ii) there shall have occurred
and be continuing an Event of Default with respect to a Global Debenture, then
the Company will execute, and the Trustee, upon written notice from the Company,
will authenticate and deliver the Debentures in definitive registered form
without coupons, and in an aggregate principal amount equal to the principal
amount of the Global Debenture in exchange for such Global Debenture. In
addition, the Company may at any time in its sole discretion determine that the
Debentures shall no longer be represented by a Global Debenture. In such event
the Company will execute, and the Trustee, upon receipt of an Officer's
Certificate evidencing such determination by the Company, will authenticate and
deliver the Debentures in definitive registered form without coupons, and in an
aggregate principal amount equal to the principal amount of the Global Debenture
in exchange for such Global Debenture. Upon the exchange of the Global Debenture
for such Debentures in definitive registered form without coupons, in authorized
denominations, the Global Debenture shall be canceled by the Trustee. Such
Debentures in definitive registered form issued in exchange for the Global
Debenture shall be registered in such names as the Depositary, pursuant to
written instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee. The Trustee shall deliver such Securities to the
Depositary for delivery to the Persons in whose names such Securities are so
registered.
2.5 Interest.
(a) Each Debenture shall bear interest at the rate of 9.25% per annum
(the "Coupon Rate") from the original date of issuance until the principal
thereof becomes due and payable, and on any overdue principal and (to the extent
that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears on March
31, June 30, September 30 and December 31 of each year (each, an "Interest
Payment Date," commencing on March 31, 1997), to the Person in whose name such
Debenture or any Predecessor Debentures is registered, at the close of business
on the regular record date for such interest installment, which shall be the
fifteenth day of the last month of the calendar quarter.
(b) The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in such a 30-day period. In the event
that any date on which interest is payable on the Debentures is not a Business
Day, then payment of interest payable on such date will be made on the next
succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if made
on the date such payment was originally payable.
(c) If, at any time while the Property Trustee is the Holder of any
Debentures, CTBI Trust or the Property Trustee is required to pay any taxes,
duties, assessments or other governmental charges of whatever nature (other than
withholding taxes) imposed by the United States, or any other taxing authority,
then, in any case, the Company will pay as additional interest ("Additional
Sums") on the Debentures held by the Property Trustee, such additional amounts
as shall be required so that the net amounts received and retained by CTBI Trust
and the Property Trustee after paying such taxes, duties, assessments or other
governmental charges will be equal to the amounts CTBI Trust and the Property
Trustee would have received had no such taxes, duties, assessments or other
government charges been imposed.
2.6 Execution and Authentications.
(a) The Debentures shall be signed on behalf of the Company by its
President or one of its Vice Presidents, under its corporate seal attested by
its Secretary or one of its Assistant Secretaries. Signatures may be in the form
of a manual or facsimile signature. The Company may use the facsimile signature
of any Person who shall have been a President or Vice President
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thereof, or of any Person who shall have been a Secretary or Assistant Secretary
thereof, notwithstanding the fact that at the time the Securities shall be
authenticated and delivered or disposed of such Person shall have ceased to be
the President or a Vice President, or the Secretary or an Assistant Secretary,
of the Company. The seal of the Company may be in the form of a facsimile of
such seal and may be impressed, affixed, imprinted or otherwise reproduced on
the Securities. The Securities may contain such notations, legends or
endorsements required by law, stock exchange rule or usage. Each Security shall
be dated the date of its authentication by the Trustee.
(b) A Security shall not be valid until authenticated manually by an
authorized signatory of the Trustee, or by an Authenticating Agent. Such
signature shall be conclusive evidence that the Security so authenticated has
been duly authenticated and delivered hereunder and that the holder is entitled
to the benefits of this Indenture.
(c) At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
written order of the Company for the authentication and delivery of such
Securities, signed by its President or any Vice President and its Treasurer or
any Assistant Treasurer, and the Trustee in accordance with such written order
shall authenticate and deliver such Securities.
(d) In authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to Section 9.1) shall be
fully protected in relying upon, an Opinion of Counsel stating that the form and
terms thereof have been established in conformity with the provisions of this
Indenture.
(e) The Trustee shall not be required to authenticate such Securities
if the issue of such Securities pursuant to this Indenture will affect the
Trustee's own rights, duties or immunities under the Securities and this
Indenture or otherwise in a manner that is not reasonably acceptable to the
Trustee.
2.7 Registration of Transfer and Exchange.
(a) Securities may be exchanged upon presentation thereof at the
office of the Security Registrar and, in the event the Subordinated Debentures
are distributed to the Preferred Security Holders, or office or agency of
the Company designated for such purpose in the Borough of Manhattan, the City
and State of New York, or at the office of the Security Registrar, for other
Securities and for a like aggregate principal amount, upon payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
all as provided in this Section. In respect of any Securities so surrendered for
exchange, the Company shall execute, the Trustee shall authenticate and such
office or agency shall deliver in exchange therefor the Security or Securities
that the Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
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(b) The Company shall keep, or cause to be kept, at its office or
agency designated for such purpose, or at the office of the Security Registrar,
or such other location designated by the Company a register or registers (herein
referred to as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall register the Securities and
the transfers of Securities as in this Section provided and which at all
reasonable times shall be open for inspection by the Trustee. The registrar for
the purpose of registering Securities and transfer of Securities as herein
provided shall initially be the Trustee and thereafter as may be appointed by
the Company as authorized by Board Resolution (the "Security Registrar").
(c) Upon surrender for transfer of any Security at the office or
agency of the Company designated for such purpose, the Company shall execute,
the Trustee shall authenticate and such office or agency shall deliver in the
name of the transferee or transferees a new Security or Securities for a like
aggregate principal amount.
(d) All Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be accompanied (if
so required by the Company or the Security Registrar) by a written instrument or
instruments of transfer, in form satisfactory to the Company or the Security
Registrar, duly executed by the registered holder or by such holder's duly
authorized attorney in writing.
(e) No service charge shall be made for any exchange or registration
of transfer of Securities, or issue of new Securities in case of partial
redemption of any series, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge in relation thereto,
other than exchanges pursuant to Section 2.8, the second paragraph of Section
3.5 and Section 11.4 not involving any transfer.
(f) The Company shall not be required (i) to issue, exchange or
register the transfer of any Securities during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
less than all the Outstanding Securities and ending at the close of business on
the day of such mailing, nor (ii) to register the transfer of or exchange any
Securities or portions thereof called for redemption. The provisions of this
Section 2.7 are, with respect to any Global Security, subject to Section 2.4
hereof.
2.8 Temporary Securities. Pending the preparation of definitive
Securities, the Company may execute, and the Trustee shall authenticate and
deliver, temporary Securities (printed, lithographed, or typewritten). Such
temporary Securities shall be substantially in the form of the definitive
Securities in lieu of which they are issued, but with such omissions, insertions
and variations as may be appropriate for temporary Securities, all as may be
determined by the Company. Every temporary Security shall be executed by the
Company 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 unnecessary delay the Company will execute and will furnish
definitive Securities and thereupon any or all temporary Securities may be
surrendered in
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exchange therefor (without charge to the holders), at the office of the Security
Registrar and the Trustee shall authenticate and such office or agency shall
deliver in exchange for such temporary Securities an equal aggregate principal
amount of definitive Securities, unless the Company advises the Trustee to the
effect that definitive Securities need not be executed and furnished until
further notice from the Company. Until so exchanged, the temporary Securities
shall be entitled to the same benefits under this Indenture as definitive
Securities authenticated and delivered hereunder.
2.9 Mutilated, Destroyed, Lost or Stolen Securities.
(a) In case any temporary or definitive Security shall become
mutilated or be destroyed, lost or stolen, the Company (subject to the next
succeeding sentence) shall execute, and upon the Company's request the Trustee
(subject as aforesaid) shall authenticate and deliver, a new Security of the
same series, bearing a number not contemporaneously outstanding, in exchange and
substitution for the mutilated Security, or in lieu of and in substitution for
the Security so destroyed, lost or stolen. In every case the applicant for a
substituted Security shall furnish to the Company and the Trustee such security
or indemnity as may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee evidence to their satisfaction of the destruction,
loss or theft of the applicant's Security and of the ownership thereof. The
Trust may authenticate any such substituted Security and deliver the same upon
the written request or authorization of its President or any Vice President and
its Treasurer or any assistant Treasurer of the Company. Upon the issuance of
any substituted Security, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trust) connected therewith. In case any Security that has matured or is about
to mature shall become mutilated or be destroyed, lost or stolen, the Company
may, instead of issuing a substitute Security, pay or authorize the payment of
the same (without surrender thereof except in the case of a mutilated Security)
if the applicant for such payment shall furnish to the Company and the Trustee
such security or indemnity as they may require to save them harmless, and, in
case of destruction, loss or theft, evidence to the satisfaction of the Company
and the Trustee of the destruction, loss or theft of such Security and of the
ownership thereof.
(b) Every replacement Security issued pursuant to the provisions of
this Section shall constitute an additional contractual obligation of the
Company whether or not the mutilated, destroyed, lost or stolen Security shall
be found at any time, or be enforceable by anyone, and shall be entitled to all
the benefits of this Indenture equally and proportionately with any and all
other Securities of the same series duly issued hereunder. All Securities shall
be held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities, and shall preclude (to the extent lawful) any and all
other rights or remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
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2.10 Cancellation. All Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer shall, if surrendered to the
Company or any paying agent, be delivered to the Trustee for cancellation, or,
if surrendered to the Trustee, shall be cancelled by it, and no Securities shall
be issued in lieu thereof except as expressly required or permitted by any of
the provisions of this Indenture. On request of the Company at the time of such
surrender, the Trustee shall deliver to the Company cancelled Securities held by
the Trustee. In the absence of such request the Trustee may dispose of cancelled
Securities in accordance with its standard procedures and deliver a certificate
of disposition to the Company. If the Company shall otherwise acquire any of the
Securities, however, such acquisition shall not operate as a redemption or
satisfaction of the Indebtedness represented by such Securities unless and until
the same are delivered to the Trustee for cancellation.
2.11 Benefit of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give or be construed to give to any
Person, other than the parties hereto and the holders of the Securities (and,
with respect to the provisions of Section 16, the holders of Senior
Indebtedness) any legal or equitable right, remedy or claim under or in respect
of this Indenture, or under any covenant, condition or provision herein
contained; all such covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the holders of the Securities (and, with
respect to the provisions of Section 16, the holders of Senior Indebtedness).
2.12 Authenticating Agent.
(a) So long as any of the Securities remain outstanding there may be
an Authenticating Agent for the Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized to act on behalf
of the Trustee to authenticate the Securities issued upon exchange, transfer or
partial redemption thereof, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. All references in this
Indenture to the authentication of Securities by the Trustee shall be deemed to
include authentication by an Authenticating Agent for such series. Each
Authenticating Agent shall be acceptable to the Company and shall be a
corporation that has a combined capital and surplus, as most recently reported
or determined by it, sufficient under the laws of any jurisdiction under which
it is organized or in which it is doing business to conduct a trust business,
and that is otherwise authorized under such laws to conduct such business and is
subject to supervision or examination by Federal or State authorities. If at any
time any Authenticating Agent shall cease to be eligible in accordance with
these provisions, it shall resign immediately.
(b) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The trustee may at any
time (and upon request by the Company shall) terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and to the Company. Upon resignation, termination or
cessation of eligibility of any Authenticating Agent, the Trustee may appoint an
eligible successor Authenticating Agent acceptable to the Company. Any successor
Authenticating Agent,
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upon acceptance of its appointment hereunder, shall become vested with all the
rights, powers and duties of its predecessor hereunder as if originally named as
an Authenticating Agent pursuant hereto.
3. Redemption Of Debentures.
3.1 Redemption. Subject to the Company having received prior approval of
the Federal Reserve, if then required under the applicable capital guidelines or
policies of the Federal Reserve, the Company may redeem the Debentures issued
hereunder on and after the dates and in accordance with the terms established
pursuant to this Section 3.
3.2 Special Event Redemption. Subject to the Company having received the
prior approval of the Federal Reserve, if then required under the applicable
capital guidelines or policies of the Federal Reserve, if a Special Event has
occurred and is continuing, then, notwithstanding Section 3.3(a) but subject to
Section 3.3(b), the Company shall have the right upon not less than 30 days nor
more than 60 days notice to the Holders of the Debentures to redeem the
Debentures, in whole but not in part, for cash within 90 days following the
occurrence of such Special Event (the"90-Day Period") at a redemption price
equal to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company the opportunity
to eliminate, within the 90-Day Period, the Tax Event by taking some ministerial
action ("Ministerial Action"), such as filing a form or making an election, or
pursuing some other similar reasonable measure which has no adverse effect on
the Company, CTBI Trust or the Holders of CTBI Trust Securities issued by CTBI
Trust, the Company shall pursue such Ministerial Action in lieu of redemption,
and, provided, further, that the Company shall have no right to redeem the
Debentures while CTBI Trust is pursuing any Ministerial Action pursuant to its
obligations under the Trust Agreement. The Redemption Price shall be paid prior
to 12:00 noon, New York time, on the date of such redemption or such earlier
time as the Company determines, provided that the Company shall deposit with the
Trustee an amount sufficient to pay the Redemption Price by 10:00 a.m., New York
time, on the date such Redemption Price is to be paid.
3.3 Optional Redemption by Company.
(a) Subject to the provisions of Section 3.3(b), except as otherwise
may be specified in this Indenture, the Company shall have the right to redeem
the Debentures, in whole or in part, from time to time, on or after March 31,
2027, at a redemption price equal to the Redemption Price. Any redemption
pursuant to this paragraph will be made upon not less than 30 days nor more than
60 days notice to the Holder of the Debentures, at the Redemption Price. If the
Debentures are only partially redeemed pursuant to this Section 3.3, the
Debentures will be redeemed pro rata or by lot or by any other manner the
Trustee shall deem appropriate in its discretion; provided, that if at the time
of redemption the Debentures are registered as a Global Debenture, the
Depositary shall determine, in accordance with its procedures, the principal
amount of such Debentures held by each Holder of Debentures to be redeemed. The
Redemption
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Price shall be paid prior to 12:00 noon, New York time, on the date of such
redemption or at such earlier time as the Company determines provided that the
Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 10:00 a.m., New York time, on the date such Redemption Price
is to be paid.
(b) If a partial redemption of the Debentures would result in the
delisting of the Preferred Securities issued by CTBI Trust from The Nasdaq Stock
Market's National Market or any national securities exchange or other
organization on which the Preferred Securities are then listed, the Company
shall not be permitted to effect such partial redemption and may only redeem the
Debentures in whole.
3.4 Notice of Redemption.
(a) In case the Company shall desire to exercise such right to redeem
all or, as the case may be, a portion of the Debentures in accordance with the
right reserved so to do, the Company shall, or shall cause the Trustee to upon
receipt of 45 days prior written notice from the Company (which notice shall, in
the event of a Partial Redemption, include a representation to the effect that
such Partial Redemption will not result in the delisting of the Preferred
Securities as described in Section 3.3(b) above), give notice of such redemption
to holders of the Debentures to be redeemed by mailing, first class postage
prepaid, a notice of such redemption not less than 30 days and not more than 60
days before the date fixed for redemption to such holders at their last
addresses as they shall appear upon the Security Register unless a shorter
period is specified in the Debentures to be redeemed. Any notice that is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the registered holder receives the notice. In any case,
failure duly to give such notice to the holder of any Security designated for
redemption in whole or in part, or any defect in the notice, shall not affect
the validity of the proceedings for the redemption of any other Debentures. In
the case of any redemption of Debentures prior to the expiration of any
restriction on such redemption provided in the terms of such Debentures or
elsewhere in this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with any such restriction.
(b) Each such notice of redemption shall specify the date fixed for
redemption and the redemption price at which Debentures of that series are to be
redeemed, and shall state that payment of the redemption price of such
Debentures to be redeemed will be made at the office or agency of the Company or
at the office of the Securities Registrar upon presentation and surrender of
such Debentures, that interest accrued to the date fixed for redemption will be
paid as specified in said notice, that from and after said date interest will
cease to accrue. If less than all the Debentures of a series are to be redeemed,
the notice to the holders of Debentures of that series to be redeemed in whole
or in part shall specify the particular Debentures to be so redeemed. In case
any Security is to be redeemed in part only, the notice that relates to such
Security shall state the portion of the principal amount thereof to be redeemed,
and shall state that on and after the redemption date, upon surrender of such
Security, a new Security or Debentures of such series in principal amount equal
to the unredeemed portion thereof.
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(c) If less than all the Debentures are to be redeemed, the Company
shall give the Trustee at least 45 days' notice in advance of the date fixed for
redemption as to the aggregate principal amount of the Debentures to be
redeemed, and thereupon the Trustee shall select, by lot or in such other manner
as it shall deem appropriate and fair in its discretion and that may provide for
the selection of a portion or portions (equal to twenty-five U.S. dollars ($25)
or any integral multiple thereof) of the principal amount of such Debentures of
a denomination larger than $25, the Debentures to be redeemed and shall
thereafter promptly notify the Company in writing of the numbers of the
Debentures to be redeemed, in whole or in part.
(d) The Company may, if and whenever it shall so elect, by delivery of
instructions signed on its behalf by its President or any Vice President,
instruct the Trustee or any paying agent to call all or any part of the
Debentures of a particular series for redemption and to give notice of
redemption in the manner set forth in this Section, such notice to be in the
name of the Company or its own name as the Trustee or such paying agent may deem
advisable. In any case in which notice of redemption is to be given by the
Trustee or any such paying agent, the Company shall deliver or cause to be
delivered to, or permit to remain with, the Trustee or such paying agent, as the
case may be, such Security Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the Trustee or such
paying agent to give any notice by mail that may be required under the
provisions of this Section.
3.5 Payment Upon Redemption.
(a) If the giving of notice of redemption shall have been completed as
above provided, the Debentures or portions of Debentures to be redeemed
specified in such notice shall become due and payable on the date and at the
place stated in such notice at the applicable Redemption Price and interest on
such Debentures or portions of Debentures shall cease to accrue on and after the
date fixed for redemption, unless the Company shall default in the payment of
such Redemption Price with respect to any such Security or portion thereof. On
presentation and surrender of such Debentures on or after the date fixed for
redemption at the place of payment specified in the notice, said Debentures
shall be paid and redeemed at the applicable Redemption Price, together with
interest accrued thereon to the date fixed for redemption (but if the date fixed
for redemption is an interest payment date, the interest installment payable on
such date shall be payable to the registered holder at the close of business on
the applicable record date pursuant to Section 3.3).
(b) Upon presentation of any Debenture that is to be redeemed in part
only, the Company shall execute and the Trustee shall authenticate and the
office or agency where the Security is presented shall deliver to the holder
thereof, at the expense of the Company, a new Security or Debentures of
authorized denomination in principal amount equal to the unredeemed portion of
the Security so presented.
3.6 No Sinking Fund. The Debentures are not entitled to the benefit of any
sinking fund.
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4. Extension of Interest Payment Period.
4.1 Extension of Interest Payment Period. So long as no Event of Default
has occurred and is continuing, the Company shall have the right, at any time
and from time to time during the term of the Debentures, to defer payments of
interest by extending the interest payment period of such Debentures for a
period not exceeding 20 consecutive quarters (each such period an "Extended
Interest Payment Period"), during which Extended Interest Payment Period no
interest shall be due and payable; provided that no Extended Interest Payment
Period may extend beyond the Maturity Date. To the extent permitted by
applicable law, interest, the payment of which has been deferred because of the
extension of the interest payment period pursuant to this Section 4.1, will bear
interest thereon at the Coupon Rate compounded quarterly for each quarter of the
Extended Interest Payment Period ("Compounded Interest"). At the end of the
Extended Interest Payment Period, the Company shall calculate (and deliver such
calculation to the Trustee) and pay all interest accrued and unpaid on the
Debentures, including any Additional Interest and Compounded Interest (together,
"Deferred Interest") that shall be payable to the Holders of the Debentures in
whose names the Debentures are registered in the Security Register on the first
record date after the end of the Extended Interest Payment Period. Before the
termination of any Extended Interest Payment Period, the Company may further
extend such period, provided that such period together with all such further
extensions thereof shall not exceed 20 consecutive quarters, or extend beyond
the Maturity Date of the Debentures. Upon the termination of any Extended
Interest Payment Period and upon the payment of all Deferred Interest then due,
the Company may commence a new Extended Interest Payment Period, subject to the
foregoing requirements. No interest shall be due and payable during an Extended
Interest Payment Period, except at the end thereof, but the Company may prepay
at any time all or any portion of the interest accrued during an Extended
Interest Payment Period.
4.2 Notice of Extension.
(a) If the Property Trustee is the only registered Holder of the
Debentures at the time the Company selects an Extended Interest Payment Period,
the Company shall give written notice to the Administrative Trustees, the
Property Trustee and the Trustee of its selection of such Extended Interest
Payment Period two Business Days before the earlier of (i) the next succeeding
date on which Distributions on CTBI Trust Securities issued by CTBI Trust are
payable, or (ii) the date CTBI Trust is required to give notice of the record
date, or the date such Distributions are payable, to the NASDAQ National Market
or other applicable self-regulatory organization or to holders of the Preferred
Securities issued by CTBI Trust, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only Holder of the Debentures
at the time the Company selects an Extended Interest Payment Period, the Company
shall give the Holders of the Debentures and the Trustee written notice of its
selection of such Extended Interest Payment Period at least two Business Days
before the earlier of (i) the next succeeding Interest Payment Date, or (ii) the
date the Company is required to give notice of the record or payment date of
such
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interest payment to the NASDAQ National Market or other applicable self-
regulatory organization or to Holders of the Debentures.
(c) The quarter in which any notice is given pursuant to paragraphs
(a) or (b) of this Section 4.2 shall be counted as one of the 20 quarters
permitted in the maximum Extended Interest Payment Period permitted under
Section 4.1.
4.3 Limitation of Transactions. If (i) the Company shall exercise its right
to defer payment of interest as provided in Section 4.1, or (ii) there shall
have occurred any Event of Default, as defined in the Indenture, then (a) the
Company shall not declare or pay any dividend on, make any distributions with
respect to, or redeem, purchase, acquire or make a liquidation payment with
respect to, any of its capital stock or (b) the Company shall not make any
payment of interest, principal or premium, if any, on or repay, repurchase or
redeem any debt securities issued by the Company which rank pari passu with or
junior to the Debentures; (other than (i) purchases or acquisitions of shares of
its common stock in connection with the satisfaction by the Company of its
obligations under any employee benefit plans or the satisfaction by the Company
of its obligations pursuant to any contract or security requiring the Company to
purchase shares of its common stock, (ii) the purchase of fractional interests
in shares of its capital stock pursuant to the conversion or exchange provisions
of such capital stock or security being converted or exchanged, (iii) payments
under the Preferred Securities Guarantee, (iv) dividends or distributions in
common stock of the Company, or (v) any declaration of a dividend in connection
with the implementation of a shareholders' rights plan, or the issuance of stock
under any such plan in the future or the redemption or repurchase or any such
rights pursuant thereto).
5. Particular Covenants Of The Company.
5.1 Payment of Principal and Interest. The Company will duly and punctually
pay or cause to be paid the principal of and interest on the Debentures at the
time and place and in the manner provided herein and established with respect to
such Debentures.
5.2 Maintenance of Agency. So long as any of the Securities remain
Outstanding, the Company agrees to maintain an office or agency in the City of
Pikeville, Kentucky, or at the office of the Property Trustee, where (i)
Securities may be presented for payment, (ii) Securities may be presented as
hereinabove authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be given or served, such designation to continue with respect to
such office or agency until the Company shall, by written notice signed by its
President or a Vice President and delivered to the Trustee, designate some other
office or agency for such purposes or any of them. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
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5.3 Paying Agents.
(a) The Company appoints the Trustee as the Paying Agent. If the
Company shall appoint one or more paying agents for all of the Securities, other
than the Trustee, the Company will cause each 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:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on the
Securities (whether such sums have been paid to it by the Company or by any
other obligor of such Securities) in trust for the benefit of the Persons
entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor of such Securities) to make any payment of
the principal of (and premium, if any) or interest on the Securities when
the same shall be due and payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(ii) above, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with respect to
the Securities, it will on or before each due date of the principal of (and
premium, if any) or interest on Securities, set aside, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
such principal (and premium, if any) or interest so becoming due on Securities
of that series until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such Securities) to take
such action. Whenever the Company shall have one or more paying agents for any
of the Securities, it will, prior to each due date of the principal of (and
premium, if any) or interest on any Securities, deposit with the paying agent a
sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium or interest, and (unless such paying agent
is the Trustee) the Company will promptly notify the Trustee of this action or
failure so to act.
(c) Notwithstanding anything in this Section to the contrary, (i) the
agreement to hold sums in trust as provided in this Section is subject to the
provisions of Section 13.5, and (ii) the Company may at any time, for the
purpose of obtaining the satisfaction and discharge of this Indenture or for any
other purpose, pay, or direct any paying agent to pay, to the Trustee all sums
held in trust by the Company or such paying agent, such sums to be held by the
Trustee upon the same terms and conditions as those upon which such sums were
held by the Company or such
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paying agent; and, upon such payment by any paying agent to the Trustee, such
paying agent shall be released from all further liability with respect to such
money.
5.4 Appointment to Fill Vacancy in Office of Trustee. The Company, whenever
necessary to avoid or fill a vacancy in the office of Trustee, will appoint, in
the manner provided in Section 9.10, a Trustee, so that there shall at all times
be a Trustee hereunder.
5.5 Compliance with Consolidation Provisions . The Company will not, while
any of the Securities remain outstanding, consolidate with, or merge into, or
merge into itself, or sell or convey all or substantially all of its property to
any other company unless the provisions of Section 12 hereof are complied with.
5.6 Limitation on Dividends; Transactions with Affiliates. If Securities
are issued to CTBI Trust or a trustee of CTBI Trust in connection with the
issuance of Trust Securities by CTBI Trust and (i) there shall have occurred any
event that would constitute an Event of Default, (ii) the Company shall be in
default with respect to its payment of any obligations under the Preferred
Securities Guarantee relating to CTBI Trust or (iii) the Company shall have
given notice of its election to defer payments of interest on such Securities by
extending the interest payment period as provided in the Indenture and such
period, or any extension thereof, shall be continuing, then (a) the Company
shall not declare or pay any dividend on, make any distributions with respect
to, or redeem, purchase or make a liquidation payment with respect to, any of
its capital stock, and (b) the Company shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities issued by the Company which rank pari passu with or junior in
interest to the Debentures or make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu with or junior in interest to the
Subordinated Debentures (other than (a) dividends or distributions in common
stock, (b) any declaration of a dividend in connection with the implementation
of a shareholders' rights plan, or the issuance of stock under any such plan in
the future or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Preferred Securities Guarantee, and (d) purchases of
common stock related to rights under any of the Company's benefit plans for its
directors, officers or employees).
5.7 Covenants as to CTBI Trust.
(a) For so long as such Trust Securities of CTBI Trust remain
outstanding, the Company will (i) maintain 100% direct or indirect ownership of
the Common Securities of CTBI Trust; provided, however, that any permitted
successor of the Company under the Indenture may succeed to the Company's
ownership of the Common Securities, (ii) not voluntarily terminate, wind up or
liquidate CTBI Trust, except upon prior approval of the Federal Reserve if then
so required under applicable capital guidelines or policies of the Federal
Reserve, (iii) use its reasonable efforts, consistent with the terms of CTBI
Trust Agreement, to cause CTBI Trust (a) to remain a business trust, except in
connection with a distribution of Securities, the redemption of all of CTBI
Trust Securities of CTBI Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement of CTBI Trust, and (b)
to otherwise continue not to be treated as an association taxable as a
corporation or partnership for United States federal income tax purposes, and
(iv) to use its reasonable efforts, consistent with the terms of the Trust
Agreement, to cause each holder of Trust Securities to be treated as owning an
individual beneficial interest in the Securities.
(b) If the Debentures are to be issued as a Global Debenture in
connection with the distribution of the Debentures to the holders of the
Preferred Securities issued by the CTBI Trust upon a Dissolution Event, the
Company will use its best efforts to list such Debentures on The Nasdaq Stock
Markets' National Market or on such other exchange as the Preferred Securities
are then listed.
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6. Securityholders' Lists And Reports By The Company And The Trustee.
6.1 Company to Furnish Trustee Names and Addresses of Securityholders. The
Company will furnish or cause to be furnished to the Trustee (a) on a quarterly
basis on each regular record date (as defined in Section 2.5(a)) a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
holders of each series of Securities as of such regular record date, provided
that the Company shall not be obligated to furnish or cause to furnish such list
at any time that the list shall not differ in any respect from the most recent
list furnished to the Trustee by the Company (in the event the Company fails to
provide such list on a monthly basis, the Trustee shall be entitled to rely on
the most recent list provided by the Company); and (b) at such other times as
the Trustee may request in writing within 30 days after the receipt by the
Company of any such request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished; provided, however,
that, in either case, no such list need be furnished for any series for which
the Trustee shall be the Security Registrar.
6.2 Preservation of Information Communications with Securityholders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Securities contained in the most recent list furnished to it as provided in
Section 6.1 and as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting in such
capacity).
(b) The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section 312(b) of
the Trust Indenture Act with other Securityholders with respect to their rights
under this Indenture or under the Securities.
6.3 Reports by the Company.
(a) The Company covenants and agrees to file with the Trustee, within
15 days after the Company is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Company may be
required to file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may from time to time by rules and regulations prescribe) that
the Company may be required to file with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections, then to
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file with the Trustee and the Commission, in accordance with the rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports that may be
required pursuant to Section 13 of the Exchange Act, in respect of a security
listed and registered on The Nasdaq Stock Market National Market or a
national securities exchange as may be prescribed from time to time in such
rules and regulations.
(b) The Company covenants and agrees to file with the Trustee and the
Commission, in accordance with the rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants provided
for in this Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail, first class
postage prepaid, or reputable over-night delivery service that provides for
evidence of receipt, to the Securityholders, as their names and addresses appear
upon the Security Register, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required to be
filed by the Company pursuant to subsections (a) and (b) of this Section as may
be required by rules and regulations prescribed from time to time by the
Commission.
6.4 Reports by the Trustee.
(a) On or before July 15 in each year in which any of the Securities
are Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register, a brief report dated as of the preceding May 15, if and to
the extent required under Section 313(a) of CTBI Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c) of the
Trust Indenture Act.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be filed by the Trustee with the Company, with each stock
exchange upon which any Securities are listed (if so listed) and also with the
Commission. The Company agrees to notify the Trustee when any Securities become
listed on any stock exchange.
7. Remedies Of The Trustee And Securityholders On Event Of Default.
7.1 Events of Default.
(a) Whenever used herein with respect to the Debentures, "Event of
Default" means any one or more of the following events that has occurred and is
continuing:
(1) the Company defaults in the payment of any installment of
interest upon any of the Debentures, as and when the same shall become due and
payable, and continuance of
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such default for a period of 30 days; provided, however, that a valid
extension of an interest payment period by the Company in accordance with
the terms of this Indenture shall not constitute a default in the payment
of interest for this purpose;
(2) the Company defaults in the payment of the principal of (or
premium, if any, on) any of the Debentures as and when the same shall
become due and payable whether at maturity, upon redemption, by declaration
or otherwise; provided, however, that a valid extension of the maturity of
such Securities in accordance with the terms of any indenture supplemental
hereto shall not constitute a default in the payment of principal or
premium, if any;
(3) the Company fails to observe or perform any other of its
covenants or agreements with respect to the Debentures for a period of 90
days after the date on which written notice of such failure, requiring the
same to be remedied and stating that such notice is a "Notice of Default"
hereunder, shall have been given to the Company by the Trustee, by
registered or certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the Debentures at the time
Outstanding;
(4) the Company pursuant to or within the meaning of any
Bankruptcy Law (i) commences a voluntary case, (ii) consents to the entry
of an order for relief against it in an involuntary case, (iii) consents to
the appointment of a Custodian of it or for all or substantially all of its
property, or (iv) makes a general assignment for the benefit of its
creditors;
(5) a court of competent jurisdiction enters an order under any
Bankruptcy Law that (i) is for relief against the Company in an involuntary
case, (ii) appoints a Custodian of the Company for all or substantially all
of its property, or (iii) orders the liquidation of the Company or the
Guarantor, and the order or decree remains unstayed and in effect for 90
days; or
(6) CTBI Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Securities to holders of
Trust Securities in liquidation of their interests in CTBI Trust, (ii) the
redemption of all of the outstanding Trust Securities of CTBI Trust or
(iii) certain mergers, consolidations or amalgamation, each as permitted by
the Trust Agreement of CTBI Trust.
(b) In each and every such case, unless the principal of all 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 the Securities
then Outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by such Securityholders) may declare the principal of all the
Securities to be due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable, notwithstanding
anything contained in this Indenture or in the Securities.
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(c) At any time after the principal of the Securities 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,
the holders of a majority in aggregate principal amount of the Securities then
Outstanding hereunder, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if: (i) the Company has
paid or deposited with the Trustee a sum sufficient to pay all matured
installments of interest upon all the Securities of that series and the
principal of (and premium, if any, on) any and all Debentures that shall have
become due otherwise then by acceleration (with interest upon such principal and
premium, if any, and, to the extent that such payment is enforceable under
applicable law, upon overdue installments of interest, at the rate per annum
expressed in the Debentures to the date of such payment or deposit) and the
amount payable to the Trustee under Section 9.6, and (ii) any and all Events of
Default under the Indenture, other than the nonpayment of principal on
Debentures that shall not have become due by their terms, shall have been
remedied or waived as provided in Section 7.6.
(d) No such rescission and annulment shall extend to or shall affect
any subsequent default or impair any right consequent thereon.
(e) In case the Trustee shall have proceeded to enforce any right
with respect to the Debentures under this Indenture and such proceedings shall
have been discontinued or abandoned because of such rescission or annulment or
for any other reason or shall have been determined adversely to the Trustee,
then and in every such case the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all rights,
remedies and powers of the Company and the Trustee shall continue as though no
such proceedings had been taken.
7.2 Collection of Indebtedness and Suits for Enforcement by Trustee.
(a) The Company covenants that (1) in case it shall default in the
payment of any installment of interest on any of the Securities, and such
default shall have continued for a period of 90 Business Days, or (2) in case it
shall default in the payment of the principal of (or premium, if any, on) any of
the Securities when the same shall have become due and payable, whether upon
maturity of the Securities or upon redemption or upon declaration or otherwise,
then, upon demand of the Trustee the Guarantor (as defined in the Preferred
Securities Guarantee) will pay to the Trustee, for the benefit of the holders of
the Securities, the whole amount that then shall have been become due and
payable on all such Securities for principal (and premium, if any) or interest,
or both, as the case may be, with interest upon the overdue principal (and
premium, if any) and (to the extent that payment of such interest is enforceable
under applicable law and, if the Securities are held by CTBI Trust or a
trustee of such trust, without duplication of any other amounts paid by CTBI
Trust or trustee in respect thereof) upon overdue installments of interest at
the rate per annum expressed in the Securities; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, and the amount payable to the Trustee under Section 9.6.
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(b) If the Company shall fail to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or other obligor upon the
Securities and collect the moneys adjudged or decreed to be payable in the
manner provided by law out of the property of the Company or other obligor upon
the Securities, wherever situated.
(c) In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, readjustment, arrangement, composition or judicial proceedings
affecting the Company or the creditors or property of either, the Trustee shall
have power to intervene in such proceedings and take any action therein that may
be permitted by the court and shall (except as may be otherwise provided by law)
be entitled to file such proofs of claim and other papers and documents as may
be necessary or advisable in order to have the claims of the Trustee and of the
holders of the Securities allowed for the entire amount due and payable by the
Company under the Indenture at the date of institution of such proceedings and
for any additional amount that may become due and payable by the Company after
such date, and to collect and receive any moneys or other property payable or
deliverable on any such claim, and to distribute the same after the deduction of
the amount payable to the Trustee under Section 9.6; and any receiver, assignee
or trustee in bankruptcy or reorganization is hereby authorized by each of the
holders of the Securities to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to
such Securityholders, to pay to the Trustee any amount due it under Section 9.6.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to Securities, may
be enforced by the Trustee without the possession of any of such Securities, or
the production thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be brought in its
own name as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under Section 9.6,
be for the ratable benefit of the holders of the Securities.
(e) In case of an Event of Default hereunder, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in the 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.
(f) Nothing contained herein shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities of that series or the rights of any
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holder thereof or to authorize the Trustee to vote in respect of the claim of
any Securityholder in any such proceeding.
7.3 Application of Moneys Collected. Any moneys collected by the Trustee
pursuant to this Section with respect to the Securities 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 premium, if any) or
interest, upon presentation of the Securities, and notation thereon the payment,
if only partially paid, and upon surrender thereof if fully paid:
(a) FIRST: To the payment of costs and expenses of collection and of
all amounts payable to the Trustee under Section 9.6;
(b) SECOND: To the payment of all Senior Indebtedness of the Company
if and to the extent required by Section 16; and
(c) THIRD: To the payment of the amounts then due and unpaid upon
Securities for principal (and premium, if any) and interest, in respect of which
or for the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and payable on
such Securities for principal (and premium, if any) and interest, respectively.
7.4 Limitation on Suits.
(a) No holder of any Security shall have any right by virtue or by
availing of any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (i) such holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof with
respect to the Securities specifying such Event of Default, as hereinbefore
provided; (ii) the holders of not less than 25% in aggregate principal amount of
the Securities then Outstanding shall have made written request upon the Trustee
to institute such action, suit or proceeding in its own name as trustee
hereunder; (iii) such holder or holders shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; (iv) the Trustee for 60 days
after its receipt of such notice, request and offer of Indemnity, shall have
failed to institute any such action, suit or proceeding; and (v) during such 60
day period, the holders of a majority in principal amount of the Securities of
that series do not give the Trustee a direction inconsistent with the request.
(b) Notwithstanding anything contained herein to the contrary, any
other provisions of this Indenture, the right of any holder of any Security to
receive payment of the principal of (and premium, if any) and interest on such
Security, as therein provided, on or after the respective due dates expressed in
such Security (or in the case of redemption, on the redemption date), or to
institute suit for the enforcement of any such payment on or after such
respective dates or
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redemption date, shall not be impaired or affected without the consent of
such holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other of such Securities, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of 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.
7.5 Rights and Remedies Cumulative; Delay or Omission Not Waiver.
(a) Except as otherwise provided in Section 2.9, all powers and
remedies given by this Section to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to such Securities.
(b) No delay or omission of the Trustee or of any holder of any of the
Securities to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or on acquiescence
therein; and, subject to the provisions of Section 7.4, every power and remedy
given by this Section or by law to the Trustee or the Securityholders may be
exercised from time to time, and as often as shall be deemed expedient, by the
Trustee or by the Securityholders.
7.6 Control by Securityholders. The holders of a majority in aggregate
principal amount of the Securities at the time Outstanding, determined in
accordance with Section 10.4, shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee; provided, however,
that such direction shall not be in conflict with any rule of law or with this
Indenture or be unduly prejudicial to the rights of holders of Securities of any
other series at the time Outstanding determined in accordance with Section 10.4
hereof. Subject to the provisions of Section 9.1, the Trustee shall have the
right to decline to follow any such direction if the Trustee in good faith
shall, by a Responsible Officer or Officers of the Trustee, determine that the
proceeding so directed would involve the Trustee in personal liability. The
holders of a majority in aggregate principal amount of the Securities at the
time Outstanding affected thereby, determined in accordance with Section 10.4,
may on behalf of the holders of all of the Securities waive any past default in
the performance of any of the covenants contained herein and its consequences,
except (i) a default in the payment of the principal of, or premium, if any, or
interest on, any of the Securities as and when the same shall become due by the
terms of such securities otherwise than by acceleration (unless such default has
been cured and a sum sufficient
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to pay all matured installments of interest and principal and any premium has
been deposited with the Trustee (in accordance with Section 7.1(c)), (ii) a
default in the covenants contained in Section 5.6, or (iii) in respect of a
covenant or provision hereof which under Section 11 cannot be modified or
amended without the consent of the Holder of each Outstanding Security affected;
provided, however, that if the Debentures are held by CTBI Trust or a trustee
of such trust, such waiver or modification to such waiver shall not be effective
until the holders of a majority in liquidation preference of Trust Securities of
CTBI Trust shall have consented to such waiver or modification to such waiver;
provided further, that if the consent of the Holder of each Outstanding Security
is required, such waiver shall not be effective until each holder of CTBI Trust
Securities of CTBI Trust shall have consented to such waiver. Upon any such
waiver, the default covered thereby shall be deemed to be cured for all purposes
of this Indenture and the Company, the Trustee and the holders of the Securities
shall be restored to their former positions and rights hereunder, respectively;
but no such waiver shall extend to any subsequent or other default or impair any
right consequent thereon.
7.6 Undertaking to Pay Costs. All parties to this Indenture, and each
holder of any Securities by such holder's acceptance thereof shall be deemed to
have agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, 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, holding more than 10% in aggregate principal amount of
the Outstanding Debentures, or to any suit instituted by any Securityholder for
the enforcement of the payment of the principal of (or premium, if any) or
interest on any Debentures, on or after the respective due dates expressed in
such Debenture or established pursuant to this Indenture.
8. Form of Debenture and Original Issue.
8.1 Form of Debenture. The Debenture and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the forms
contained as Exhibit A to this Indenture, attached hereto and incorporated
herein by reference.
8.2 Original Issue of Debentures. Debentures in the aggregate principal
amount of $___________ may, upon execution of this Indenture, be executed by the
Company and delivered to the Trustee for authentication, and the Trustee shall
thereupon authenticate and deliver said Debentures to or upon the written order
of the Company, signed by its Chairman, its Vice Chairman, its President, or any
Vice President and its Treasurer or an Assistant Treasurer, without any further
action by the Company.
9. Concerning The Trustee.
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9.1 Certain Duties and Responsibilities of Trustee.
(a) The Trustee prior to the occurrence of an Event of Default with
respect to the Securities and after the curing of all Events of Default with
respect to the Debentures that may have occurred, shall undertake to perform
with respect to the Securities of such series such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants shall
be read into this Indenture against the Trustee. In case an Event of Default
with respect to the Debentures has occurred (that has not been cured or waived),
the Trustee shall exercise with respect to Debentures such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that:
(1) prior to the occurrence of an Event of Default with respect
to the Debentures and after the curing or waiving of all such Events of Default
with respect to the Debentures that may have occurred:
(A) the duties and obligations of the Trustee shall with
respect to the Debentures be determined solely by the express provisions of this
Indenture, and the Trustee shall not be liable with respect to the Debentures
except for the performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(B) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to the Debentures conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but in the case of any such certificates or
opinions that by any provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this Indenture.
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer or Responsible Officers of the
Trustee, unless it shall be proved that the Trustee, was negligent in
ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the holders of not less than a majority in principal amount of the
Debentures at the time Outstanding relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
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exercising any trust or power conferred upon the Trustee under this Indenture
with respect to the Debentures; and
(4) none of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers, if there is reasonable ground for believing that
the repayment of such funds or liability is not reasonably assured to it under
the terms of this Indenture or adequate indemnity against such risk is not
reasonably assured to it.
9.2 Notice of Defaults. Within 90 days after actual knowledge by a
Responsible Officer of the Trustee of the occurrence of any default hereunder
with respect to the Securities, the Trustee shall transmit by mail to all
holders of Securities, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal or (or premium, if any) or interest (including any Additional
Interest) on any Security, the Trustee shall be protected in withholding such
notice if and so long as the board of directors, the executive committee or a
trust committee of the directors and/or responsible officers of the Trustee
determines in good faith that the withholding of such notice is in the interests
of the holders of such Securities; and provided, further, that in the case of
any default of the character specified in Section 7.1(a)(3), no such notice to
holder of Securities shall be given until at least 30 days after the occurrence
thereof. For the purposes of this Section, the terms "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to the Securities.
9.3 Certain Rights of Trustee. Except as otherwise provided in Section
9.1:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security or
other paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) Any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by a Board Resolution or an instrument
signed in the name of the Company by the President or any Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee shall not be deemed to have knowledge of a default or
an Event of Default, other than an Event of Default specified in Section 7.1(a)
(1) or (2), unless and until it receives written notification of such Event of
Default from the Company or by holders of at least 25% of the aggregate
principal amount of the Securities at the time Outstanding;
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(d) The Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken or suffered or omitted hereunder
in good faith and in reliance thereon;
(e) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the 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
that may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default with respect to the Securities (that has not been cured or waived)
to exercise with respect to the Securities such of the rights and powers vested
in it by this Indenture, and to use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(f) The Trustee shall not be liable for any action taken or omitted to
be taken by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond, security, or
other papers or documents unless requested in writing so to do by the holders of
not less than a majority in principal amount of the Outstanding Securities
affected thereby (determined as provided in Section 10.4); provided, however,
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 costs, expenses or
liabilities as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Company or, if paid by the Trustee, shall
be repaid by the Company upon demand; and
(h) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
9.4 Trustee Not Responsible for Recitals or Issuance or Securities.
(a) The recitals contained herein and in the Securities shall be taken
as the statements of the Company and the Trustee assumes no responsibility for
the correctness of the same.
(b) The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities.
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(c) The Trustee shall not be accountable for the use or application by
the Company of any of the Securities or of the proceeds of such Securities, or
for the use or application of any moneys paid over by the Trustee in accordance
with any provision of this Indenture, or for the use or application of any
moneys received by any paying agent other than the Trustee.
9.5 May Hold Securities. The Trustee or any paying agent or Security
Registrar, in its individual or any other capacity, may become the owner or
pledgee of Securities with the same rights it would have if it were not Trustee,
paying agent or Security Registrar.
9.6 Monies Held in Trust. Subject to the provisions of Section 13.5, all
monies received by the Trustee shall, until used or applied as herein provided,
be held in trust for the purposes for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any monies received by it hereunder
except such as it may agree with the Company to pay thereon.
9.7 Compensation and Reimbursement.
(a) The Company covenants and agrees to pay to the Trustee, and the
Trustee shall be entitled to, such reasonable compensation (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), as the Company and the Trustee may from time to time agree in
writing, for all services rendered by it in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
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 Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence or bad faith. The Company also
covenants to indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any loss, liability or expense
incurred without negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim of
liability in the premises.
(b) The obligations of the Company under this Section to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior 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.
9.8 Reliance on Officers' Certification. Except as otherwise provided in
Section 9.1 whenever in the administration of the provisions of this Indenture
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering or omitting to take any action
hereunder, such matter (unless other evidence in respect thereof be
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herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken, suffered or omitted to be taken by
it under the provisions of this Indenture upon the faith thereof.
9.9 Disqualification: Conflicting Interests. If the Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Trustee and the Company shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
9.10 Corporate Trustee Required; Eligibility. There shall at all times be a
Trustee with respect to the Debentures issued hereunder which shall at all times
be a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or of the District of
Columbia, or a corporation or other Person permitted to act as trustee by the
Commission, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 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 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. The Company may not, nor may any Person
directly or indirectly controlling, controlled by, or under common control with
the Company, serve as Trustee. In case at any time CTBI 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 9.11.
9.11 Resignation and Removal; Appointment of Successor.
(a) The Trustee or any successor hereafter appointed, may at any time
resign with respect to the Securities by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear upon the
Security Register. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor trustee with respect to Securities by written
instrument, in duplicate, executed by order of the Board of Directors, one copy
of which instrument shall be delivered to the resigning Trustee and one copy to
the successor trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee with respect to
Securities, or any Securityholder who has been a bona fide holder of a Security
or Securities for at least six months may, subject to the provisions of Section
9.9, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor trustee. Such court may
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thereupon after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of
Section 9.9 after written request therefor by the Company or the Guarantor or by
any Securityholder who has been a bona fide holder of a Security or Securities
for at least six months; or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.10 and shall fail to resign after written request
therefor by the Company or by any such Securityholder; or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or commence a voluntary bankruptcy proceeding,
or a receiver of the Trustee or of its property shall be appointed or consented
to, or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, the Company may remove the Trustee with
respect to all Securities and appoint a successor trustee by written instrument,
in duplicate, executed by order of the Board of Directors, one copy of which
instrument shall be delivered to the Trustee so removed and one copy to the
successor trustee, or, subject to the provisions of Section 9.9, unless the
Trustee's duty to resign is stayed as provided herein, any Securityholder who
has been a bona fide holder of a Security or Securities for at least six months
may, on behalf of that holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee. Such court may thereupon after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and appoint a
successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time Outstanding may at any time remove the Trustee by so
notifying the Trustee and the Company and may appoint a successor Trustee with
the consent of the Company.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee with respect to the Securities pursuant to any of the
provisions of this Section shall become effective upon acceptance of appointment
by the successor trustee as provided in Section 9.12.
(e) Any successor trustee appointed pursuant to this section may be
appointed with respect to the Securities, and at any time there shall be only
one Trustee with respect to the Securities.
9.12 Acceptance of Appointment by Successor.
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(a) In case of the appointment hereunder of a successor trustee with
respect to the Securities, every such successor trustee so appointed shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee; but, on the request
of the Company or the successor trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument transferring to such
successor trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all property
and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers and trusts referred
to in paragraph (a) of this Section, as the case may be.
(c) No successor trustee shall accept its appointment unless at the
time of such acceptance such successor trustee shall be qualified and eligible
under this Section.
(d) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall transmit notice of the succession of such
trustee hereunder by mail, first class postage prepaid, to the Securityholders,
as their names and addresses appear upon the Security Register. If the Company
fails to transmit such notice within ten days after acceptance of appointment by
the successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company and the Guarantor.
9.13 Merger, Conversion, Consolidation or Succession to Business. Any
corporation into which the Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to substantially all of the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such corporation
shall be qualified under the provisions of Section 9.9 and eligible under the
provisions of Section 9.10, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
9.14 Preferential Collection of Claims Against the Company. The Trustee
shall comply with Section 311(a) of the Trust Indenture Act, excluding any
creditor relationship described in Section 311(b) of the Trust Indenture Act. A
Trustee who has resigned or been removed shall be subject to Section 311(a) of
the Trust Indenture Act to the extent included therein.
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10. Concerning The Securityholders.
10.1 Evidence of Action by Securityholders.
(a) Whenever in this Indenture it is provided that the holders of a
majority or specified percentage in aggregate principal amount of the Securities
may take any action (including the making of any demand or request, the giving
of any notice, consent or waiver or the taking of any other action), the fact
that at the time of taking any such action the holders of such majority or
specified percentage have joined therein may be evidenced by any instrument or
any number of instruments of similar tenor executed by such holders of
Securities in Person or by agent or proxy appointed in writing.
(b) If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or other
action, but the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record date, but only
the Securityholders of record at the close of business on the record date shall
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
Outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
10.2 Proof of Execution by Securityholders. Subject to the provisions of
Section 10.1, proof of the execution of any instrument by a Securityholder (such
proof will not require notarization) or his agent or proxy and proof of the
holding by any Person of any of the Securities shall be sufficient if made in
the following manner:
(a) The fact and date of the execution by any such Person of any
instrument may be proved in any reasonable manner acceptable to the Trustee.
(b) The ownership of Securities shall be proved by the Security
Register of such Securities or by a certificate of the Security Registrar
thereof.
(c) The Trustee may require such additional proof of any matter
referred to in this Section as it shall deem necessary.
10.3 Who May Be Deemed Owners. Prior to the due presentment for
registration of transfer of any Security, the Company, the Trustee, any paying
agent and any Security Registrar may
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deem and treat the Person in whose name such Security shall be registered upon
the books of the Company as the absolute owner of such Security (whether or not
such Security shall be overdue and notwithstanding any notice of ownership or
writing thereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and (subject to Section 2.3) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
Security Registrar shall be affected by any notice to the contrary.
10.4 Certain Securities Owned by Company Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Securities
have concurred in any direction, consent of waiver under this Indenture, the
Securities that are owned by the Company or any other obligor on the Securities
or by any Person directly or indirectly controlling or controlled by or under
common control with the Company or any other obligor on the Securities shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver, only
Securities that the Trustee actually knows are so owned shall be so disregarded.
The Securities so owned that have been pledged in good faith may be regarded as
Outstanding for the purposes of this Section, if the pledgee shall establish to
the satisfaction of the Trustee the pledgee's right so to act with respect to
such Securities and that the pledgee is not a Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any such other obligor. In case of a dispute as to such right, any
decision by the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
10.5 Actions Binding on Future Securityholders. At any time prior to (but
not after) the evidencing to the Trustee, as provided in Section 10.1, of the
taking of any action by the holders of the majority or percentage in aggregate
principal amount of the Securities specified in this Indenture in connection
with such action, any holder of a Security that is shown by the evidence to be
included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee, and upon proof of holding as
provided in Section 10.2, revoke such action so far as concerns such 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 Security issued in exchange therefor, on
registration of transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security. Any action taken
by the holders of the majority or percentage in aggregate principal amount of
the Securities specified in this Indenture in connection with such action shall
be conclusively binding upon the Company, the Trustee and the holders of all the
Securities.
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11. Supplemental Indentures.
11.1 Supplemental Indentures Without the Consent of Security holders.
(a) In addition to any supplemental indenture otherwise authorized by
this Indenture, the Company 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 CTBI Trust Indenture Act as then in effect),
without the consent of the Securityholders, for one or more of the following
purposes:
(1) to cure any ambiguity, defect, or inconsistency herein, in
the Securities;
(2) to comply with Section 10;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(4) to add to the covenants of the Company for the benefit of the
holders of all of the Securities or to surrender any right or power herein
conferred upon the Company;
(5) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or purposes of
issue, authentication, and delivery of Securities, as herein set forth;
(6) to make any change that does not adversely affect the rights
of any Securityholder in any material respect;
(7) to provide for the issuance of and establish the form and
terms and conditions of the Securities, to establish the form of any
certifications required to be furnished pursuant to the terms of this Indenture
of Securities, or to add to the rights of the holders of Securities; or
(8) qualify or maintain the qualification of the Indenture under
CTBI Trust Indenture Act.
(b) The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
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(c) Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the holders of any of the Securities at the time Outstanding, notwithstanding
any of the provisions of Section 11.2.
11.2 Supplement Indentures with Consent of Securityholders.
(a) With the consent (evidenced as provided in Section 10.1 of the
holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding, the Company, when authorized by Board
Resolutions, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto (which shall conform to the
provisions of the Trust Indenture Act as then in effect) for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of any supplemental indenture or of modifying in
any manner not covered by Section 11.1 the rights of the holders of the
Securities under this Indenture; provided, however, that no such supplemental
Indenture shall without the consent of the holders of each Debenture then
Outstanding and affected thereby, (i) extend the fixed maturity of any
Securities, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each Security so
affected or (ii) reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture provided,
further, that so long as any of the Securities issued by CTBI Trust remain
outstanding, no such supplemental indenture shall adversely affect the holders
of the Preferred Securities in any material respect without the consent of the
holders of a majority of the aggregate liquidation preference of the Preferred
Securities, provided further, that if the Debentures are held by CTBI Trust or a
trustee of such trust, such supplemental indenture shall not be effective until
the holders of a majority in liquidation preference of Trust Securities of CTBI
Trust shall have consented to such supplemental indenture; provided further,
that if the consent of the holder of each Outstanding Debt Security is required,
such supplemental indenture shall not be effective until each holder of the
Trust Securities of CTBI Trust shall have consented to such supplemental
indenture.
(b) It shall not be necessary for the consent of the Securityholders
affected thereby 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.
11.3 Effect of Supplemental Indentures. Upon the execution of any
supplemental indenture pursuant to the provisions of this Section or of Section
10.1, 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
Company and the holders of Securities 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.
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11.4 Securities Affected by Supplemental Indentures. Securities affected
by a supplemental indenture, authenticated and delivered after the execution of
such supplemental indenture pursuant to the provisions of this Section or of
Section 11.1, may bear a notation in form approved by the Company, provided such
form meets the requirements of any exchange upon which the Securities may be
listed as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities of that series so modified as to
conform, in the opinion of the Board of Directors of the Company, to any
modification of this Indenture contained in any such supplemental indenture may
be prepared by the Company, authenticated by the Trustee and delivered in
exchange for the Securities then Outstanding.
11.5 Execution of Supplemental Indentures.
(a) Upon the request of the Company, accompanied by their Board
Resolutions authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
required to consent thereto as aforesaid, the Trustee shall join with the
Company 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. The Trustee,
subject to the provisions of Section 9.1 may receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Section is authorized or permitted by, and conforms to, the terms of this
Section and that it is proper for the Trustee under the provisions of this
Section to join in the execution thereof.
(b) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders as their names and addresses appear upon the Security Register.
Any failure of the Trustee to mail such notice, or any defect therein, shall
not, however, in any way impair or affect the validity of any such supplemental
indenture.
12. Successor Corporation.
12.1 Company May Consolidate, Etc. Nothing contained in this Indenture or
in any of the Securities shall prevent any consolidation or merger of the
Company with or into any other corporation or corporations (whether or not
affiliated with the Company, as the case may be), or successive consolidations
or mergers in which the Company, as the case may be, or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company, as the case may
be, or its successor or successors as an entirety, or substantially as an
entirety, to any other corporation (whether or not affiliated with the Company,
as the case may be, or its successor or successors) authorized to acquire and
operate the same; provided, however, the Company hereby covenants and agree
that, (i) upon any such consolidation, merger, sale, conveyance, transfer or
other disposition, the due and punctual
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payment, in the case of the Company, of the principal of (premium, if any) and
interest on all of the Debentures, according to their terms and the due and
punctual performance and observance of all the covenants and conditions of this
Indenture to be kept or performed by the Company as the case may be, shall be
expressly assumed, by supplemental indentures (which shall conform to the
provisions of the Trust Indenture Act, as then in effect) satisfactory in form
to the Trustee executed and delivered to the Trustee by the entity formed by
such consolidation, or into which the Company, as the case may be, shall have
been merged, or by the entity which shall have acquired such property; (ii) in
case the Company consolidates with or merges into another Person or conveys or
transfers its properties and assets substantially then as an entirety to any
Person, the successor Person is organized under the laws of the United States of
any state or the District of Columbia, and (iii) immediately after giving effect
thereto, an Event of Default, and no event which, after notice or lapse of time
or both, would become an Event of Default, shall have occurred and be
continuing.
12.2 Successor Corporation Substituted.
(a) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor
corporation, by supplemental indenture, executed and delivered to the Trustee
and satisfactory in form to the Trustee, of, in the case of the Company, the due
and punctual payment of the principal of, premium, if any, and interest on all
of the Debentures Outstanding and the due and punctual performance of all of the
covenants and conditions of this Indenture to be performed by the Company, as
the case may be such successor corporation shall succeed and be substituted for
the Company with the same effect as if it had been named as the Company herein,
and thereupon the predecessor corporation shall be relieved of all obligations
and covenants under this Indenture and the Securities.
(b) In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition such changes in phraseology and form (but not in
substance) may be made in the Securities thereafter to be issued as may be
appropriate.
(c) Nothing contained in this Indenture or in any of the Securities
shall prevent the Company from merging into itself or acquiring by purchase or
otherwise all or any part of the property of any other Person (whether or not
affiliated with the Company).
12.3 Evidence of Consolidation, Etc. to Trustee. The Trustee, subject to
the provisions of Section 9.1 may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
other disposition, and any such assumption, comply with the provisions of this
Section.
13. Satisfaction And Discharge.
13.1 Satisfaction and Discharge of Indenture. If at any time: (a) the
Company shall have delivered to the Trustee for cancellation all Securities
theretofore authenticated (other than any
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Securities that shall have been destroyed, lost or stolen and that shall have
been replaced or paid as provided in Section 2.9) and Securities for whose
payment money or Governmental Obligations have theretofore been deposited in
trust or segregated and held in trust by the Company (and thereupon repaid to
the Company or discharged from such trust, as provided in Section 13.5; or all
such Securities not theretofore delivered to the Trustee for cancellation shall
have become due and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and the Company shall deposit or cause to be deposited with the Trustee as trust
funds the entire amount in moneys or Governmental Obligations sufficient or 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 at maturity or upon redemption all Securities
not theretofore delivered to the Trustee for cancellation, including principal
(and premium, if any) and interest due or to become due to such date of maturity
or date fixed for redemption, as the case may be, and if the Company shall also
pay or cause to be paid all other sums payable hereunder with respect to the
Company; then this Indenture shall thereupon cease to be of further effect
except for the provisions of Sections 2.3, 2.7, 2.9, 5.1, 5.2, 5.3 and 9.10,
that shall survive until the date of maturity or redemption date, as the case
may be, and Sections 9.6 and 13.5, that shall survive to such date and
thereafter, and the Trustee, on demand of the Company and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
13.2 Discharge of Obligations. If at any time all such Securities not
heretofore delivered to the Trustee for cancellation or that have not become due
and payable as described in Section 13.1 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or an amount of
Governmental Obligations sufficient in the opinion of a nationally recognized
certified public accounting firm to pay at maturity or upon redemption all such
Securities not theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due to such date
of maturity or date fixed for redemption, as the case may be, and if the Company
shall also pay or cause to be paid all other sums payable hereunder by the
Company, then after the date such moneys or Governmental Obligations, as the
case may be, are deposited with the Trustee the obligations of the Company under
this Indenture shall cease to be of further effect except for the provisions of
Sections 2.3, 2.7, 2.9, 5.1, 5.3, 9.6, 9.10 and 13.5 hereof that shall survive
until such Securities shall mature and be paid. Thereafter, Sections 9.6 and
13.5 shall survive.
13.3 Deposited Moneys to be Held in Trust. All monies or Governmental
Obligations deposited with the Trustee pursuant to Sections 13.1 or 13.2 shall
be held in trust and shall be available for payment as due, either directly or
through any paying agent (including the Company acting as its own paying agent),
to the holders of the Securities for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
13.4 Payment of Monies Held by Paying Agents. In connection with the
satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this Indenture
shall, upon demand of the Company, be paid to the Trustee
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and thereupon such paying agent shall be released from all further liability
with respect to such moneys or Governmental Obligations.
13.5 Repayment to Company. Any monies or Governmental Obligations deposited
with any paying agent or the Trustee, or then held by the Company in trust for
payment of principal of or premium or interest on the Securities that are not
applied but remain unclaimed by the holders of such Securities for at least two
years after the date upon which the principal of (and premium, if any) or
interest on such Securities shall have respectively become due and payable,
shall be repaid to the Company, upon written request by the Company, on March 31
of each year or (if then held by the Company) shall be discharged from such
trust; and thereupon the paying agent and the Trustee shall be released from all
further liability with respect to such moneys or Governmental Obligations, and
the holder of any of the Securities entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company or the
Guarantor for the payment thereof.
14. Immunity Of Incorporators, Stockholders, Officers And Directors.
14.1 No Recourse. No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, shall be had against any incorporator,
stockholder, officer or director, past, present or future as such, of the
Company or of any predecessor or successor corporation, either directly or
through the Company or the Guarantor or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that this Indenture and the obligations issued hereunder are solely
corporate obligations, and that no such personal liability whatever shall attach
to, or is or shall be incurred by, the incorporators, stockholders, officers or
directors as such, of the Company or of any predecessor or successor
corporation, or any of them, because of the creation of the Indebtedness hereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or implied therefrom;
and that any and all such personal liability of every name and nature, either at
common law or in equity or by constitution or statute, of, and any and all such
rights and claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness hereby authorized,
or under or by reason of the obligations, covenants or agreements contained in
this Indenture or in any of the Securities or implied therefrom, are hereby
expressly waived and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
15. Miscellaneous Provisions.
15.1 Effect on Successors and Assigns. All the covenants, stipulations,
promises and agreements in this Indenture contained by or on behalf of the
Company shall bind their respective successors and assigns, whether so expressed
or not.
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<PAGE>
15.2 Actions by Successors. Any act or proceeding by any provision of this
Indenture authorized or required to be done or performed by any board, committee
or officer of the Company shall and may be done and performed with like force
and effect by the corresponding board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
15.3 Surrender of Company Powers. The Company by instrument in writing
executed by authority of 2/3 (two-thirds) of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the
Company, and thereupon such power so surrendered shall terminate both as to the
Company, as the case may be, and as to any successor corporation.
15.4 Notices. Except as otherwise expressly provided herein any notice or
demand that by any provision of this Indenture is required or permitted to be
given or served by the Trustee or by the holders of Securities to or on the
Company may be given or served by being deposited first class postage prepaid in
a post-office letterbox addressed (until another address is filed in writing by
the Company with the Trustee), as follows: c/o Community Trust Bancorp, Inc.,
208 North Mayo Trail, Pikeville, Kentucky 415101, Attention Chief Financial
Officer. Any notice, election, request or demand by the Company or any
Securityholder to or upon the Trustee shall be deemed to have been sufficiently
given or made, for all purposes, if received in writing at the Corporate Trust
Office of the Trustee.
15.5 Governing Law. This Indenture and each Security shall be deemed to be
a contract made under the internal laws of the Commonwealth of Kentucky and for
all purposes shall be construed in accordance with the laws of said State.
15.6 Treatment of Debentures as Debt. It is intended that the Debentures
will be treated as indebtedness and not as equity for federal income tax
purposes. The provisions of this Indenture shall be interpreted to further this
intention.
15.7 Compliance Certificates and Opinions.
(a) Upon any application or demand by the Company to the Trustee to
take any action under any of the provisions of this Indenture, the Company shall
furnish to the Trustee an Officers' 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.
(b) Each certificate and opinion of the Company provided for in this
Indenture and delivered to the Trustee with respect to compliance with a
condition or covenant in this Indenture shall include (1) a statement that the
Person making such certificate or opinion has read such
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<PAGE>
covenant or condition; (2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based; (3) a statement that, in the opinion of
such Person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether or not, in
the opinion of such Person, such condition or covenant has been complied with.
15.8 Payments on Business Days. In any case where the date of maturity of
interest or principal of any Security or the date of redemption of any Security
shall not be a Business Day, then payment of interest or principal (and premium,
if any) may be made on the next succeeding Business Day with the same force and
effect as if made on the nominal date of maturity or redemption, and no interest
shall accrue for the period after such nominal date.
15.9 Conflict With Trust Indenture Act. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of Trust Indenture Act, such imposed
duties shall control.
15.10 Counterparts. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
15.11 Severability. In case any one or more of the provisions contained in
this Indenture or in the Securities of any series shall for any reason be held
to be invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such Securities shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
15.12 Assignment. The Company will have the right at all times to assign
any of its respective rights or obligations under this Indenture to a direct or
indirect wholly-owned Subsidiary of the Company, provided that, in the event of
any such assignment, the Company will remain liable for all such obligations.
Subject to the foregoing, the Indenture is binding upon and inures to the
benefit of the parties thereto and their respective successors and assigns. This
Indenture may not otherwise be assigned by the parties thereto.
15.13 Acknowledgment of Rights. The Company acknowledges that, with respect
to any Debentures held by CTBI Trust or a trustee of such trust, if the Property
Trustee fails to enforce its rights under this Indenture as the holder of the
series of Debentures held as the assets of CTBI Trust any holder of Preferred
Securities may institute legal proceedings directly against the Company to
enforce such Property Trustee's rights under this Indenture without first
instituting any legal proceedings against such Property Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Company to pay interest or principal on the Securities on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption
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date), the Company acknowledges that a holder of Preferred Securities may
directly institute a proceeding for enforcement of payment to such holder of the
principal of or interest on the Securities having a principal amount equal to
the aggregate liquidation amount of the Preferred Securities of such holder on
or after the respective due date specified in the Applicable Series of
Securities.
16. Subordination Of Securities.
16.1 Agreement to Subordinate.
(a) The Company covenants and agrees, and each Holder of Debentures
issued hereunder by such Holder's acceptance thereof likewise covenants and
agrees, that all Debentures shall be issued subject to the provisions of this
Section 16; and each Holder of a Debt Security, whether upon original issue or
upon transfer or assignment thereof, accepts and agrees to be bound by such
provisions.
(b) The payment by the Company of the principal of, premium, if any,
and interest on all Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment of
the prior payment in full of all Senior Debt, Subordinated Debt and Additional
Senior Obligations, whether outstanding at the date of this Indenture or
thereafter incurred.
(c) No provision of this Section 16 shall prevent the occurrence of
any default or Event of Default hereunder.
16.2 Default on Senior Debt, Subordinated Debt or Additional Senior
Obligations.
(a) In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Debt, Subordinated Debt or Additional Senior Obligations of the
Company, as the case may be, or in the event that the maturity of any Senior
Debt, Subordinated Debt or Additional Senior Obligations of the Company
(collectively, "Senior Indebtedness"), as the case may be, has been accelerated
because of a default, then, in either case, no payment shall be made by the
Company with respect to the principal (including redemption and sinking fund
payments) of, or premium, if any, or interest on the Debentures.
(b) In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 16.2, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior Indebtedness
may have been issued, as their respective interests may appear, but only to the
extent that the holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing
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within 90 days of such payment of the amounts then due and owing on the Senior
Indebtedness and only the amounts specified in such notice to the Trustee shall
be paid to the holders of Senior Indebtedness.
16.3 Liquidation; Dissolution; Bankruptcy.
(a) Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company on
account of the principal (and premium, if any) or interest on the Debentures;
and upon any such dissolution or winding-up or liquidation or reorganization,
any payment by the Company, or distribution of assets of the Company of any kind
or character, whether in cash, property or securities, to which the holders of
the Debentures or the Trustee would be entitled to receive from the Company,
except for the provisions of this Section 16, shall be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other Person
making such payment or distribution, or by the holders of the Debentures or by
the Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of Debentures or to the Trustee.
(b) In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, and their respective interests may appear, as calculated
by the Company, for application to the payment of all Senior Indebtedness of the
Company, as the case may be, remaining unpaid to the extent necessary to pay
such Senior Indebtedness in full in money in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
(c) For purposes of this Section 16, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjust-
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ment, the payment of which is subordinated at least to the extent provided in
this Section 16 with respect to the Debentures to the payment of all Senior
Indebtedness of the Company, as the case may be, that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
corporation or the liquidation or dissolution of the Company following the
conveyance or transfer of its property as an entirety, or substantially as an
entirety, to another corporation upon the terms and conditions provided for in
Section 10 of the Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 16.3 if such
other corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Section 10 of the Indenture.
Nothing in Section 16.2 or in this Section 16.3 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 9.6 of the Indenture.
16.4 Subrogation.
(a) Subject to the payment in full of all Senior Indebtedness of the
Company, the rights of the Holders of the Debentures shall be subrogated to the
rights of the holders of such Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company, as the case may
be, applicable to such Senior Indebtedness until the principal of (and premium,
if any) and interest on the Debentures shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
such Senior Indebtedness of any cash, property or securities to which the
Holders of the Debentures or the Trustee would be entitled except for the
provisions of this Section 16, and no payment over pursuant to the provisions of
this Section 16 to or for the benefit of the holders of such Senior Indebtedness
by Holders of the Debentures or the Trustee, shall, as between the Company, its
creditors other than Holders of Senior Indebtedness of the Company, and the
holders of the Debentures, be deemed to be a payment by the Company to or on
account of such Senior Indebtedness. It is understood that the provisions of
this Section 16 are and are intended solely for the purposes of defining the
relative rights of the Holders of the Debentures, on the one hand, and the
holders of such Senior Indebtedness on the other hand.
(b) Nothing contained in this Section 16 or elsewhere in this
Indenture or in the Debentures is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness of the
Company, and the Holders of the Debentures, the obligations of the Company,
which is absolute and unconditional, to pay to the Holders of the Debentures the
principal of (and premium, if any) and interest on the Debentures as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the Holders of the Debentures
and creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness of the Company, as the case may be, nor shall anything
herein or therein prevent the Trustee or the Holder of any Debt Security from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture, subject to the rights, if any, under this Section 16 of the
holders of such Senior Indebtedness in respect of
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cash, property or securities of the Company, as the case may be, received upon
the exercise of any such remedy.
(c) Upon any payment or distribution of assets of the Company referred
to in this Section 16, the Trustee, subject to the provisions of Section 9.1 of
the Indenture, and the Holders of the Debentures shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Debentures, for the purposes of ascertaining the Persons entitled to participate
in such distribution, the holders of Senior Indebtedness and other indebtedness
of the Company, as the case may be, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Section 16.
16.5 Trustee to Effectuate Subordination. Each Holder of Debentures by such
Holder's acceptance thereof authorizes and directs the Trustee on such Holder's
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Section 16 and appoints the Trustee such Holder's
attorney-in-fact for any and all such purposes.
16.6 Notice by the Company.
(c) The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Section 16. Notwithstanding the
provisions of this Section 16 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 of monies to or by the Trustee in
respect of the Debentures pursuant to the provisions of this Section 16, unless
and until a Responsible Officer of the trustee shall have received written
notice thereof from the Company or a holder or holders of Senior Indebtedness or
from any trustee therefor; and before the receipt of any such written notice,
the Trustee, subject to the provisions of Section 9.1 of the Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 16.6 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest on
any Debenture), then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to receive such money and to
apply the same to the purposes for which they were received, and shall not be
affected by any notice to the contrary that may be received by it within two
Business Days prior to such date.
(b) The Trustee, subject to the provisions of Section 9.1 of the
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company, as the case may be (or a trustee
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on behalf of such holder), to establish that such notice has been given by a
holder of such Senior Indebtedness or a trustee on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Section 16, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Section 16, 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.
16.7 Rights of the Trustee; Holders of Senior Indebtedness.
(a) The Trustee in its individual capacity shall be entitled to all
the rights set forth in this Section 16 in respect of any Senior Indebtedness at
any time held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. The Trustee's right to compensation and reimbursement
of expenses as set forth in Section 9.6 shall not be subject to the
subordination provisions of this Section 16.
(b) With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Section 16, and not implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Section 9.1 of the Indenture, the Trustee shall not
be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Holders if Debentures, the Company or any other Person money or
assets to which any holder of such Senior Indebtedness shall be entitled by
virtue of this Section 16 or otherwise.
16.8 Subordination May Not be Impaired.
(a) No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company, as the case may be, or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company, as the
case may be, with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
(b) Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Holders of the Debentures, without incurring responsibility to the Holders of
the Debentures and without impairing or releasing the
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subordination provided in this Section 16 or the obligations hereunder of the
Holders of the Debentures to the holders of such Senior Indebtedness, do any one
or more of the following: (i) change the manner, place or terms of payment or
extend the time of payment of, or renew or alter, such Senior Indebtedness, or
otherwise amend or supplement in any manner such Senior Indebtedness or an
instrument evidencing the same or any agreement under which such Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing such Senior Indebtedness;
(iii) release any Person liable in any manner for the collection of such Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company, as the case may be, and any other Person.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly
executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
COMMUNITY TRUST BANCORP, INC.
By:
-------------------------------------
Richard M. Levy, Executive Vice
President and Chief Financial Officer
ATTEST:
- ----------------------------
Jean R. Hale, Secretary
STATE STREET BANK AND TRUST COMPANY
as Trustee
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
STATE OF
----------------- )
) SS:
COUNTY OF )
---------------- )
The foregoing instrument was acknowledged before me this ____ day of ________,
1997 by Richard M. Levy, as Executive Vice President and Chief Financial Officer
of Community Trust Bancorp, Inc., a Kentucky corporation on behalf of the
corporation.
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My commission expires: ________________________.
_______________________________
Notary Public
COMMONWEALTH OF MASSACHUSETTS )
) SS:
COUNTY OF SUFFOLK )
The foregoing instrument was acknowledged before me this ____ day of ________,
1997 by _______________, as _________________________ of State Street Bank and
Trust Company, a Massachusetts trust company on behalf of the trust company.
My commission expires: ________________________.
_______________________________
Notary Public
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EXHIBIT A
(FORM OF FACE OF DEBENTURE)
No. _____________________________ $ ______________________
CUSIP No. 204149-10-8
COMMUNITY TRUST BANCORP, INC.
___% SUBORDINATED DEBENTURE
DUE MARCH 31, 2027
Community Trust Bancorp, Inc., a Kentucky corporation (the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received, hereby promises to pay to, ________________, or
registered assigns, the principal sum of _______________ Dollars ($_______) on
March 31, 2027 (the "Stated Maturity"), and to pay interest on said principal
sum from __________, 1997, to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on each of March
31, June 30, September 30, and December 31 of each year at the rate of ___% per
annum until the principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the same rate per annum compounded quarterly.
The amount of interest payable on any Interest Payment Date shall be computed on
the basis of a 360-day year of twelve 30-day months. Except as provided in the
following sentence, the amount of interest payable for any period shorter than a
full quarterly period for which interest is computed, will be computed on the
basis of the actual number of days elapsed in a 360-day year of twelve 30-day
months. In the event that any date on which interest is payable on this
Debenture is not a business day, then payment of interest payable on such date
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) in each case with the
same force and effect as if made on the date such payment was originally
payable. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the person in whose name this Debenture (or one or more Predecessor
Securities, as defined in said Indenture) is registered at the close of business
on the regular record date for such interest installment, which shall be the
close of business on the business day next preceding such Interest Payment Date
unless otherwise provided in the indenture. Any such interest installment not
punctually paid or duly provided for shall forthwith cease to be payable to the
registered Holders on such regular record date and may be paid to the Person in
whose name this Debenture (or one or more Predecessor Securities) is registered
at the close of business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be given to the
registered Holders of this series of Debentures not less than 10 days prior to
such special record date, or may be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Debentures may
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be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Debenture shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of the United States
of America that at the time of payment is legal tender for payment of public and
private debt; provided, however, that payment of interest may be made at the
option of the Company by check mailed to the registered Holder at such address
as shall appear in the Security Register. Notwithstanding the foregoing, so long
as the Holder of this Debenture is the Property Trustee, the payment of the
principal of (and premium, if any) and interest on this Debenture will be made
at such place and to such account as may be designated by the Property Trustee.
The Stated Maturity may be shortened at any time by the Company to any date
not earlier than March 31, 2027, subject to the Company having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. Such date may also be extended
at any time at the election of the Company for one or more periods, but in no
event to a date later than March 31, 2036, subject to certain limitations
described in the Indenture.
The indebtedness evidenced by this Debenture is, to the extent provided in the
Indenture, subordinate and junior in right of payment to the prior payment in
full of all Senior Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his or her behalf to take
such action as may be necessary or appropriate to acknowledge or effectuate the
subordination so provided and (c) appoints the Trustee his or her attorney-in-
fact for any and all such purposes. Each Holder hereof, by his or her
acceptance hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by each holder of
Senior Indebtedness, whether now outstanding or hereafter incurred, and waives
reliance by each such holder upon said provisions.
This Debenture shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse side hereof and
such continued provisions shall for all purposes have the same effect as though
fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
Dated ___________, 1997
COMMUNITY TRUST BANCORP, INC.
By:
-------------------------
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Name: Richard M. Levy
Title: Executive Vice President and
Chief Financial Officer
Attest:
By: _______________________
Name: Jean R. Hale
Title: Secretary
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EXHIBIT B
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-mentioned Indenture.
Dated:
--------------------------
- --------------------------------
as Trustee
---------------------------------
or Authentication Agent
By: By
----------------------------- ------------------------------
Authorized Signatory
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EXHIBIT C
(FORM OF REVERSE OF DEBENTURE)
_____% SUBORDINATED DEBENTURE
(CONTINUED)
This Debenture is one of the subordinated debentures of the Company (herein
sometimes referred to as the "Debentures"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture dated as of
_______________, 1997 (the "Indenture") duly executed and delivered between the
Company and State Street Bank and Trust Company, as Trustee (the "Trustee"), to
which Indenture reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the Holders of the Debentures. The Debentures are
limited in aggregate principal amount as specified in the Indenture.
Because of the occurrence and continuation of a Tax Event, Investment
Company Event or Capital Event, in certain circumstances, this Debenture may
become due and payable at the principal amount together with any interest
accrued thereon, to the date of such redemption (the "Redemption Price"). The
Redemption Price shall be paid prior to 12:00 noon, Eastern Standard Time, on
the date of such redemption or at such earlier time as the Company determines.
The Company shall have the right to redeem this Debenture at the option of the
Company, without premium or penalty, in whole or in part at any time on or after
March 31, 2007 (an "Optional Redemption"), or at any time in certain
circumstances upon the occurrence of a Tax Event or Investment Company Event, at
the Redemption Price. Any redemption pursuant to this paragraph will be made
upon not less than 30 days nor more than 60 days notice, at the Redemption
Price. If the Debentures are only partially redeemed by the Company pursuant to
an Optional Redemption, the Debentures will be redeemed pro rata or by lot or by
any other method utilized by the Trustee.
In the event of redemption of this Debenture in part only, a new Debenture
or Debentures for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Debentures may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
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The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of Debentures not less than a majority in
aggregate principal amount of the Debentures at the time Outstanding, as defined
in the Indenture, to execute supplemental indentures for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or of modifying in any manner
the rights of the Holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of the Debentures
except as provided in the Indenture, or reduce the principal amount thereof, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent of the Holder
of each Debenture so affected, or (ii) reduce the aforesaid percentages of
Debentures, the Holders of which are required to consent to any such
supplemental indenture, without the consent of the Holders of each Debenture
then outstanding and affected thereby. The Indenture also contains provisions
permitting the Holders of a majority in aggregate principal amount of the
Debentures at the time outstanding affected thereby, on behalf of all of the
Holders of the Debentures, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established pursuant to the
Indenture, and its consequences, except a default in the payment of the
principal of or premium, if any, or interest on any of the Debentures of such
series. Any such consent or waiver by the registered Holder of this Debenture
(unless removed as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future Holders and owners of this Debenture and of
any Debenture issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Debenture.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest on this Debenture at the time and place and at the rate and in the
money herein prescribed.
The Company shall have the right at any time during the term of the
Debentures and from time to time to extend the interest payment period of such
Debentures for up to 20 consecutive quarters (an "Extended Interest Payment
Period"), at the end of which period the Company shall pay all interest then
accrued and unpaid (together with interest thereon at the rate specified for the
Debentures to the extent that payment of such interest is enforceable under
applicable law). Before the termination of any such Extended Interest Payment
Period, the Company may further extend such Extended Interest Payment Period,
provided that such Extended Interest Payment Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extended Interest Payment Period and upon the payment of
all accrued and unpaid interest and any additional amounts then due, the Company
may commence a new Extended Interest Payment Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Debenture is transferable by the registered Holder hereof on the
Security Register of the Company, upon surrender of this Debenture for
registration of transfer at the office or agency of the Trustee in Boston,
Massachusetts accompanied by a written instrument or instruments of transfer in
form
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satisfactory to the Company or the Trustee duly executed by the registered
Holder hereof or his attorney duly authorized in writing, and thereupon one or
more new Debentures of authorized denominations and for the same aggregate
principal amount and series will be issued to the designated transferee or
transferees. No service charge will be made for any such transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Debenture,
the Company, the Trustee, any paying agent and the Security Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Debenture shall be overdue and notwithstanding any notice of ownership
or writing hereon made by anyone other than the Security Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Security Registrar
shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Debenture that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
The Debentures are issuable only in registered form without coupons in
denominations of $25 and any integral multiple thereof. This Global Debenture is
exchangeable for Debentures in definitive form only under certain limited
circumstances set forth in the Indenture. Debentures of this series so issued
are issuable only in registered form without coupons in denominations of $25 and
any integral multiple thereof.
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EXHIBIT 4.7
-----------------------------------------------
PREFERRED SECURITIES GUARANTEE AGREEMENT
COMMUNITY TRUST BANCORP, INC.
and
STATE STREET BANK AND TRUST COMPANY
DATED AS OF _______________ ____, 1997
-----------------------------------------------
<PAGE>
TABLE OF CONTENTS
Section Page
1. Definitions and Interpretation ....................................... 1
1.1 Definitions and Interpretations ................................. 1
2. Trust Indenture Act .................................................. 4
2.1 Trust Indenture Act; Application ................................ 4
2.2 Lists of Holders of Securities .................................. 4
2.3 Reports by the Preferred Guarantee Trustee ...................... 5
2.4 Periodic Reports to Preferred Guarantee Trustee ................. 5
2.5 Evidence of Compliance with Conditions Precedent ................ 5
2.6 Events of Default; Waiver ....................................... 5
2.7 Event of Default; Notice ........................................ 5
2.8 Conflicting Interests ........................................... 6
3. Powers, Duties And Rights Of Preferred Guarantee Trustee ............. 6
3.1 Powers and Duties of the Preferred Guarantee Trustee ............ 6
3.2 Certain Rights of Preferred Guarantee Trustee ................... 8
3.3 Not Responsible for Recitals or Issuance of Guarantee ........... 9
4. Preferred Guarantee Trustee .......................................... 10
4.1 Preferred Guarantee Trustee; Eligibility ........................ 10
4.2 Appointment, Removal and Resignation of Preferred Guarantee
Trustees ........................................................ 10
5. Guarantee ............................................................ 11
5.1 Guarantee ....................................................... 11
5.2 Waiver of Notice and Demand ..................................... 11
5.3 Obligations Not Affected ........................................ 11
5.4 Rights of Holders ............................................... 12
5.5 Guarantee of Payment ............................................ 13
5.6 Subrogation ..................................................... 13
5.7 Independent Obligations ......................................... 13
6. Limitation Of Transactions; Subordination ............................ 13
6.1 Limitation of Transactions ...................................... 13
6.2 Ranking ......................................................... 13
7. Termination .......................................................... 14
7.1 Termination ..................................................... 14
8. Indemnification ...................................................... 14
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TABLE OF CONTENTS
Section Page
8.1 Exculpation ..................................................... 14
8.2 Indemnification ................................................. 14
9. Miscellaneous ........................................................ 15
9.1 Successors and Assigns .......................................... 15
9.2 Amendments ...................................................... 15
9.3 Notices ......................................................... 15
9.4 Benefit ......................................................... 16
9.5 Governing Law ................................................... 16
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<PAGE>
TRUST INDENTURE ACT
CROSS-REFERENCE TABLE
Section of Trust Indenture
Acts of 1939, Amended Section of Indenture
310(a) ................................................................. 4.1(a)
310(b) ............................................................ 2.8, 4.1(c)
310(c) ......................................................... Not Applicable
311(a) ................................................................. 2.2(b)
311(b) ................................................................. 2.2(b)
311(c) ......................................................... Not Applicable
312(a) ................................................................. 2.2(a)
312(b) ................................................................. 2.2(b)
313 ....................................................................... 2.3
314(a) .................................................................... 2.4
314(b) ......................................................... Not Applicable
314(c) .................................................................... 2.5
314(d) ......................................................... Not Applicable
314(e) .......................................................... 1.1, 2.5, 3.2
314(f) ............................................................... 2.1, 3.2
315(a) ................................................................. 3.1(d)
315(b) .................................................................... 2.7
315(c) .................................................................... 3.1
315(d) ................................................................. 3.1(d)
316(a) ............................................................... 1.1, 5.4
316(b) .................................................................... 5.4
316(c) .................................................................... 8.2
317(a) ......................................................... Not Applicable
317(b) ......................................................... Not Applicable
318(a) ................................................................. 2.1(b)
318(b) .................................................................... 2.1
318(c) ................................................................. 2.1(a)
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PREFERRED SECURITIES GUARANTEE AGREEMENT
This Preferred Securities Guarantee Agreement (the "Preferred Securities
Guarantee"), dated as of _______________ ____, 1997, is executed by and between
Community Trust Bancorp, Inc. (the "Guarantor"), a Kentucky corporation, and
State Street Bank and Trust Company, 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 CTBI Preferred Capital Trust
("CTBI Trust"), a Delaware statutory business trust.
RECITALS:
A. Whereas, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of ________ __, 1997, among the trustees of CTBI Trust
named therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial interest in the assets of CTBI Trust, CTBI Trust is issuing
on the date hereof ________ preferred securities, having an aggregate
liquidation amount of $______________, designated the _____% Cumulative Trust
Preferred Securities (the "Preferred Securities");
B. 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.
AGREEMENT:
NOW, THEREFORE, the parties hereby agree as follows: 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.
1. Definitions And Interpretation.
1.1 Definitions and Interpretations.
(a) In this Preferred Securities Guarantee, unless the context
otherwise requires:
(1) 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;
(2) a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;
(3) 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;
<PAGE>
(4) all references in this Preferred Securities Guarantee to
Sections are to Sections of this Preferred Securities Guarantee, unless
otherwise specified;
(5) 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
(6) a reference to the singular includes the plural and vice
versa.
(b) "Affiliate" has the same meaning as given to that term in Rule 405
of the Securities Act of 1933, as amended, or any successor rule thereunder.
(c) "Business Day" means any day other than (a) a Saturday or Sunday,
(b) a day on which banking institutions in The City of New York are authorized
or required by law or executive order to remain closed, or (c) a day on which
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
(d) "Corporate Trust Office" means the office of the Preferred
Guarantee Trustee at which the corporate trust business of the Preferred
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at Two
International Place, 4th Floor, Boston, MA 02110, Attn: Corporate Trust
Department.
(e) "Covered Person" means any Holder or beneficial owner of Preferred
Securities.
(f) "Debentures" means the series of convertible junior subordinated
debt securities of the Guarantor designated the __________% Cumulative
Subordinated Debentures due 2027 held by the Property Trustee (as defined in the
Trust Agreement) of CTBI Trust.
(g) "Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.
(h) "Guarantee Payments" means the following payments or distributions
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by CTBI Trust: (i) any accrued and unpaid Distributions (as defined
in the Trust Agreement) that are required to be paid on such Preferred
Securities to the extent CTBI Trust shall have funds available therefor, (ii)
the redemption price, including all accrued and unpaid Distributions to the date
of redemption (the "Redemption Price") to the extent CTBI Trust has funds
available therefor, with respect to any Preferred Securities called for
redemption by CTBI Trust, and (iii) upon a voluntary or involuntary dissolution,
winding-up or termination of CTBI Trust (other than in connection with the
distribution of Debentures to the Holders in exchange for Preferred Securities
as provided in the Trust Agreement), the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Preferred
Securities to the date of payment, to the extent CTBI Trust shall have funds
available therefor and (b) the amount of assets
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of CTBI Trust remaining available for distribution to Holders in liquidation of
CTBI Trust (in either case, the "Liquidation Distribution").
(i) "Holder" shall mean any holder, as registered on the books and
records of CTBI Trust of any Preferred Securities; provided, however, that, in
determining whether the holders of the requisite percentage of Preferred
Securities have given any request, notice, consent or waiver hereunder, "Holder"
shall not include the Guarantor or any Affiliate of the Guarantor.
(j) "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.
(k) "Indenture" means the Indenture dated as of ______________, 1997
among the Guarantor (the "Debenture Issuer") and State Street Bank and Trust
Company, as trustee, and any indenture supplemental thereto pursuant to which
certain subordinated debt securities of the Debenture Issuer are to be issued to
the Property Trustee of CTBI Trust.
(l) "Majority in liquidation amount of the Preferred Securities"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
Preferred Securities, voting separately as a class, of more than 50% of the
liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Preferred
Securities.
(m) "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:
(1) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definition relating
thereto;
(2) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(3) 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
(4) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
(n) "Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust,
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<PAGE>
unincorporated association, or government or any agency or political subdivision
thereof, or any other entity of whatever nature.
(o) "Preferred Guarantee Trustee" means State Street Bank and Trust
Company, until a Successor Preferred Guarantee Trustee has been appointed and
has accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.
(p) "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 Officer of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
(q) "Successor Preferred Guarantee Trustee" means a successor
Preferred Guarantee Trustee possessing the qualifications to act as Preferred
Guarantee Trustee under Section 4.1.
(r) "Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
2. Trust Indenture Act.
2.1 Trust Indenture Act; Application.
(a) This Preferred Securities Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Preferred
Securities Guarantee and shall, to the extent applicable, be governed by such
provisions; and
(b) If and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Section 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
2.2 Lists of Holders of Securities.
(a) The Guarantor shall provide the Preferred Guarantee Trustee with a
list, in such form as the Preferred Guarantee Trustee may reasonably require, of
the names and addresses of the Holder of the Preferred Securities ("List of
Holders) as of such date, (i) within 1 Business Day after January 1 and June 30
of each year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Preferred Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Preferred Guarantee Trustee by
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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.
2.3 Reports by the Preferred Guarantee Trustee. Within 60 days after May 15
of each year, the Preferred Guarantee Trustee shall provide to the Holders of
the Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by Section
313 of the Trust Indenture Act. The Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
2.4 Periodic Reports to Preferred Guarantee Trustee. The Guarantor shall
provide to the Preferred Guarantee Trustee such documents, reports and
information as required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act.
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.
2.6 Events of Default; Waiver. The Holders of a Majority in liquidation
amount of Preferred Securities may, by vote, on behalf of the Holders of all of
the Preferred Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Preferred Securities Guarantee, but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any right
consequent thereon.
2.7 Event of Default; Notice.
(a) The Preferred Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default actually known to a Responsible Officer of the Preferred Guarantee
Trustee, unless such defaults have been cured before the giving of such notice
provided, that, the Preferred Guarantee Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer of the Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Preferred Securities.
(b) The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Preferred Guarantee Trustee shall
have received written notice, or of
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which a Responsible Officer of the Preferred Guarantee Trustee charged with the
administration of the Trust Agreement shall have obtained actual knowledge.
2.8 Conflicting Interests. The Trust Agreement 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.
3. Powers, Duties And Rights Of Preferred Guarantee Trustee.
3.1 Powers and Duties of the Preferred Guarantee Trustee.
(a) This Preferred Securities Guarantee shall be held by the Preferred
Guarantee Trustee for the benefit of the Holders of the Preferred Securities,
and the Preferred Guarantee Trustee shall not transfer this Preferred Securities
Guarantee to any Person except a Holder of Preferred Securities exercising his
or her rights pursuant to Section 5.4(b) or to a Successor Preferred Guarantee
Trustee on acceptance by such Successor Preferred Guarantee Trustee of its
appointment to act as Successor Preferred Guarantee Trustee. The right, title
and interest of the Preferred Guarantee Trustee shall automatically vest in any
Successor Preferred Guarantee Trustee, and such vesting and cessation of title
shall be effective whether or not conveyancing documents have been executed and
delivered pursuant to the appointment of such Successor Preferred Guarantee
Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Preferred Guarantee Trustee has occurred and is continuing, the Preferred
Guarantee Trustee shall enforce this Preferred Securities Guarantee for the
benefit of the Holders of the Preferred Securities.
(c) The Preferred Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.6) and is actually known to a Responsible Officer
of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) 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.
(2) 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;
(3) 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
(4) no provision of this Preferred Securities Guarantee shall
require the Preferred Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if the
Preferred Guarantee Trustee shall have reasonable grounds for believing
that the repayment of such funds or liability is not reasonably assured to
it under the terms of this Preferred Securities Guarantee or indemnity,
reasonably satisfactory to the Preferred Guarantee Trustee, against such
risk or liability is not reasonably assured to it.
3.2 Certain Rights of Preferred Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(1) 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,
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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.
(2) Any direction or act of the Guarantor contemplated by this
Preferred Securities Guarantee shall be sufficiently evidenced by a
Direction or an Officers' Certificate.
(3) 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.
(4) The Preferred Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(5) The Preferred Guarantee Trustee may consult with counsel,
and the written advice or opinion of such counsel with respect to legal
matters shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and
in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its
employees. The Preferred Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this Preferred
Securities Guarantee from any court of competent jurisdiction.
(6) 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)(6) 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.
(7) 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, requests,
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.
-8-
<PAGE>
(8) 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.
(9) 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.
(10) Whenever in the administration of this Preferred Securities
Guarantee the Preferred Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Preferred Guarantee Trustee (i) may
request instructions from the Holders of a Majority in liquidation amount
of the Preferred Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be protected in conclusively relying on or acting in accordance
with such instructions.
(b) No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.
3.3 Not Responsible for Recitals or Issuance of Guarantee. The recitals
contained in this Guarantee shall be taken as the statements of the Guarantor,
and the Preferred Guarantee Trustee does not assume any responsibility for their
correctness. The Preferred Guarantee Trustee makes no representation as to the
validity or sufficiency of this Preferred Securities Guarantee.
4. Preferred Guarantee Trustee.
4.1 Preferred Guarantee Trustee; Eligibility.
(a) There shall at all times be a Preferred Guarantee Trustee which
shall:
(1) not be an Affiliate of the Guarantor; and
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(2) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(2), 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.
4.2 Appointment, Removal and Resignation of Preferred Guarantee Trustees.
(a) Subject to Section 4.2(b), the Preferred Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor.
(b) The Preferred Guarantee Trustee shall not be removed in accordance
with Section 4.2(a) until a Successor Preferred Guarantee Trustee has been
appointed and has accepted such appointment by written instrument executed by
such Successor Preferred Guarantee Trustee and delivered to the Guarantor.
(c) The Preferred Guarantee Trustee appointed to office shall hold
office until a Successor Preferred Guarantee Trustee shall have been appointed
or until its removal or resignation. The Preferred Guarantee Trustee may resign
from office (without need for prior or subsequent accounting) by an instrument
in writing executed by the Preferred Guarantee Trustee and delivered to the
Guarantor, which resignation shall not take effect until a Successor Preferred
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Preferred Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Guarantee Trustee.
(d) If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee.
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<PAGE>
(e) No Preferred Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Preferred Guarantee Trustee.
(f) Upon termination of this Preferred Securities Guarantee or
removal or resignation of the Preferred Guarantee Trustee pursuant to this
Section 4.2, the Guarantor shall pay to the Preferred Guarantee Trustee all
amounts accrued to the date of such termination, removal or resignation.
5. Guarantee.
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 CTBI Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that CTBI Trust may have or assert.
The Guarantor's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing CTBI Trust to pay such amounts to the Holders.
5.2 Waiver of Notice and Demand. The Guarantor hereby waives notice of
acceptance of this Preferred Securities Guarantee and of any liability to which
it applies or may apply, presentment, demand for payment, any right to require a
proceeding first against CTBI Trust or any other Person before proceeding
against the Guarantor, protest, notice of nonpayment, notice of dishonor, notice
of redemption and all other notices and demands.
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 CTBI Trust of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by CTBI Trust;
(b) the extension of time for the payment by CTBI Trust of all or any
portion of the Distributions, Redemption Price, Liquidation Distribution or any
other sums payable under the terms of the Preferred Securities or the extension
of time for the performance of any other obligation under, arising out of, or in
connection with, the Preferred Securities (other than an extension of time for
payment of Distributions, Redemption Price, Liquidation Distribution or other
sum payable that results from the extension of any interest payment period on
the Debentures or any extension of the maturity date of the Debentures permitted
by the Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders
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<PAGE>
pursuant to the terms of the Preferred Securities, or any action on the part of
CTBI Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, CTBI Trust or any of the assets of
CTBI Trust;
(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 circumstances 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.
5.4 Rights of Holders.
(a) The Holders of a Majority in liquidation amount of the Preferred
Securities have the right to direct the time, method and place of conducting of
any proceeding for any remedy available to the Preferred Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any trust or power
conferred upon the Preferred Guarantee Trustee under this Preferred Securities
Guarantee.
(b) Any Holder of Preferred Securities may institute a legal
proceeding directly against the Guarantor to enforce its rights under this
Preferred Securities Guarantee, without first instituting a legal proceeding
against CTBI Trust, the Preferred Guarantee Trustee or any other Person.
5.5 Guarantee of Payment. This Preferred Securities Guarantee creates a
guarantee of payment and not of collection.
5.6 Subrogation. The Guarantor shall be subrogated to all (if any) rights
of the Holders of Preferred Securities against CTBI Trust in respect of any
amounts paid to such Holders by the Guarantor under this Preferred Securities
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation or any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities
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<PAGE>
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.
5.7 Independent Obligations. The Guarantor acknowledges that its
obligations hereunder are independent of the obligations of CTBI Trust with
respect to the Preferred Securities, and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Preferred Securities Guarantee notwithstanding the occurrence of
any event referred to in subsections (a) through (g), inclusive, of Section 5.3
hereof.
6. Limitation Of Transactions; Subordination.
6.1 Limitation of Transactions. So long as any Preferred Securities remain
outstanding, if there shall have occurred an Event of Default or an event of
default under the Trust Agreement, then (a) the Guarantor shall not declare or
pay any dividend on, make any distributions with respect to, or redeem,
purchase, acquire or make a liquidation payment with respect to, any of its
capital stock, (b) the Guarantor shall not make any payment of interest,
principal or premium, if any, on or repay, repurchase or redeem any debt
securities (including guarantees) issued by the Guarantor which rank pari passu
with or junior to the Debentures or (c) the Guarantor shall not make any
guarantee payments with respect to the foregoing (other than pursuant to the
Preferred Securities Guarantee Agreement); provided, however, the Guarantor may
declare and pay a stock dividend where the dividend stock is the same stock as
that on which the dividend is being paid.
6.2 Ranking. This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to all other liabilities of the Guarantor, (ii) pari passu
with the most senior preferred or preference stock now or hereafter issued by
the Guarantor and with guarantee now or hereafter entered into by the Guarantor
in respect of any preferred or preference stock of any Affiliate of the
Guarantor, and (iii) senior to the Guarantor's common stock.
7. Termination.
7.1 Termination. This Preferred Securities Guarantee shall terminate upon
(i) full payment of the Redemption Price of all Preferred Securities, (ii) upon
full payment of the amounts payable in accordance with the Trust Agreement upon
liquidation of CTBI Trust or (iii) upon distribution of the Debentures to the
holders of the Preferred Securities. Notwithstanding the foregoing, this
Preferred Securities Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Preferred
Securities must restore payment of any sums paid under the Preferred Securities
or under this Preferred Securities Guarantee.
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<PAGE>
8. Indemnification.
8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission preformed 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.
8.2 Indemnification. The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Preferred Securities Guarantee.
9. Miscellaneous.
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.
9.2 Amendments. Except with respect to any changes that do not materially
adversely affect the rights of Holders (in which case no consent of Holders will
be required), this Preferred Securities Guarantee may only be amended with the
prior approval of the Holders of at least a Majority in liquidation amount
(including the stated amount that would be paid on redemption, liquidation or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all the outstanding Preferred Securities.
The provisions of Section
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<PAGE>
6 of the Trust Agreement with respect to meetings of Holders of the Securities
apply to the giving of such approval.
9.3 Notices. All notices provided for in this Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by registered or certified mail, as
follows:
(a) If given to the Preferred Guarantee Trustee, at the Preferred
Guarantee Trustee's mailing address set forth below (or such other address as
the Preferred Guarantee Trustee may give notice of to the Holders of the
Preferred Securities):
Two International Place, 4th Floor
Boston, Massachusetts 02110
Attn: Corporate Trust Department
(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):
Community Trust Bancorp, Inc.
208 North Mayo Trail
Pikeville, Kentucky 41502
Attn: Chief Financial Officer
(c) If given to any Holder of Preferred Securities, at the address
set forth on the books and records of CTBI 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.
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.
9.5 Governing Law. THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF KENTUCKY.
In Witness Whereof, the parties have entered into this Agreement as of the
date first written above.
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<PAGE>
Community Trust Bancorp, Inc.
as Guarantor
By:
--------------------------------
Title:
--------------------------------
State Street Bank and Trust Company, as
preferred guarantee Trustee
By:
--------------------------------
Title:
--------------------------------
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EXHIBIT 5.1
[LETTERHEAD OF GREENEBAUM DOLL & MCDONALD PLLC]
March 25, 1997
Community Trust Bancorp, Inc.
208 North Mayo Trail
Pikeville, Kentucky 41501
Ladies and Gentlemen:
We have acted as legal counsel to Community Trust Bancorp, Inc., a Kentucky
corporation (the "Company"), and CTBI Preferred Capital Trust, a Delaware
statutory business trust (the "Trust"), in connection with the preparation of
a Registration Statement on Form S-3 under the Securities Act of 1933, as
amended (the "Act"), filed by the Company and the Trust with the Securities
and Exchange Commission (the "SEC") on March 25, 1997 (the "Registration
Statement") for the purpose of registering under the Act Cumulative Trust
Preferred Securities (the "Preferred Securities") issued by the Trust.
Capitalized terms not defined herein shall have the meaning assigned to them
in the Registration Statement.
We have examined and are familiar with the (i) the certificate of trust of
the Trust (the "Certificate of Trust") filed with the Secretary of State of
the State of Delaware, (ii) the Amended and Restated Trust Agreement of the
Trust, (iii) the form of the Preferred Securities of the Trust, (iv) the form
of the Guarantee between the Company and State Street Bank and Trust Company,
as trustee, (v) the form of the Subordinated Debentures to be issued by the
Company, and (vi) the form of the subordinated debenture indenture (the
"Indenture") between the Company and State Street Bank and Trust Company, as
trustee. We have also examined originals or copies, certified, or otherwise
identified to our satisfaction, of such other documents, certificates, and
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents executed by parties other than the Company or the Trust, we have
assumed that such parties had the power, corporate or other, to enter into and
perform all obligations thereunder and have also assumed the due authorization
by all requisite action, corporate or other, and execution and delivery by
such parties of such documents and that, except as set forth in paragraphs (1)
and (2) below, such documents constitute valid and binding obligations of such
parties. In addition, we have assumed that the Amended and Restated Trust
Agreement of the Trust, the Preferred Securities of the Trust, the Guarantee,
the Subordinated Debentures and the Indenture when executed, will be executed
in substantially the form reviewed by us with only such modifications which
are accepted by us. As to any facts material to the opinions expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representations of officers, trustees, and other
representatives of the Company, the Trust and others.
<PAGE>
Based upon and subject to the foregoing and to other qualifications and
limitations set forth herein, we are of the opinion that:
1. After the Indenture has been duly executed and delivered, the
Subordinated Debentures, when duly executed, delivered, authenticated
and issued in accordance with the Indenture and delivered and paid for
as contemplated by the Registration Statement, 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 enforcement thereof may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights generally,
and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in equity).
2. The Guarantee, when duly executed and delivered by the parties thereto,
will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent
that enforcement thereof may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, or other similar laws now or hereafter in
effect relating to creditors' rights generally, and (ii) general
principles of equity (regardless of whether enforceability is considered
in a proceeding at law or in equity).
We are members of the Bar of the Commonwealth of Kentucky. To the extent that
laws other than the laws of the Commonwealth of Kentucky are applicable to any
of the transactions, agreements, or instruments referred to herein, we express
no opinion on such laws.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and with such state securities administrators as may
require such opinion of counsel for the registration of the Preferred
Securities and to the reference to this firm under the heading "Validity of
Preferred Securities" in the Prospectus. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Act or under the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Greenebaum Doll & McDonald PLLC
Greenebaum Doll & McDonald PLLC
2
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
March 25, 1997
CTBI Preferred Capital Trust
c/o Community Trust Bancorp, Inc.
208 North Mayo Trial
Pikeville, Kentucky 41501
Re: CTBI Preferred Capital Trust
----------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Community Trust Bancorp,
Inc., a Kentucky corporation ("CTBI"), and CTBI Preferred Capital Trust, a
Delaware business trust (the "Trust"), in connection with the matters set forth
herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated March 18, 1997
(the "Certificate"), as filed in the office of the Secretary of State of the
State of Delaware (the "Secretary of State") on March 18, 1997;
(b) The Trust Agreement, dated as of March 18, 1997, between CTBI
and Wilmington Trust Company, a Delaware banking corporation, as Trustee of the
Trust;
<PAGE>
CTBI Preferred Capital Trust
March 25, 1997
Page 2
(c) The Registration Statement (the "Registration Statement") on
Form S-3, including a preliminary prospectus (the "Prospectus"), relating to the
Preferred Securities of the Trust, representing preferred undivided beneficial
interests in the assets of such Trust (each, a "Preferred Security" and
collectively, the "Preferred Securities"), as filed by CTBI and the Trust with
the Securities and Exchange Commission on March 25, 1997;
(d) A form of Amended and Restated Trust Agreement, to be entered
into among CTBI, State Street Bank and Trust Company, as Property Trustee, the
Trustee, the other trustees of the Trust named therein, and the holders, from
time to time, of undivided beneficial interests in the assets of the Trust (the
"Trust Agreement"), filed as an exhibit to the Registration Statement; and
(e) A Certificate of Good Standing for the Trust, dated March 25,
1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Trust Agreement.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed above, and we have assumed that there exists no
provision in any document that we have not reviewed that bears upon or is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed (i) the
authenticity of all documents submitted to us as authentic originals, (ii) the
conformity with the originals of all documents submitted to us as copies or
forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the Trust
Agreement constitutes the entire agreement among the parties thereto with
respect to the subject matter thereof, including with respect to the creation,
operation and termination of the Trust, and that the Trust Agreement and
Certificate are in full force and effect and have not been amended, (ii) except
to the extent provided in paragraph 1 below, the due creation or due
organization or due formation, as the case may be, and valid existence in good
standing of each party to the documents examined by us under the laws of the
jurisdiction governing its creation, organization or formation, (iii) the
<PAGE>
CTBI Preferred Capital Trust
March 25, 1997
Page 3
legal capacity of natural persons who are parties to the documents examined by
us, (iv) that each of the parties to the documents examined by us has the power
and authority to execute and deliver, and to perform its obligations under, such
documents, (v) the due authorization, execution and delivery by all parties
thereto of all documents examined by us, (vi) the receipt by each Person to whom
a Preferred Security is to be issued by the Trust (collectively, the "Preferred
Security Holders") of a Preferred Security Certificate for such Preferred
Security and the payment for the Preferred Security acquired by it, in
accordance with the Trust Agreement and the Registration Statement, and (vii)
that the Preferred Securities are issued and sold to the Preferred Security
Holders in accordance with the Trust Agreement and the Registration Statement.
We have not participated in the preparation of the Registration Statement and
assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder which are currently in effect.
Based upon the foregoing, and upon our examination of such questions
of law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
(S) 3801, et seq.
2. The Preferred Securities to be issued to the Preferred Security
Holders have been duly authorized by the Trust Agreement and will be duly and
validly issued and, subject to the qualifications set forth in paragraph 3
below, fully paid and nonassessable undivided beneficial interests in the assets
of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Trust Agreement.
<PAGE>
CTBI Preferred Capital Trust
March 25, 1997
Page 4
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition,
we hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of Persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the rules
and regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger
WF/nebg
<PAGE>
Exhibit 8.1
[LETTERHEAD OF GREENEBAUM DOLL & MCDONALD PLLC]
March 25, 1997
Board of Directors
Community Trust Bancorp, Inc.
CTBI Preferred Capital Trust
208 North Mayo Trail
Pikeville, Kentucky 41501
Re: CTBI Preferred Capital Trust Cumulative Trust Preferred
Securities ("Preferred Securities")
Ladies and Gentlemen:
We have acted as counsel to the Community Trust Bancorp, Inc., a Kentucky
corporation ("Company"), in connection with the issuance by the Company of its
Subordinated Debentures to CTBI Preferred Capital Trust, a statutory business
trust formed under the laws of Delaware ("CTBI Trust"). CTBI Trust is filing a
Registration Statement ("Registration Statement") on Form S-3 in connection with
its issuance of the Preferred Securities. In that connection, you have requested
our opinion as to the Federal income tax consequences of the purchase, ownership
and disposition of the Preferred Securities. All defined terms used herein which
are not defined herein shall have the meaning given such terms in the
Registration Statement.
We have examined (i) the Certificate of Trust of CTBI Trust filed with the
Secretary of State of the State of Delaware on March 18, 1997, (ii) the form
of the Registration Statement, (iii) the form of the Trust Agreement, (iv) the
form of the Preferred Securities, (v) the form of the Guarantee, (vi) the form
of the Subordinated Debentures and (vii) the form of the Indenture (in the case
of the documents referenced in (iii) through (vi) above, in the form
<PAGE>
Community Trust Bancorp, Inc.
CTBI Preferred Capital Trust
March 25, 1997
Page 2
filed as an exhibit to the Registration Statement). Our opinion is based upon
the premise that the transactions will be consummated in accordance with the
documents furnished to us.
In our opinion, for Federal income tax purposes, CBTI Trust will be
classified as a grantor trust, and not as an association taxable as a
corporation.
We have reviewed the discussion set forth under the heading "CERTAIN
FEDERAL INCOME TAX CONSEQUENCES" in the form of Registration Statement submitted
to us. While that discussion does not purport to discuss all possible United
States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities, in our opinion, such discussion
constitutes, in all material respects, a fair and accurate summary of the United
States federal income tax consequences of the purchase, ownership and
disposition of Preferred Securities, based upon current law.
SCOPE OF OPINION
----------------
This opinion represents our views as to the interpretation of existing law
and cannot be taken as an assurance of how the law will subsequently develop.
Accordingly, no assurance can be given that the Internal Revenue Service will
not alter its present views, either prospectively or retroactively, or adopt new
views with regard to any of the matters upon which we are rendering an opinion,
nor can any assurance be given that the Internal Revenue Service will not
challenge the positions which the Company or CTBI Trust intend to take.
CONSENT
-------
We hereby consent to the use of our name in the Registration Statement
under the heading "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" and to the filing of
this opinion with the Securities and Exchange Commission and such state
securities administrators or commissioners as may be necessary or appropriate.
Very truly yours,
/s/ Greenebaum Doll & McDonald PLLC
<PAGE>
Exhibit 23.1
------------
CONSENT OF INDEPENDENT AUDITORS
-------------------------------
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of Community Trust
Bancorp, Inc. CTBI Preferred Capital Trust for the registration of 1,200,000
shares of Trust Preferred Securities and to the incorporation by reference
therein of our report dated January 13, 1997, with respect to the consolidated
financial statements of Community Trust Bancorp, Inc. included in the Community
Trust Bancorp, Inc. Annual Report on Form 10-K for the year ended December 31,
1996, filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
/s/ Ernst & Young LLP
March 21, 1997
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-3 pertaining to the Community Trust Bancorp, Inc. CTBI
Preferred Capital Trust of our report dated January 13, 1996 with respect to
the consolidated financial statements of Community Trust Bancorp, Inc.
(formerly Pikeville National Corporation) included in the Annual Report (Form
10-K) for the year ended December 31, 1995. We also consent to the reference
to us under the heading "Experts" in the prospectus.
/s/ Crowe, Chizek and Company LLP
Crowe, Chizek and Company LLP
South Bend, Indiana
March 21, 1997
<PAGE>
Exhibit 24.1
MINUTES OF MEETING
OF THE BOARD OF DIRECTORS
OF
COMMUNITY TRUST BANCORP, INC.
March 21, 1997
- --------------------------------------------------------------------------------
A meeting of the Board of Directors of Community Trust Bancorp, Inc., a
Kentucky corporation ("Corporation"), was held on March 21, 1997, at the
Corporation's principal offices. A majority of the Directors constituting a
quorum were present and attended the meeting. Burlin Coleman was appointed
Chairman of the Meeting and Jean R. Hale was appointed Secretary of the meeting.
The Chairman announced that the first order of business was the
consideration of the authorization of the issuance of subordinated debentures to
a Delaware statutory trust and the issuance by such trust of preferred trust
certificates to the public.
ISSUE OF SUBORDINATED DEBENTURES: FORMATION OF BUSINESS
-------------------------------------------------------
TRUST AND FILING OF REGISTRATION STATEMENTS
-------------------------------------------
RESOLVED, that the Corporation, through its duly appointed officers,
is hereby authorized and directed to issue up to $34,500,000
subordinated debentures ("Subordinated Debentures") to CTBI Preferred
Capital Trust, a Delaware statutory business trust (the "Trust") in
order to effectuate an issuance by the Trust of preferred trust
certificates ("Preferred Securities") to the public through the filing
of a Registration Statement on Form S-3 and Common Trust Certificates
to the Corporation; and
FURTHER RESOLVED, that the Board of Directors hereby authorizes and
approves the filing with the Securities and Exchange Commission (the
"Commission") in accordance with the Securities Act of 1933, as
amended (the "Securities Act"), and in conformity with the rules and
regulations thereunder, a registration statement on Form S-3 (the
"Registration Statement"), relating to the issuance and sale of up to
1,380,000 Preferred Securities by the Trust including to the Over-
Allotment Option, in substantially the form of the draft of the
Registration Statement dated as of this date, attached as an exhibit
<PAGE>
hereto, together with any such changes as the appropriate officer(s)
of the Corporation may deem necessary or advisable; and
FURTHER RESOLVED, that Richard M. Levy, the Executive Vice President-
Chief Financial Officer and Jean R. Hale, or either of them, are
hereby authorized and directed, for and on behalf of the Corporation,
to sign the Registration Statement, as changed or amended by the
officer signing it (said signing to be conclusive evidence that the
officers signing the Registration Statement consider such additions,
changes or deletions necessary or advisable); and
FURTHER RESOLVED, that each of the Directors of the Corporation is
hereby authorized to sign the Registration Statement (either on behalf
of the Corporation or as an officer or otherwise) through Richard M.
Levy or Jean R. Hale, as duly authorized attorney or attorneys-in-
fact; and
FURTHER RESOLVED, that Richard M. Levy and Jean R. Hale authorized in
the foregoing resolution to execute the Registration Statement are, or
either of them, hereby authorized and empowered to execute in person
or through any one of more of such authorized attorneys, on behalf of
the Corporation and individually as an officer, such amendments to the
Registration Statement as may be required or may be deemed by such
person to be advisable, including any post-effective amendment, and to
cause the same to be filed with the Commission; and
FURTHER RESOLVED, that Richard M. Levy and Jean R. Hale authorized in
the foregoing resolution to execute the Registration Statement are, or
either of them, hereby authorized and empowered to execute in person
or through any one of more of such authorized attorneys, on behalf of
the Trust and individually as an officer, such amendments to the
Registration Statement as may be required or may be deemed by such
person to be advisable, including any post-effective amendment, and to
cause the same to be filed with the Commission; and
FURTHER RESOLVED, that the appropriate officer(s) of the Corporation
and its counsel, Greenebaum Doll & McDonald PLLC, are authorized to
appear on behalf of the Corporation and the Trust before the
Commission with respect to any matter relating to the Registration
Statement and any amendments thereto; and
2
<PAGE>
FURTHER RESOLVED, that the appropriate officer(s) of the Corporation
are hereby authorized to prepare and file a Form 8-A with the
Commission registering the Preferred Securities under the Securities
Exchange Act of 1934 on behalf of the Trust; and
FURTHER RESOLVED, that the form of power of attorney set forth in the
Registration Statement is hereby approved for use in connection with
the Registration Statement and any amendments thereto; and
FURTHER RESOLVED, that the President and Chief Executive Officer is
hereby designated as the Corporation's agent for service with respect
to the Registration Statement (including all amendments thereto) with
all power provided in the rules and regulations of the Commission with
respect to agents for service; and
FURTHER RESOLVED, that the officers of the Corporation are hereby
authorized and directed to take all additional actions and to execute
such additional documents that they, in their individual discretion,
deem necessary, appropriate or advisable to effect the registration of
the Preferred Securities with the Commission; and
FURTHER RESOLVED, that the Board of Directors hereby authorizes and
directs the appropriate officers of the Corporation to take all
actions necessary or appropriate to cause the Preferred Securities to
be included in the National Association of Securities Dealers
Automated Quotation System; and
FURTHER RESOLVED, that it is advisable and in the best interest of the
Corporation that the Preferred Securities be qualified or registered
for sale in various jurisdictions, and that the President and Chief
Executive Officer, or Executive Vice President-Chief Financial
Officer, Secretary and Treasurer or either of them, is hereby
authorized to determine the jurisdictions in which the appropriate
action should be taken to qualify or register for sale all or part of
the Preferred Securities as such officer or officers may deem
advisable; and
FURTHER RESOLVED, that such officers are hereby authorized to perform
on behalf of the Corporation and the Trust any and all acts as they
may deem necessary or advisable in order to comply with the applicable
laws of any such jurisdiction, and in conjunction therewith to execute
and file all requisite papers and documents, including but not limited
to, applications, reports, surety bonds, irrevocable consents and
appointments or attorneys for service of process, and that the
execution
3
<PAGE>
by such officers of any such papers or documents or the doing by them
of any act in connection with the foregoing matter shall establish
conclusively their authority therefrom the Corporation and the
approval and ratification by the Corporation of the papers and
documents so executed and the actions so taken; and
FURTHER RESOLVED, that the Chairman and Chief Executive Officer,
Executive Vice President, the Secretary, the Assistant Secretary, or
any of them is hereby authorized and directed to execute, acknowledge,
verify, deliver, file or publish in the name and on behalf of the
Corporation and under its corporate seal, attested by its Secretary,
Assistant Secretary or otherwise, any and all applications, reports,
statements, issuer's covenants, resolutions, consents to service of
process, powers of attorney, appointments, designations, waivers of
hearing, bonds and such other documents and instruments as may be
required appropriate or advisable under the Blue Sky Laws or the
security acts of such jurisdictions as such officers or any of one or
more them may deem necessary or appropriate or advisable for the
purpose of registering, qualifying, exempting or permitting the
issuance or sale by the Corporation and the Trust, or the sale by the
Underwriters, brokers and dealers of the Preferred Securities and the
Subordinated Debentures, as applicable, and for the purposes of
qualifying registering, licensing or exempting the Corporation as a
broker/dealer in connection with the sale of the Shares and to make
any and all payments of examination, filing registration or other
fees, costs and expenses and to take any and all further action which
such officers or any one or more of them deem necessary or advisable
in connection with the foregoing; and
FURTHER RESOLVED, that the Board of Directors does hereby adopt as and
for a resolution of the Board each resolution required by any state or
other jurisdiction to be filed with it in connection with such
registration or qualification (or exemption therefrom) as having been
adopted by it in connection with any documents or instruments referred
to in the preceding resolution if (i) in the opinion of the officers
of the Corporation such resolution is necessary or appropriate and
(ii) the Secretary or any Assistant Secretary of the Corporation
evidences such adoption by inserting in the minute book of the
Corporation a copy of such resolution, which will thereupon be deemed
to have been adopted by the Board of Directors with the same force and
effect as if presented to this meeting and inserted in the minutes
thereof; and
FURTHER RESOLVED, that the appropriate officer(s) of the Corporation
are hereby authorized, in the name and on behalf of the Corporation
and the Trust, to take all other action which may be
4
<PAGE>
necessary or advisable in order to effect the registration of the
Shares under the Blue Sky Laws of the various jurisdictions and with
the National Association of Securities Dealers, Inc., and in
connection therewith to execute, acknowledge, verify, deliver, file,
or cause to be published any Registration Statements, applications,
reports, issuer's covenants and other papers or instruments that may
be required under such law, and to take any further action which they
may deem necessary or advisable in order to maintain such registration
for as long as they deem necessary or required by law.
APPOINTMENT OF TRANSFER AGENT AND REGISTRAR
-------------------------------------------
RESOLVED, that The Depository Trust Company, New York, New York
("DTC"), be and hereby is appointed sole Closing Agent, Registrar and
Transfer Agent with respect to the Preferred Securities, to act in
accordance with its general practice and with the regulations of DTC
relating to the transfer and registration of the Preferred Securities
in effect from time to time, a copy of such regulations as currently
in effect being attached as an exhibit hereto; and
FURTHER RESOLVED, that the proper officers of the Corporation be, and
they hereby are, authorized and directed for and on behalf of the
Corporation to execute and deliver to DTC such certificates and
documents as may be required by DTC in connection with the foregoing
agency appointment, and to take such action as may be necessary or
proper in order to consummate the agency appointment authorized
herein.
APPROVAL OF PUBLIC OFFERING
---------------------------
RESOLVED, that the Board of Directors hereby ratifies, approves and
confirms the execution by Richard M. Levy, the Executive Vice
President and Chief Financial Officer of the Corporation, of a letter
of intent with Morgan Keegan & Company, Inc. in connection with a
proposed public offering of the Preferred Securities by the Trust (the
"Offering"); and
FURTHER RESOLVED, that the Trust may issue, sell and deliver to a
group of underwriters represented by Morgan Keegan & Company, Inc. and
J.J.B. Hilliard, W.L. Lyons, Inc., (the "Underwriters"), a number of
shares of Preferred Securities to be determined by the President and
Chief Executive Officer, which number shall be approximately 1,200,000
but not exceeding 25% of the Corporation's Tier I Capital
5
<PAGE>
(the "Shares"), together with an additional number of shares equal to
as much as 15% of the total number of shares in the Offering pursuant
to a thirty-day allotment option which the Corporation may grant to
the Underwriters (the "Over-Allotment Option"); and
FURTHER RESOLVED, that the proceeds of the Offering shall be used for
expansion through new branches and acquisitions, to fund growth in the
Corporation's indirect consumer loan portfolio and for general
corporate purposes; and
FURTHER RESOLVED, that the Executive Vice President and Chief
Financial Officer of the Corporation, be and hereby is, authorized and
directed, for and on behalf of the Corporation and the Trust, to
determine the underwriting commission and the coupon rate at which the
Preferred Securities will be offered to the public.
AUTHORIZATION TO ENTER INTO
---------------------------
UNDERWRITING AGREEMENT
----------------------
RESOLVED, that the Corporation enter into an underwriting agreement
(the "Underwriting Agreement") with the Underwriters, substantially in
the form attached as an exhibit hereto, together with such changes
therein that the Executive Vice President and Chief Financial Officer,
in his sole discretion, may deem necessary, appropriate or advisable
in connection therewith; and
FURTHER RESOLVED, that the Executive Vice President and the Chief
Financial Officer, is hereby authorized and directed to execute and
deliver, for and on behalf of the Corporation, the Underwriting
Agreement and such other related documents, instruments or agreements
that such officer, in his sole discretion, deems necessary,
appropriate or advisable in connection therewith.
The foregoing resolutions have been duly adopted by the Board of Directors.
The Chairman stated that there was no further business to come before the
meeting and upon motion duly made, seconded and carried, the meeting was
adjourned.
/s/ Jean R. Hale
------------------------------
Secretary of the Meeting
APPROVED:
/s/ Burlin Coleman
- ----------------------------,
Chairman of the Meeting
6
<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) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
COMMUNITY TRUST BANCORP, INC.
(Exact name of obligor as specified in its charter)
KENTUCKY 61-0979818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 2947, 208 NORTH MAYO TRAIL
PIKEVILLE, KENTUCKY, 41501
(Address of principal executive offices) (Zip Code)
---------------------
% SUBORDINATED DEBENTURES
(Title of indenture securities)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO WHICH
IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN EFFECT.
A copy of the Articles of Association of the trustee, as now in
effect, is on file with the Securities and Exchange Commission as
Exhibit 1 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the Registration
Statement of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee to
commence business was necessary or issued is on file with the
Securities and Exchange Commission as Exhibit 2 to Amendment No.
1 to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No. 22-17940) and is incorporated herein by reference
thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE TRUST
POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE DOCUMENTS
SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise corporate
trust powers is on file with the Securities and Exchange
Commission as Exhibit 3 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4 to
the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated herein by
reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 21st day of March, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
-------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by COMMUNITY TRUST
BANCORP, INC. of its % SUBORDINATED DEBENTURES, we hereby consent that reports
of examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ PAUL D. ALLEN
-------------------------------
PAUL D. ALLEN
VICE PRESIDENT
DATED: MARCH 21, 1997
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coin................ 1,561,409
Interest-bearing balances......................................... 7,562,240
Securities............................................................. 9,388,513
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary............................... 5,622,962
Loans and lease financing receivables:
Loans and leases, net of unearned income ......................... 4,858,187
Allowance for loan and lease losses............................... 72,614
Loans and leases, net of unearned income and allowances........... 4,785,573
Assets held in trading accounts........................................ 874,700
Premises and fixed assets.............................................. 383,955
Other real estate owned................................................ 870
Investments in unconsolidated subsidiaries............................. 93,621
Customers' liability to this bank on acceptances outstanding........... 35,022
Intangible assets...................................................... 148,190
Other assets........................................................... 932,673
----------
Total assets........................................................... 31,389,728
==========
LIABILITIES
Deposits:
In domestic offices............................................... 8,508,096
Noninterest-bearing............................................... 6,435,131
Interest-bearing.................................................. 2,072,965
In foreign offices and Edge subsidiary............................ 11,395,724
Noninterest-bearing............................................... 27,508
Interest-bearing.................................................. 11,368,216
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary............................... 7,518,222
Demand notes issued to the U.S. Treasury and Trading Liabilities....... 733,935
Other borrowed money................................................... 650,578
Bank's liability on acceptances executed and outstanding............... 35,022
Other liabilities...................................................... 770,029
----------
Total liabilities...................................................... 29,611,606
----------
EQUITY CAPITAL
Common stock........................................................... 29,931
Surplus................................................................ 358,146
Undivided profits...................................................... 1,389,720
Cumulative foreign currency translation adjustments.................... 325
----------
Total equity capital................................................... 1,778,122
----------
Total liabilities and equity capital................................... 31,389,728
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<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) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
---------------------
COMMUNITY TRUST BANCORP, INC.
(Exact name of obligor as specified in its charter)
KENTUCKY 61-0979818
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 2947, 208 NORTH MAYO TRAIL
PIKEVILLE, KENTUCKY, 41501
(Address of principal executive offices) (Zip Code)
---------------------
GUARANTEE
(Title of indenture securities)
<PAGE>
GENERAL
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISORY AUTHORITY TO
WHICH IT IS SUBJECT.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston,
Massachusetts.
Board of Governors of the Federal Reserve System,
Washington, D.C., Federal Deposit Insurance Corporation,
Washington, D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
The obligor is not an affiliate of the trustee or of its parent,
State Street Boston Corporation.
(See note on page 2.)
ITEM 3. THROUGH ITEM 15. NOT APPLICABLE.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
1. A COPY OF THE ARTICLES OF ASSOCIATION OF THE TRUSTEE AS NOW IN
EFFECT.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement
of Eligibility and Qualification of Trustee (Form T-1) filed
with the Registration Statement of Morse Shoe, Inc. (File
No.22-17940) and is incorporated herein by reference
thereto.
2. A COPY OF THE CERTIFICATE OF AUTHORITY OF THE TRUSTEE TO COMMENCE
BUSINESS, IF NOT CONTAINED IN THE ARTICLES OF ASSOCIATION.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the
trustee to commence business was necessary or issued is on
file with the Securities and Exchange Commission as Exhibit
2 to Amendment No. 1 to the Statement of Eligibility and
Qualification of Trustee (Form T-1) filed with the
Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
3. A COPY OF THE AUTHORIZATION OF THE TRUSTEE TO EXERCISE CORPORATE
TRUST POWERS, IF SUCH AUTHORIZATION IS NOT CONTAINED IN THE
DOCUMENTS SPECIFIED IN PARAGRAPH (1) OR (2), ABOVE.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe,
Inc. (File No.) 22-17940) and is incorporated herein by
reference thereto.
4. A COPY OF THE EXISTING BY-LAWS OF THE TRUSTEE, OR INSTRUMENTS
CORRESPONDING THERETO.
A copy of the by-laws of the trustee, as now in effect, is
on file with the Securities and Exchange Commission as
Exhibit 4 to the Statement of Eligibility and Qualification
of Trustee (Form T-1) filed with the Registration Statement
of Eastern Edison Company (File No. 33-37823) and is
incorporated herein by reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(b) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee published
pursuant to law or the requirements of its supervising or
examining authority is annexed hereto as Exhibit 7 and made a
part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 21st day of March, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
---------------------------
Paul D. Allen
Vice President
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by COMMUNITY TRUST
BANCORP, INC. of its GUARANTEE, we hereby consent that reports of examination
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
---------------------------
Paul D. Allen
Vice President
Dated: March 21, 1997
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................ 1,561,409
Interest-bearing balances......................................... 7,562,240
Securities............................................................. 9,388,513
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the bank and its
Edge subsidiary................................................... 5,622,962
Loans and lease financing receivables:
Loans and leases, net of unearned income .......................... 4,858,187
Allowance for loan and lease losses............................... 72,614
Loans and leases, net of unearned income and allowances........... 4,785,573
Assets held in trading accounts........................................ 874,700
Premises and fixed assets.............................................. 383,955
Other real estate owned................................................ 870
Investments in unconsolidated subsidiaries............................. 93,621
Customers' liability to this bank on acceptances outstanding........... 35,022
Intangible assets...................................................... 148,190
Other assets........................................................... 932,673
----------
Total assets........................................................... 31,389,728
==========
LIABILITIES
Deposits:
In domestic offices............................................... 8,508,096
Noninterest-bearing....................................... 6,435,131
Interest-bearing.......................................... 2,072,965
In foreign offices and Edge subsidiary............................ 11,395,724
Noninterest-bearing....................................... 27,508
Interest-bearing.......................................... 11,368,216
Federal funds purchased and securities sold under agrements to
repurchase in domestic offices of the bank and of its
Edge subsidiary................................................... 7,518,222
Demand notes issued to the U.S. Treasury and Trading Liabilities....... 733,935
Other borrowed money................................................... 650,578
Bank's liability on acceptances executed and outstanding............... 35,022
Other liabilities...................................................... 770,029
----------
Total liabilities...................................................... 29,611,606
----------
EQUITY CAPITAL
Common stock........................................................... 29,931
Surplus................................................................ 358,146
Undivided profits...................................................... 1,389,720
Cumulative foreign currency translation adjustments.................... 325
----------
Total equity capital................................................... 1,778,122
----------
Total liabilities and equity capital................................... 31,389,728
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above
named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best of my
knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of
our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System
and is true and correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
<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) __
STATE STREET BANK AND TRUST COMPANY
(Exact name of trustee as specified in its charter)
Massachusetts 04-1867445
(Jurisdiction of incorporation or (I.R.S. Employer
organization if not a U.S. national bank) Identification No.)
225 Franklin Street, Boston, Massachusetts 02110
(Address of principal executive offices) (Zip Code)
John R. Towers, Esq. Senior Vice President and Corporate Secretary
225 Franklin Street, Boston, Massachusetts 02110
(617) 654-3253
(Name, address and telephone number of agent for service)
_____________________
CTBI PREFERRED CAPITAL TRUST
(Exact name of obligor as specified in its charter)
DELAWARE XX-XXXXXXX
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 2947, 208 NORTH MAYO TRAIL
PIKEVILLE, KENTUCKY, 41501
(Address of principal executive offices) (Zip Code)
____________________
PREFERRED SECURITIES
(Title of indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervisory authority to
which it is subject.
Department of Banking and Insurance of The Commonwealth of
Massachusetts, 100 Cambridge Street, Boston, Massachusetts.
Board of Governors of the Federal Reserve System, Washington,
D.C., Federal Deposit Insurance Corporation, Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers.
Trustee is authorized to exercise corporate trust powers.
Item 2. Affiliations With Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee or of its
parent, State Street Boston Corporation.
(See note on page 2.)
Item 3. through Item 15. Not applicable.
Item 16. List of Exhibits.
List below all exhibits filed as part of this statement of
eligibility.
1. A copy of the articles of association of the trustee as now in
effect.
A copy of the Articles of Association of the trustee, as now
in effect, is on file with the Securities and Exchange
Commission as Exhibit 1 to Amendment No. 1 to the Statement of
Eligibility and Qualification of Trustee (Form T-1) filed with
the Registration Statement of Morse Shoe, Inc. (File No. 22-
17940) and is incorporated herein by reference thereto.
2. A copy of the certificate of authority of the trustee to commence
business, if not contained in the articles of association.
A copy of a Statement from the Commissioner of Banks of
Massachusetts that no certificate of authority for the trustee
to commence business was necessary or issued is on file with
the Securities and Exchange Commission as Exhibit 2 to
Amendment No. 1 to the Statement of Eligibility Qualification
of Trustee (Form T-1) filed with the Registration Statement
and of Morse Shoe, Inc. (File No. 22-17940) and is
incorporated herein by reference thereto.
3. A copy of the authorization of the trustee to exercise corporate
trust powers, if such authorization is not contained in the documents
specified in paragraph (1) or (2), above.
A copy of the authorization of the trustee to exercise
corporate trust powers is on file with the Securities and
Exchange Commission as Exhibit 3 to Amendment No. 1 to the
Statement of Eligibility and Qualification of Trustee (Form
T-1) filed with the Registration Statement of Morse Shoe, Inc.
(File No. 22-17940) and is incorporated herein by reference
thereto.
4. A copy of the existing by-laws of the trustee, or instruments
corresponding thereto.
A copy of the by-laws of the trustee, as now in effect, is on
file with the Securities and Exchange Commission as Exhibit 4
to the Statement of Eligibility and Qualification of Trustee
(Form T-1) filed with the Registration Statement of Eastern
Edison Company (File No. 33-37823) and is incorporated herein
by reference thereto.
1
<PAGE>
5. A COPY OF EACH INDENTURE REFERRED TO IN ITEM 4. IF THE OBLIGOR IS IN
DEFAULT.
Not applicable.
6. THE CONSENTS OF UNITED STATES INSTITUTIONAL TRUSTEES REQUIRED BY
SECTION 321(B) OF THE ACT.
The consent of the trustee required by Section 321(b) of the Act
is annexed hereto as Exhibit 6 and made a part hereof.
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.
A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority is annexed
hereto as Exhibit 7 and made a part hereof.
NOTES
In answering any item of this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor or any underwriter for
the obligor, the trustee has relied upon information furnished to it by the
obligor and the underwriters, and the trustee disclaims responsibility for the
accuracy or completeness of such information.
The answer furnished to Item 2. of this statement will be amended, if
necessary, to reflect any facts which differ from those stated and which would
have been required to be stated if known at the date hereof.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, State Street Bank and Trust Company, a corporation
organized and existing under the laws of The Commonwealth of Massachusetts, has
duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of Boston and The
Commonwealth of Massachusetts, on the 21st day of March, 1997.
STATE STREET BANK AND TRUST COMPANY
By: /s/ Paul D. Allen
-------------------------------
PAUL D. ALLEN
VICE PRESIDENT
2
<PAGE>
EXHIBIT 6
CONSENT OF THE TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the proposed issuance by CTBI PREFERRED
CAPITAL TRUST of its PREFERRED SECURITIES, we hereby consent that reports of
examination by Federal, State, Territorial or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
STATE STREET BANK AND TRUST COMPANY
By: /S/ PAUL D. ALLEN
_________________________
PAUL D. ALLEN
VICE PRESIDENT
DATED: MARCH 21, 1997
3
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of State Street Bank and Trust Company of
Boston, Massachusetts and foreign and domestic subsidiaries, a state banking
institution organized and operating under the banking laws of this commonwealth
and a member of the Federal Reserve System, at the close of business December
31, 1996, published in accordance with a call made by the Federal Reserve Bank
of this District pursuant to the provisions of the Federal Reserve Act and in
accordance with a call made by the Commissioner of Banks under General Laws,
Chapter 172, Section 22(a).
<TABLE>
<CAPTION>
Thousands of
ASSETS Dollars
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin................... 1,561,409
Interest-bearing balances............................................ 7,562,240
Securities............................................................. 9,388,513
Federal funds sold and securities purchased
under agreements to resell in domestic offices
of the bank and its Edge subsidiary.................................. 5,622,962
Loans and lease financing receivables:
Loans and leases, net of unearned income ...... 4,858,187
Allowance for loan and lease losses............ 72,614
Loans and leases, net of unearned income and allowances.............. 4,785,573
Assets held in trading accounts........................................ 874,700
Premises and fixed assets.............................................. 383,955
Other real estate owned................................................ 870
Investments in unconsolidated subsidiaries............................. 93,621
Customers' liability to this bank on acceptances outstanding........... 35,022
Intangible assets...................................................... 148,190
Other assets........................................................... 932,673
----------
Total assets........................................................... 31,389,728
==========
LIABILITIES
Deposits:
In domestic offices.................................................. 8,508,096
Noninterest-bearing.......................... 6,435,131
Interest-bearing............................. 2,072,965
In foreign offices and Edge subsidiary............................... 11,395,724
Noninterest-bearing.......................... 27,508
Interest-bearing............................. 11,368,216
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge subsidiary.................................. 7,518,222
Demand notes issued to the U.S. Treasury and Trading Liabilities....... 733,935
Other borrowed money................................................... 650,578
Bank's liability on acceptances executed and outstanding............... 35,022
Other liabilities...................................................... 770,029
----------
Total liabilities...................................................... 29,611,606
----------
EQUITY CAPITAL
Common stock........................................................... 29,931
Surplus................................................................ 358,146
Undivided profits...................................................... 1,389,720
Cumulative foreign currency translation adjustments.................... 325
----------
Total equity capital................................................... 1,778,122
----------
Total liabilities and equity capital................................... 31,389,728
==========
</TABLE>
4
<PAGE>
I, Rex S. Schuette, Senior Vice President and Comptroller of the above named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Rex S. Schuette
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
David A. Spina
Marshall N. Carter
Charles F. Kaye
5
