<PAGE> 1
As filed with the Securities and Exchange Commission on June 5, 1998
Registration Nos. 333-53579, 333-53579-01, 333-53579-02,
333-53579-03, 333-53579-04, and 333-53579-05
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
Amendment No. 1
to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
------------------------------------
HUNTINGTON CAPITAL II
HUNTINGTON CAPITAL III
HUNTINGTON CAPITAL IV
HUNTINGTON BANCSHARES HUNTINGTON CAPITAL V
INCORPORATED HUNTINGTON CAPITAL VI
(Exact name of Registrant (Exact name of each Registrant as
as specified in its charter) specified in its Declaration of Trust)
Maryland Delaware
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
31-0724920 [Applied For]
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
------------------------------------
Huntington Center c/o Huntington Bancshares Incorporated
41 South High Street Huntington Center
Columbus, Ohio 43287 41 South High Street; Columbus, Ohio 43287
(614) 480-8300 (614) 480-8300
(Address, including zip code, (Address, including zip code, and telephone
and telephone number, including number, including area code, of each
area code, of Registrant's Registrant's principal executive offices)
principal executive offices)
------------------------------------
Richard A. Cheap, Esq.
General Counsel and Secretary
Huntington Bancshares Incorporated
Huntington Center
41 South High Street; Columbus, Ohio 43287
(614) 480-4647
(Name, address, including zip code, and telephone
number, including area code, of agent for service of each Registrant)
------------------------------------
Copies of Correspondence to:
Mary Beth M. Clary Mark J. Menting
Porter, Wright, Morris & Arthur Sullivan & Cromwell
4501 Tamiami Trail North, Suite 400 125 Broad Street
Naples, Florida 34103-3013 New York, New York 10004
(941) 436-2959 (212) 558-4000
------------------------------------
Approximate date of commencement of proposed sale of the securities 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, check the following box.
[ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration 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. [ ]
<PAGE> 2
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A)
MAY DETERMINE.
<PAGE> 3
(Red Herring language appears at 90 degrees and reads as follows)
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 STATE.
(Subject to Completion) Dated , 1998
PROSPECTUS SUPPLEMENT
TO PROSPECTUS, DATED , 1998
, , CAPITAL SECURITIES
HUNTINGTON CAPITAL II
[ %/FLOATING] CAPITAL SECURITIES, SERIES B
(LIQUIDATION AMOUNT $ PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED TO THE EXTENT DESCRIBED HEREIN BY
HUNTINGTON BANCSHARES INCORPORATED
The [ %/Floating] Capital Securities, Series B (the "Series B Capital
Securities"), offered hereby represent beneficial interests in Huntington
Capital II, a statutory business trust formed under the laws of the State of
Delaware (the "Series B Trust"). Huntington Bancshares Incorporated, a Maryland
corporation (the "Corporation"), will be the owner of all of the beneficial
interests represented by common securities of the Series B Trust (the "Series B
Common Securities" and, collectively with the Series B Capital Securities, the
"Series B Securities"). The Series B Trust exists for the sole purpose of
issuing the Series B Securities and investing the proceeds of the Series B
Securities in [__%/Floating Rate] Junior Subordinated Debentures, Series B (the
"Series B Subordinated Debentures") to be issued by the Corporation.
(Continued on next page)
SEE "RISK FACTORS" BEGINNING ON PAGE S- OF THIS PROSPECTUS SUPPLEMENT FOR
CERTAIN INFORMATION RELEVANT TO AN INVESTMENT IN THE SERIES B CAPITAL
SECURITIES.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT
OR THE PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
<TABLE>
<CAPTION>
UNDERWRITING COMMISSIONS PROCEEDS TO THE
PRICE TO PUBLIC AND DISCOUNT (1)(2) SERIES B TRUST(2)(3)
<S> <C> <C> <C>
Per Series B Capital Security............. $ $ $
Total..................................... $ $ $
</TABLE>
(1) The Series B Trust and the Corporation have each agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
<PAGE> 4
(2) In view of the fact that the proceeds of the sale of the Series B Capital
Securities will be invested in the Series B Subordinated Debentures, the
Corporation has agreed to pay to the Underwriters as compensation for
their arranging the investment therein of such proceeds $ per
Series B Capital Security (or $ in the aggregate). See
"Underwriting."
(3) Before deduction of expenses of the offering, payable by the Corporation,
which are estimated to be $ .
The Series B Capital Securities are offered, subject to prior sale, when,
as, and if accepted by the Underwriters and subject to approval of certain legal
matters by underwriters' counsel. It is expected that delivery of the Series B
Capital Securities will be made in book-entry form through the book-entry
facilities of The Depository Trust Company in New York, New York, on or about
, 199 , against payment therefor in immediately available funds.
, 19
<PAGE> 5
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SERIES B
CAPITAL SECURITIES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE
OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
(cover page continued)
The Chase Manhattan Corporation is the Property Trustee of the Series B
Trust. The Series B Subordinated Debentures will mature on ______________, 20__
(the "Stated Maturity"). Each holder of a Series B Capital Security will have
the right to receive $____ per Series B Capital Security in the event of
liquidation (the "Liquidation Amount") and at maturity. The Series B Capital
Securities will have a preference under certain circumstances with respect to
cash distributions and amounts payable on liquidation, redemption, or otherwise
over the Series B Common Securities. See "Description of the Capital Securities
- -- Subordination of Common Securities" in the accompanying Prospectus.
The Series B Capital Securities will be represented by one or more global
securities registered in the name of a nominee of The Depository Trust Company,
as depositary (the "Depository"). Beneficial interests in the global securities
will be shown on, and transfer of such securities will be effected only through
records maintained by the Depository and its participants. Except as described
under "Description of the Capital Securities" in the accompanying Prospectus,
certificates for the Series B Capital Securities will not be issued and owners
of beneficial interests in global securities will not be considered holders of
the Series B Capital Securities. See also "Book-Entry Issuance" in the
accompanying Prospectus.
Holders of the Series B Capital Securities will be entitled to receive
cumulative cash distributions accruing from the date of original issuance and
payable semi-annually in arrears on the last day of [___________ and
___________,] of each year, commencing _____________, 19__, at [a variable
annual rate equal to ___________ (as defined in this Prospectus Supplement) plus
____%/ the annual rate of ____%] on the Liquidation Amount of $_____ per Series
B Capital Security ("Distributions"). The final Distributions will be payable on
_____________, 20__. The Distribution rate and the Distribution payment dates
and other payment dates for the Series B Capital Securities correspond to the
interest rate and interest payment dates and other payment dates on the Series B
Subordinated Debentures, which are the sole assets of the Series B Trust.
The Corporation has guaranteed the payment of Distributions and payments on
liquidation of the Series B Trust or redemption of the Series B Capital
Securities, but only in each case to the extent of funds held by the Series B
Trust, as described in this Prospectus Supplement. See also "Description of the
Guarantees" in the accompanying Prospectus. If the Corporation does not make
interest payments on the Series B Subordinated Debentures held by the Series B
Trust, the Series B Trust will have insufficient funds to pay Distributions on
the Series B Capital Securities. The Corporation's obligations under the Series
B Guarantee (as defined below), taken together with its obligations under the
Series B Subordinated Debentures, the Series B Declaration, and the Indenture
(each as defined below), including its obligation to pay all costs, expenses,
and liabilities of the Series B Trust (other than with respect to the Series B
Capital Securities), constitute a full and unconditional guarantee of all of the
Series B Trust's obligations under the Series B Capital Securities. See
"Relationship Among the Capital Securities, the Corresponding Subordinated
Debentures, and the Guarantees" in the accompanying Prospectus. The obligations
of the Corporation under the Series B Guarantee and the Series B Subordinated
Debentures are unsecured and subordinate and junior in right of payment to all
Senior Indebtedness (as defined in "Description of the Subordinated Debentures
- -- Subordination" in the accompanying Prospectus) of the Corporation, are
structurally subordinated to all liabilities and obligations of the
Corporation's subsidiaries, and will be pari passu with $200 million of
obligations of the Corporation associated with the Floating Rate Capital
Securities issued by Huntington Capital I (the "Outstanding Capital
Securities"). As of _______, 19__, approximately $______ million aggregate
principal amount of Senior Indebtedness was outstanding, and the Corporation's
subsidiaries had approximately $____ billion of indebtedness and other
liabilities (including $_____ billion of bank deposits). The terms of the Series
B Subordinated Debentures place no limitation on the amount of Senior
Indebtedness that may be incurred by the Corporation or on the amount of
liabilities and obligations of the Corporation's subsidiaries. See "Description
of the Subordinated Debentures -- Subordination" in the accompanying Prospectus.
S-2
<PAGE> 6
So long as no Indenture Event of Default (as defined in the accompanying
Prospectus) has occurred and is continuing, the Corporation has the right to
defer payment of interest on the Series B Subordinated Debentures at any time or
from time to time for a period not exceeding 10 consecutive semi-annual periods
with respect to each deferral period (each, an "Extension Period"), provided
that no Extension Period may extend beyond the Stated Maturity of the Series B
Subordinated Debentures. Upon the termination of any such Extension Period and
the payment of all amounts then due on any Interest Payment Date (as defined in
this Prospectus Supplement), the Corporation may elect to begin a new Extension
Period subject to the requirements set forth in the accompanying Prospectus.
Accordingly, there could be multiple Extension Periods of varying lengths
throughout the term of the Series B Subordinated Debentures.
If interest payments on the Series B Subordinated Debentures are so
deferred, distributions on the Series B Capital Securities also will be deferred
and, subject to certain exceptions described in the accompanying Prospectus, the
Corporation may not, and may not permit any subsidiary of the Corporation to:
o declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, the
Corporation's capital stock,
o make any payment of principal, interest, or premium, if any, on or
repay, repurchase, or redeem any debt securities that rank pari passu
with or junior to the Series B Subordinated Debentures,
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
if such guarantee ranks pari passu with or junior to the Series B
Subordinated Debentures.
During an Extension Period, interest on the Series B Subordinated
Debentures will continue to accrue (and the amount of Distributions to which
holders of the Series B Capital Securities are entitled will accumulate) at [a
variable rate equal to ___________ plus .___%/the rate of ___% per annum],
compounded semi-annually from the relevant payment date for such interest, and
holders of the Series B Capital Securities will be required to accrue interest
income for United States federal income tax purposes prior to receipt of the
cash related to such interest income. See "Certain Terms of the Series B
Subordinated Debentures -- Option to Defer Interest Payments" and "Certain
United States Federal Income Tax Consequences -- Interest Income and Original
Issue Discount."
The Series B Subordinated Debentures are redeemable prior to maturity at
the option of the Corporation, subject to the receipt of any necessary prior
approval from the Board of Governors of the Federal Reserve System (the "Federal
Reserve") (a) on or after ________, 20__, in whole or in part, at a redemption
price equal to the principal amount of the Series B Subordinated Debentures so
redeemed plus the accrued and unpaid interest on such Series B Subordinated
Debentures to the redemption date, or (b) at any time, in whole (but not in
part), upon the occurrence and continuation of a Special Event (as defined in
the Prospectus), at such redemption price. The Series B Capital Securities are
subject to mandatory redemption, in whole or in part, upon repayment of the
Series B Subordinated Debentures at the Stated Maturity or their earlier
redemption, in an amount equal to the amount of related Series B Subordinated
Debentures maturing or being redeemed and at a redemption price equal to the
redemption price of such Series B Subordinated Debentures, in each case plus
accumulated and unpaid Distributions to the date of redemption. See "Description
of the Capital Securities -- Redemption" in the accompanying Prospectus and
"Certain Terms of the Series B Capital Securities -- Redemption."
The Corporation will have the right at any time, subject to the receipt of
any necessary prior approval from the Federal Reserve, to dissolve the Series B
Trust and, after satisfaction of the claims of creditors of the Series B Trust,
if any, as provided by applicable law, cause the Series B Subordinated
Debentures to be distributed to the holders of the Series B Capital Securities
and the Series B Common Securities in liquidation of the Series B Trust. See
"Certain Terms of the Series B Capital Securities -- Liquidation of Series B
Trust and Distribution of Series B Subordinated Debentures."
In the event of the liquidation of the Series B Trust, after satisfaction
of the claims of creditors of the Series B Trust, if any, as required by
applicable law, the holders of the Series B Capital Securities will be entitled
to receive a Liquidation Amount of $_______ per Series B Capital Security plus
accumulated and unpaid Distributions to the date
S-3
<PAGE> 7
of payment, which may be in the form of a distribution of such amount in Series
B Subordinated Debentures as described above. If such Liquidation Amount can be
paid only in part because the Series B Trust has insufficient assets available
to pay in full the aggregate Liquidation Amount, then the amounts payable
directly by the Series B Trust on the Series B Capital Securities shall be paid
on a pro rata basis. The holder(s) of the Series B Common Securities will be
entitled to receive distributions upon any such liquidation pro rata with the
holders of the Series B Capital Securities, except that if an Indenture Event of
Default has occurred and is continuing, the Series B Capital Securities will
have a priority over the Series B Common Securities. "Description of the Capital
Securities -- Liquidation Distribution Upon Dissolution" in the accompanying
Prospectus.
If the purchaser is using for its purchase of the Series B Capital
Securities the assets of an employee benefit plan subject to Title I of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or of a
plan or individual retirement account subject to Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Tax Code" and any such employee benefit
plan, plan, or individual retirement account, an "ERISA Plan"), the purchase
shall constitute a representation by such person as to certain matters relating,
generally, to the relationship of the Corporation to the ERISA Plan and the
availability of an exemption from the prohibited transaction rules under ERISA
and the Tax Code. See "Benefit Plan Considerations."
The information in this Prospectus Supplement supplements and should be
read in conjunction with the information contained in the accompanying
Prospectus. As used in this Prospectus Supplement, (a) the "Indenture" means the
Junior Subordinated Indenture, as amended and supplemented from time to time,
between the Corporation and The Chase Manhattan Bank, as trustee (the "Indenture
Trustee"), and (b) the "Series B Declaration" means the Amended and Restated
Declaration relating to the Series B Trust among the Corporation, as Sponsor,
The Chase Manhattan Bank, as Property Trustee (the "Property Trustee"), Chase
Manhattan Bank Delaware, as Delaware Trustee (the "Delaware Trustee"), and the
Regular Trustees (as defined in the accompanying Prospectus) who are named in
the Series B Declaration (collectively, with the Property Trustee and Delaware
Trustee, the "Declaration Trustees"). Each of the other capitalized terms used
in this Prospectus Supplement and not otherwise defined in this Prospectus
Supplement has the meaning set forth in the accompanying Prospectus.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS, AND, IF GIVEN OR MADE,
SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE CORPORATION, THE SERIES B TRUST, OR THE UNDERWRITERS. NEITHER
THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS NOR
ANY SALES UNDER THESE DOCUMENTS SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR
THE SERIES B TRUST SINCE THE DATE OF THIS PROSPECTUS SUPPLEMENT OR THAT THE
INFORMATION CONTAINED IN THESE DOCUMENTS IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE. THIS PROSPECTUS SUPPLEMENT AND THE ACCOMPANYING PROSPECTUS DO NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SERIES B CAPITAL SECURITIES OR ANY OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY SUCH SERIES B CAPITAL SECURITIES IN ANY
CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
S-4
<PAGE> 8
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
PROSPECTUS SUPPLEMENT
<S> <C>
Cautionary Statement Concerning Forward-Looking Statements..................................................
Risk Factors................................................................................................
Huntington Capital II.......................................................................................
The Corporation.............................................................................................
Use of Proceeds.............................................................................................
Capitalization..............................................................................................
Ratio of Earnings to Fixed Charges..........................................................................
Accounting Treatment........................................................................................
Certain Terms of the Series B Capital Securities ...........................................................
Certain Terms of the Series B Subordinated Debentures.......................................................
Certain Terms of the Series B Guarantee.....................................................................
Certain United States Federal Income Tax Consequences ......................................................
Benefit Plan Considerations ................................................................................
Underwriting................................................................................................
Validity of Securities......................................................................................
PROSPECTUS
Available Information.......................................................................................
Incorporation of Certain Documents By Reference.............................................................
The Trusts..................................................................................................
The Corporation.............................................................................................
Use of Proceeds.............................................................................................
Description of the Subordinated Debentures..................................................................
Description of the Capital Securities .....................................................................
Description of the Guarantees...............................................................................
Relationship Among the Capital Securities, the Corresponding Subordinated
Debentures, and the Guarantees.........................................................................
Book-Entry Issuance ........................................................................................
Plan of Distribution........................................................................................
Validity of Securities......................................................................................
Experts.....................................................................................................
</TABLE>
----------------------
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE SERIES B CAPITAL
SECURITIES. SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH
THIS OFFERING, AND MAY BID FOR, AND PURCHASE, SUCH SERIES B CAPITAL SECURITIES
AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITERS." SUCH STABILIZING
TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
----------------------
S-5
<PAGE> 9
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
Certain statements contained in documents incorporated by reference in this
Prospectus Supplement and the accompanying Prospectus and certain other
statements made under the captions "Risk Factors," "The Corporation," and "Use
of Proceeds" contain forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that are subject to numerous
assumptions, risks, and uncertainties. Actual results could differ materially
from those contained in or implied by the Corporation's statements for a variety
of factors including: changes in economic conditions, movements in interest
rates, competitive pressures on product pricing and services, success and timing
of business strategies, the successful integration of acquired businesses, the
nature and extent of governmental actions and reforms, and extended disruption
of vital infrastructure. Such forward-looking statements should be viewed as
strategic objectives rather than absolute predictions of future performance.
S-6
<PAGE> 10
RISK FACTORS
Prospective purchasers of the Series B Capital Securities should carefully
review the information contained elsewhere in this Prospectus Supplement and the
accompanying Prospectus and should particularly consider the following matters.
In addition, because holders of Series B Capital Securities may receive Series B
Subordinated Debentures in exchange for such Series B Capital Securities upon
liquidation of the Series B Trust, prospective purchasers of Series B Capital
Securities also are making an investment decision with regard to the Series B
Subordinated Debentures and should carefully review all the information
regarding the Series B Subordinated Debentures.
Certain statements in this Prospectus Supplement and the accompanying
Prospectus and documents incorporated in these documents by reference are
forward-looking and are identified by the use of forward-looking words or
phrases such as "intended," "expects," is or are "expected," "anticipates," and
"anticipated." These forward-looking statements are based on the Corporation's
current expectations. To the extent any of the information contained or
incorporated by reference in this Prospectus constitutes a "forward-looking
statement" as defined in Section 21E(i)(1) of the Exchange Act, the risk factors
set forth below are cautionary statements identifying important factors that
could cause actual results to differ materially from those in the
forward-looking statement.
RANKING OF SUBORDINATED OBLIGATIONS UNDER THE SERIES B GUARANTEE AND THE SERIES
B SUBORDINATED DEBENTURES
The obligations of the Corporation under the Series B Guarantee issued by
the Corporation for the benefit of the holders of Series B Capital Securities
and under the Series B Subordinated Debentures are unsecured and rank
subordinate and junior in right of payment to all Senior Indebtedness of the
Corporation and pari passu with the Corporation's obligations associated with
the Outstanding Capital Securities. At _______,19__, the Senior Indebtedness of
the Corporation aggregated approximately $_____ million.
Because the Corporation is a holding company, the right of the Corporation
to participate in any distributions 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 that the
Corporation may itself be recognized as a creditor of that subsidiary. There are
various legal limitations on the extent to which certain of the Corporation's
subsidiaries may extend credit, pay dividends, or otherwise supply funds to, or
engage in transactions with, the Corporation. Accordingly, the Series B
Subordinated Debentures will effectively be subordinated to all existing and
future liabilities of the Corporation's subsidiaries and holders of the Series B
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Series B Subordinated Debentures.
The ability of the Series B Trust to pay amounts due on the Series B
Capital Securities is solely dependent upon the Corporation making payments on
the Series B Subordinated Debentures as and when required.
None of the Indenture, the Series B Guarantee, nor the Series B Declaration
places any limitation on the amount of secured or unsecured Senior Indebtedness
that may be incurred by the Corporation or on the amount of liabilities and
obligations of the Corporation's subsidiaries. The Corporation expects from time
to time to incur additional indebtedness constituting Senior Indebtedness. See
"Description of the Guarantees -- Status of the Guarantees" and "Description of
the Series B Subordinated Debentures -- Subordination" in the accompanying
Prospectus.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF SERIES B CAPITAL SECURITIES
If a Trust Enforcement Event (as defined in the accompanying Prospectus)
occurs and is continuing, then the holders of Series B Capital Securities would
rely on the enforcement by the Property Trustee of its rights as a holder of the
Series B Subordinated Debentures against the Corporation. The holders of a
majority in Liquidation Amount of the Series B Capital Securities will have the
right to direct the time, method, and place of conducting any proceeding
S-7
<PAGE> 11
for any remedy available to the Property Trustee or to direct the exercise of
any trust or power conferred upon the Property Trustee under the Series B
Declaration, including the right to direct the Property Trustee to exercise the
remedies available to it as a holder of the Series B Subordinated Debentures.
If the Property Trustee fails to enforce its rights with respect to the
Series B Subordinated Debentures held by the Series B Trust, any record holder
of Series B Capital Securities may, to the fullest extent permitted by law,
institute legal proceedings directly against the Corporation to enforce the
Property Trustee's rights under such Series B Subordinated Debentures without
first instituting any legal proceedings against such Property Trustee or any
other person or entity.
If the Corporation were to default on its obligation to pay amounts payable
under the Series B Subordinated Debentures, the Series B Trust would lack funds
for the payment of Distributions or amounts payable on redemption of the Series
B Capital Securities or otherwise, and, in such event, holders of the Series B
Capital Securities would not be able to rely upon the Series B Guarantee for
payment of such amounts. However, in the event the Corporation failed to pay
interest on or principal of the Series B Subordinated Debentures on the payment
date on which such payment is due and payable, then a holder of Series B Capital
Securities may institute a proceeding directly against the Corporation under the
Indenture for enforcement of payment to such holder of the interest on or
principal of Series B Subordinated Debentures having a principal amount equal to
the aggregate Liquidation Amount of the Series B Capital Securities of such
holder (a "Direct Action"). In connection with such Direct Action, the
Corporation will be subrogated to the rights of such holder of Series B Capital
Securities under the Series B Declaration to the extent of any payment made by
the Corporation to such holder of Series B Capital Securities in such Direct
Action.
Except as described in this Prospectus Supplement or the accompanying
Prospectus, holders of Series B Capital Securities will not be able to exercise
directly any other remedy available to the holders of Series B Subordinated
Debentures or assert directly any other rights in respect of the Series B
Subordinated Debentures. See "Description of the Capital Securities -- Trust
Enforcement Events," "Description of the Guarantees" and "Description of the
Subordinated Debentures -- Indenture Events of Default" and "-- Enforcement of
Certain Rights by Holders of Capital Securities" in the accompanying Prospectus.
The Series B Declaration provides that each holder of Series B Capital
Securities by acceptance of such Series B Capital Securities agrees to the
provisions of the Series B Guarantee and the Indenture.
OPTION TO DEFER INTEREST PAYMENTS; TAX CONSEQUENCES
So long as no Indenture Event of Default has occurred or is continuing, the
Corporation has the right under the Indenture to defer the payment of interest
on the Series B Subordinated Debentures at any time or from time to time for a
period not exceeding 10 consecutive semi-annual periods, provided that no
Extension Period may extend beyond the Stated Maturity of the Series B
Subordinated Debentures. As a consequence of any such deferral, Distributions on
the Series B Capital Securities by the Series B Trust will be deferred during
any such Extension Period but would continue to accumulate at [a variable annual
rate equal to ___________ plus ___%/the annual rate of ___%], compounded
semi-annually during any such Extension Period.
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, the
Corporation's capital stock, or
- make any payment of principal, interest, or premium, if any, on or
repay, repurchase, or redeem any debt securities that rank pari passu
with or junior to the Series B Subordinated Debentures, or
- make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the Corporation
if such guarantee ranks pari passu with or junior to the Series B
Subordinated Debentures.
S-8
<PAGE> 12
There are permitted exceptions to this covenant. See "Certain Terms of the
Series B Capital Securities -- Distributions."
Prior to the termination of any such Extension Period, the Corporation may
further extend the Extension Period, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Series B Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due on any Interest Payment Date, the
Corporation may elect to begin a new Extension Period subject to the above
requirements. See "Certain Terms of the Capital Securities -- Distributions" and
"Certain Terms of the Subordinated Debentures -- Option to Defer Interest
Payments."
Should the Corporation defer payment of interest on the Series B
Subordinated Debentures, a holder of Series B Capital Securities will be
required to accrue income (in the form of original issue discount ("OID") which
will include both stated interest and the de minimis OID on the Series B
Subordinated Debentures) for United States federal income tax purposes in
respect of its pro rata share of the Series B Subordinated Debentures held by
the Series B Trust. As a result, a holder of Series B Capital Securities will be
required to include such interest income in gross income for United States
federal income tax purposes in advance of the receipt of cash attributable to
such interest income, and will not receive the cash related to such income from
the Series B Trust if the holder disposes of the Series B Capital Securities
prior to the record date for the payment of Distributions with respect to such
Extension Period. See "Certain United States Federal Income Tax Consequences --
Interest Income and Original Issue Discount" and "-- Sales of Series B Capital
Securities."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series B
Subordinated Debentures. However, should the Corporation elect to exercise such
right in the future, the market price of the Series B Capital Securities is
likely to be adversely affected. A holder that disposes of its Series B Capital
Securities during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its Series B Capital
Securities. In addition, as a result of the Corporation's right to defer
interest payments, the market price of the Series B Capital Securities (which
represent preferred undivided beneficial interests in the Series B Subordinated
Debentures) may be more volatile than the market prices of other similar
securities where the issuer does not have such right to defer interest payments.
SPECIAL EVENT REDEMPTION; POSSIBLE TAX LAW CHANGES
Upon the occurrence and continuation of a Special Event, the Corporation
has the right, subject to any necessary prior approval of the Federal Reserve,
to redeem the Series B Subordinated Debentures in whole (but not in part) within
90 days following the occurrence of such Special Event and thereby cause a
mandatory redemption of the Series B Capital Securities and Series B Common
Securities. A "Special Event" means a Tax Event, a Regulatory Capital Event, or
an Investment Company Event (each as defined in the accompanying Prospectus on
page 12).
Prospective investors should be aware that Enron Corporation has filed a
petition in Tax Court challenging the proposed disallowance by the Internal
Revenue Service of the deduction of interest expense on securities issued by
Enron Corporation in 1993 and 1994 that are similar to, although different in a
number of respects from, the Series B Subordinated Debentures. It is possible
that a decision in that case would give rise to a Tax Event, which would permit
the Corporation to cause a redemption of the Capital Securities, as described
more fully under "Description of the Capital Securities - Redemption" in the
accompanying Prospectus.
Legislation was proposed by the United States Department of Treasury on
February 6, 1997, as part of President Clinton's Fiscal 1998 Budget Proposal
(the "1998 Budget Proposal") that contained a provision which, if adopted as
proposed, would have had the effect of prohibiting the Corporation from
deducting the interest paid on the Series B Subordinated Debentures which, in
turn, would have triggered a "Tax Event" (see below). On August 5, 1997, the
Taxpayer Relief Act of 1997 (the "Act") was signed by President Clinton. The Act
did not adopt the tax law changes that would have denied the interest deduction
as originally contained in the 1998 Budget Proposal. In addition, President
Clinton's Fiscal 1999 Budget Proposal does not contain a provision similar to
that contained in the 1998 Budget Proposal that would deny deductions for
interest paid on the Series B Subordinated Debentures.
Even though the most recent Executive and Congressional action does not
attempt to incorporate the provisions from the 1998 Budget Proposal concerning
the disallowance of interest deductions on long-term debt obligations not
treated as indebtedness on the issuer's balance sheet, there can be no assurance
that future legislative proposals or final legislation will not adversely affect
the ability of the Corporation to deduct interest on the Series B Subordinated
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<PAGE> 13
Debentures or otherwise affect the tax treatment of the transactions described
in this Prospectus Supplement and the Prospectus. Such legislation could give
rise to a Tax Event, which would permit the Corporation to cause a redemption of
the Series B Capital Securities, as described more fully in the accompanying
Prospectus under the caption "Description of the Capital Securities --
Redemption -- Special Event Redemption."
LIQUIDATION DISTRIBUTION OF SERIES B SUBORDINATED DEBENTURES
The Corporation will have the right at any time, subject to any necessary
prior approval of the Federal Reserve if such approval is then required under
applicable capital guidelines or policies of the Federal Reserve, to dissolve
the Series B Trust and, after satisfaction of the claims of creditors of the
Trust, if any, as provided by applicable law, cause the Series B Subordinated
Debentures to be distributed to the holders of the Series B Trust Securities in
liquidation of the Series B Trust.
Under current United States federal income tax law and interpretations of
such law and assuming, as expected, the Series B Trust is treated as a grantor
trust for United States federal income tax purposes and not an association
taxable as a corporation, a distribution by the Series B Trust of the Series B
Subordinated Debentures pursuant to a liquidation of the Series B Trust will not
be a taxable event to the Series B Trust or to holders of the Series B Capital
Securities, and will result in a holder of the Series B Capital Securities
receiving directly such holder's pro rata share of the Series B Subordinated
Debentures (previously held indirectly through the Series B Trust). If, however,
the liquidation of the Series B Trust were to occur because the Series B Trust
is subject to United States federal income tax with respect to income accrued or
received on the Series B Subordinated Debentures as a result of the occurrence
of a Tax Event or otherwise, the distribution of Series B Subordinated
Debentures to holders of the Series B Capital Securities by the Series B Trust
could be a taxable event to the Series B Trust and each such holder. In that
event, the holders of the Series B Capital Securities may be required to
recognize gain or loss as if they had exchanged their Series B Capital
Securities for the Series B Subordinated Debentures they receive upon the
liquidation of the Series B Trust. See "Certain United States Federal Income Tax
Consequences -- Distribution of the Series B Subordinated Debentures or Cash
Upon Liquidation of the Series B Trust."
There can be no assurance as to the market prices for Series B Capital
Securities or Series B Subordinated Debentures that may be distributed in
exchange for Series B Capital Securities if a liquidation of the Series B Trust
occurs. Accordingly, the Series B Capital Securities that an investor may
purchase, whether pursuant to the Offering or in the secondary market, or the
Series B Subordinated Debentures that a holder of Series B Capital Securities
may receive on liquidation of the Series B Trust, may trade at a discount to the
price that the investor paid to purchase the Series B Capital Securities.
Because holders of Series B Capital Securities may receive Series B Subordinated
Debentures upon a dissolution of the Trust, prospective purchasers of Series B
Capital Securities also are making an investment decision with regard to the
Series B Subordinated Debentures and should carefully review all the information
regarding the Series B Subordinated Debentures contained in this Prospectus
Supplement and the accompanying Prospectus. See "Certain Terms of the Series B
Subordinated Debentures" in this Prospectus Supplement and "Description of the
Subordinated Debenture" in the accompanying Prospectus.
LIMITED VOTING RIGHTS
Holders of Series B Capital Securities generally will have limited voting
rights relating only to the modification of the Series B Capital Securities and
certain other matters described in this Prospectus Supplement and the
accompanying Prospectus. Holders of Series B Capital Securities will not be
entitled to vote to appoint, remove, or replace any of the Declaration Trustees,
which voting rights are vested exclusively in the holder of the Series B Common
Securities, unless an Indenture Event of Default shall have occurred and is
continuing. If an Indenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in liquidation amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove, or replace the Regular Trustees, which voting
rights are
S-10
<PAGE> 14
vested exclusively in the Corporation as the holder of the Common Securities.
The Declaration Trustees and the Corporation may amend the Series B Declaration
without the consent of holders of Series B Capital Securities to ensure that the
Series B Trust will be classified as a grantor trust for United States federal
income tax purposes unless such action adversely affects the interests of such
holders. See "Description of the Capital Securities -- Voting Rights; Amendment
of the Declaration" and "-- Removal of Declaration Trustees" in the accompanying
Prospectus.
ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON TRANSFER
There is no existing market for the Series B Capital Securities and there
can be no assurance as to the liquidity of any markets that may develop for the
Series B Capital Securities, the ability of the holders to sell their Series B
Capital Securities, or at what price holders of the Series B Capital Securities
will be able to sell their Series B Capital Securities. Future trading prices of
the Series B Capital Securities will depend on many factors including, among
other things, prevailing interest rates, the Corporation's operating results,
and the market for similar securities. The Underwriters have advised the Series
B Trust and the Corporation that the Underwriters intend to make a market in the
Series B Capital Securities offered by this Prospectus; however, the
Underwriters are not obligated to do so, and any such market making activity
will be subject to the limits imposed by applicable law and may be discontinued
at any time without notice. Therefore, there can be no assurance that an active
market for the Series B Capital Securities will develop. If a trading market for
the Series B Capital Securities does develop, the Series B Capital Securities
may trade at a discount from their initial offering price depending upon
prevailing interest rates, the market for similar securities, the performance of
the Corporation, and other factors.
S-11
<PAGE> 15
HUNTINGTON CAPITAL II
The Series B Trust is a statutory business trust created under the Delaware
Business Trust Act, as amended, pursuant to the Series B Declaration and the
filing of a certificate of trust with the Secretary of State of the State of
Delaware on __________, 1998. The Corporation will acquire the Series B Common
Securities in an aggregate Liquidation Amount equal to $___________, which will
be 3% of the total capital of the Series B Trust.
The Series B Trust exists for the exclusive purpose of (a) issuing and
selling the Series B Trust Securities representing undivided beneficial
ownership interests in the assets of the Trust, (b) investing the gross proceeds
of the Series B Trust Securities in the Series B Subordinated Debentures, and
(c) engaging in only those other activities necessary or incidental thereto.
Accordingly, the assets of the Series B Trust will consist solely of the Series
B Subordinated Debentures.
The Trust's business and affairs are conducted by the Declaration Trustees,
consisting of three Regular Trustees, who are employees or officers of or who
are affiliated with the Corporation; The Chase Manhattan Bank, as Property
Trustee; and The Chase Manhattan Bank Delaware, which maintains its principal
place of business in the State of Delaware, as Delaware Trustee. The Chase
Manhattan Bank also acts as the Guarantee Trustee and the Indenture Trustee.
The location of the principal executive office of each Trust is c/o
Huntington Bancshares Incorporated, Huntington Center, 41 South High Street,
Columbus, Ohio 43287, and its telephone number is 614-480-8300. See "The Trusts"
in the accompanying Prospectus.
THE CORPORATION
Huntington was incorporated in Maryland in 1966 and is a multi-state bank
holding company headquartered in Columbus, Ohio. Its subsidiaries conduct a
full-service commercial and consumer banking business, engage in mortgage
banking, lease financing, trust services, discount brokerage services,
underwriting credit life and disability insurance, and issuing commercial paper
guaranteed by the Corporation, and provide other financial products and
services. See "The Corporation" in the accompanying Prospectus.
USE OF PROCEEDS
All of the proceeds from the sale of Series B Capital Securities will be
invested by the Series B Trust in Series B Subordinated Debentures. All of the
net proceeds to be received by the Corporation from the sale of the Series B
Subordinated Debentures will used for general corporate purposes, which may
include the repayment of existing indebtedness, investments in, or extensions of
credit to, its subsidiaries, the financing of possible acquisitions, and for
general working capital. Pending such use, the net proceeds may be temporarily
invested.
The Corporation is required by the Federal Reserve to maintain certain
levels of capital for bank regulatory purposes. In 1996, the Federal Reserve
announced that cumulative preferred securities having the characteristics of the
Series B Capital Securities could be included as Tier 1 capital for bank
holdings companies. Such Tier 1 Capital treatment, together with the
Corporation's ability to deduct, for federal income tax purposes, interest
payable on the Series B Subordinated Debentures, will provide the Corporation
with a more cost-effective means of obtaining capital for bank regulatory
purposes than other Tier 1 capital alternatives currently available to it.
S-12
<PAGE> 16
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation and its subsidiaries as of March 31, 1998, and as adjusted to give
effect to the consummation of the Offering and the Branch Acquisition (as
defined in the Prospectus). The following data should be read in conjunction
with the consolidated financial statements and notes to such financial
statements of the Corporation and its subsidiaries incorporated by reference in
the accompanying Prospectus. See "Incorporation of Certain Documents by
Reference" in the accompanying Prospectus. Also shown below are certain
consolidated regulatory capital ratios of the Corporation and its subsidiaries
at ___________, 1998, and as adjusted to give effect to the consummation of the
Offering.
<TABLE>
<CAPTION>
____________, 1998
---------------------------------
ACTUAL AS ADJUSTED
--------------- ---------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Long-term debt:
Direct obligations of the Corporation .............................
Obligations of the Corporation's subsidiaries .....................
--------------- ---------------
Total long-term debt ...........................................
--------------- ---------------
Company-obligated mandatorily redeemable preferred
capital securities of subsidiary trusts:
Huntington Capital I.................................... (1)
Huntington Capital II................................... (2)
--------------- ---------------
Total Company-obligated mandatorily redeemable
preferred capital securities of subsidiary trusts......
--------------- ---------------
Shareholders' equity:
Preferred stock - authorized 6,617,808 shares;
none outstanding
Common stock - without par value; authorized 300,000,000(3)
shares; issued and outstanding 193,279,797 shares..............
Treasury stock - 961,290 shares ...................................
Capital surplus....................................................
Net unrealized gains on securities available for sale .............
Retained earnings .................................................
--------------- ---------------
Total shareholders' equity .....................................
--------------- ---------------
Total capitalization ...........................................
=============== ===============
Consolidated regulatory capital ratios (4):
Tier 1 capital to risk-adjusted assets ............................
Total capital to risk-adjusted assets .............................
Tier 1 leverage ...................................................
</TABLE>
- --------------
(1) On January 31, 1997, Huntington Capital I issued $200 million of
company-obligated mandatorily redeemable preferred capital securities. All
of the common securities of Huntington Capital I are owned by the
Corporation. The proceeds from the issuance of such capital securities and
common securities were used by Huntington Capital I to purchase from the
Corporation $206.2 million of Floating Rate Junior Subordinated
Debentures. The subordinated debentures are the sole assets of Huntington
Capital I, bear interest at a variable annual rate equal to LIBOR plus
.70%, and mature on February 1, 2027.
(2) Adjusted to reflect the sale of the Series B Capital Securities. The
Series B Trust will hold the Series B Subordinated Debentures as its sole
asset. The Corporation will own all of the Series B Common Securities of
the Series B Trust.
(3) On April 28, 1998, the Corporation's Charter was amended to increase the
authorized Common Stock of the Corporation from 300,000,000 shares to
500,000,000 shares.
(4) Adjusted to give effect to the consummation of the Offering, the issuance
in the second quarter of 1998 of $300 million of Tier 2-qualifying
subordinated debt by the Corporation's primary bank subsidiary, and the
Branch Acquisition. See "The Corporation -- Recent and Pending
Acquisitions" in the Prospectus. Tier 1 capital consists of common equity,
retained earnings, and a limited amount of qualifying perpetual preferred
stock less certain intangibles. Total capital consists of Tier 1 capital
and subordinated debt, qualifying preferred stock, and a limited amount of
the loan loss allowance. The Leverage ratio is defined as the ratio of
Tier 1 capital divided by adjusted average quarterly assets. The Federal
Reserve has issued capital ratio and leverage ratio guidelines for bank
holding companies such as the Corporation. The minimum regulatory
requirements for the Tier 1 capital ratio, Total capital ratio, and Tier 1
leverage ratio are 4.00%, 8.00%, and 3.00%, respectively.
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<PAGE> 17
RATIO OF EARNINGS TO FIXED CHARGES
The Corporation's consolidated ratios of earnings to fixed charges for
each of the periods indicated are set forth below (unaudited):
<TABLE>
<CAPTION>
PERIOD ENDED
MARCH 31, YEARS ENDED DECEMBER 31,
--------------------- ----------------------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- --------- --------- --------- ---------- ---------
<S> <C> <C> <C> <S> <C> <C> <C>
Earnings to Fixed Charges:
Excluding Interest on Deposits......... 2.50 2.43 2.45 2.48 2.31 3.24 3
Including Interest on Deposits......... 1.53 1.51 1.48 1.51 1.50 1.74 1
</TABLE>
For purposes of computing the ratios of earnings to fixed charges,
earnings represent net income plus applicable income taxes and fixed charges.
Fixed charges, excluding interest on deposits, represent interest expense
(except interest on deposits), and one-third of rental expense (which is deemed
representative of the interest factor). Fixed charges, including interest on
deposits, represent the foregoing items plus interest on deposits.
ACCOUNTING TREATMENT
For financial reporting purposes, the Series B Trust will be treated as a
subsidiary of the Corporation and, accordingly, the accounts of the Series B
Trust will be included in the consolidated financial statements of the
Corporation. The Series B Capital Securities will be presented in the
consolidated balance sheet of the Corporation as part of a separate line item
entitled "Company-obligated mandatorily redeemable preferred capital securities
of subsidiary trusts" and appropriate disclosures about the Series B Capital
Securities, the Series B Guarantee, and the Series B Subordinated Debentures
will be included in the notes to the consolidated financial statements of the
Corporation. For financial reporting purposes, the Corporation will record
Distributions payable on the Series B Capital Securities as interest expense in
its consolidated statement of income.
The Corporation has agreed that future financial reports of the
Corporation will:
o present the capital securities issued by other Trusts on the
Corporation's balance sheet as a separate line item (which will
include the Series B Capital Securities and the Outstanding Capital
Securities) entitled "Company-obligated mandatorily redeemable
preferred capital securities of subsidiary trusts;"
o include in a footnote to the financial statements disclosure that the
sole assets of the trusts are subordinated debentures of the
Corporation (specifying as to each trust the principal amount,
interest rate, and maturity date of the subordinated debentures
held); and
o include, in an audited footnote to the financial statements,
disclosure that:
o the trusts are wholly owned,
o the sole assets of the trusts are the subordinated debentures
(specifying as to each trust the principal amount, interest
rate, and maturity date of the subordinated debentures held),
and
o the obligations of the Corporation under the subordinated
debentures, the relevant Indenture, Declaration, and Guarantee,
in the aggregate, constitute a full and unconditional guarantee
by the Corporation of such trust's obligations under the
preferred capital securities issued by such trust.
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<PAGE> 18
CERTAIN TERMS OF THE SERIES B CAPITAL SECURITIES
The following summary of certain terms and provisions of the Series B
Capital Securities supplements the description of the terms and provisions of
the Capital Securities set forth in the accompanying Prospectus under the
heading "Description of the Capital Securities." This summary of certain terms
and provisions of the Series B Capital Securities does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Series B Declaration.
DISTRIBUTIONS
Distributions on each Series B Capital Security will be payable in U.S.
dollars at [a variable annual rate equal to _________ plus ___%/the annual rate
of ___%] (which is the same rate payable on the Series B Subordinated
Debentures) on the Liquidation Amount of $______, payable semi-annually in
arrears on the last day of [________ and ________] of each year. Distributions
will accumulate from the date of original issuance. In the event that any date
on which Distributions are payable on the Series B Capital Securities is not a
Business Day (as defined in the accompanying Prospectus), 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 or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, payment of such Distribution shall be made on the
immediately preceding Business Day, in either case with the same force and
effect as if made on the date such payment was originally payable (each date on
which Distributions are payable in accordance with the foregoing, a
"Distribution Date"). The first Distribution Date will be ______, 199__. The
amount of Distributions payable for any period will be computed on the basis of
a 360-day year of twelve 30-day months.
Distributions on the Series B Capital Securities (other than
distributions on a Redemption Date (as defined in the accompanying Prospectus))
will be payable to the holders of such Series B Capital Securities as they
appear on the register of the Series B Trust on the relevant record dates. The
record dates for the Series B Capital Securities will be, for so long as the
Series B Capital Securities remain in book-entry form, one Business Day prior to
the Distribution Date and, in the event the Series B Capital Securities are not
in book-entry form, the fifteenth day of the month of the relevant Distribution
Date.
So long as no Indenture Event of Default has occurred and is continuing,
the Corporation will have the right under the Indenture to defer the payment of
interest on the Series B Subordinated Debentures at any time or from time to
time for a period not exceeding 10 consecutive semi-annual periods, provided
that no Extension Period may extend beyond the Stated Maturity of the Series B
Subordinated Debentures. As a consequence of any such deferral, Distributions on
the Series B Capital Securities will be deferred by the Series B Trust during
any such Extension Period. Distributions to which holders of the Series B
Capital Securities are entitled will accumulate and compound semi-annually at [a
variable annual rate equal to ___________ plus ___%/the annual rate of ___%]
from the relevant payment date for such Distributions. The term "Distributions"
as used in this Prospectus Supplement and the Prospectus shall include any such
compounded amounts unless the context otherwise requires.
During any such Extension Period, the Corporation may not, and may
not permit any subsidiary of the Corporation to:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
the Corporation's capital stock, or
o make any payment of principal, interest, or premium, if any, on or
repay, repurchase, or redeem any debt securities that rank pari
passu with or junior to the Series B Subordinated Debentures, or
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<PAGE> 19
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior to
the Series B Subordinated Debentures.
The following are permitted exceptions to this covenant:
o repurchases, redemptions, or other acquisitions of shares of
capital stock of the Corporation in connection with any
employment contract, benefit plan, or other similar arrangement
with or for the benefit of any one or more employees, officers,
directors, or consultants, or in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection
with the issuance of common stock (or securities convertible into
or exchangeable for common stock) as consideration in an
acquisition transaction that was entered into prior to the
commencement of such Extension Period);
o as a result of an exchange or conversion of any class or series
of the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any other class or series of
the Corporation's capital stock or of any class or series of the
Corporation's indebtedness for any class or series of the
Corporation's capital stock;
o the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged;
o any declaration of a dividend in connection with any
stockholders' rights plan, or the issuance of rights, stock, or
other property under any stockholders' rights plan, or the
redemption or repurchase of rights pursuant to such plan; or
o any dividend in the form of stock, warrants, options, or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options, or other rights is the same
stock as that on which the dividend is being paid (or ranks pari
passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation
may further extend the Extension Period, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Series B Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due on any Interest Payment Date
(including interest at [a variable annual rate equal to ___________ plus
___%/the annual rate of ___%], compounded semi-annually, to the extent permitted
by law), the Corporation may elect to begin a new Extension Period subject to
the above requirements. See "Certain Terms of the Series B Subordinated
Debentures -- Option to Defer Interest Payments" and "Certain United States
Federal Income Tax Consequences -- Interest Income and Original Issue Discount."
The Corporation has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the Series B
Subordinated Debentures.
REDEMPTION
Upon the repayment or redemption, in whole or in part, of the Series B
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 in
the accompanying Prospectus) of the Series B Capital Securities upon not less
than 30 nor more than 60 days' notice prior to the date fixed for repayment or
redemption at a redemption price (with respect to the Series B Capital
Securities, the "Redemption Price") equal to the aggregate Liquidation Amount of
such Series B Capital Securities plus accumulated and unpaid Distributions to
the date of redemption (the "Redemption Date"). See "Description of the Capital
Securities -- Redemption" in the accompanying Prospectus. For a description of
the Stated Maturity and redemption provisions of the Series B Subordinated
Debentures, see "Certain Terms of the Series B Subordinated Debentures --
General" and "-- Redemption." If less than all of the Series B Subordinated
Debentures are to be repaid or redeemed on a Redemption
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<PAGE> 20
Date, then the proceeds from such repayment or redemption shall be allocated to
the redemption pro rata of the Series B Capital Securities and the Series B
Common Securities.
LIQUIDATION OF SERIES B TRUST AND DISTRIBUTION OF SERIES B SUBORDINATED
DEBENTURES
The Corporation will have the right at any time to dissolve the Series B
Trust and, after satisfaction of liabilities to creditors of the Series B Trust
as provided by applicable law, to cause the Series B Subordinated Debentures to
be distributed to the holders of the Series B Capital Securities in exchange.
Such right is subject to the Corporation's having received prior approval of the
Federal Reserve, if then required under applicable capital guidelines or
policies.
Under current United States Federal income tax law, a distribution of
Series B Subordinated Debentures in exchange for Series B Capital Securities
should not be a taxable event to holders of the Series B Capital Securities.
Should there be a change in law, a change in legal interpretation, a Special
Event, or other circumstances, however, the distribution of the Series B
Subordinated Debentures could be a taxable event to holders of the Series B
Capital Securities. See "Certain Federal Income Tax Consequences -- Distribution
of Series B Subordinated Debentures or Cash Upon Liquidation of the Series B
Trust." If the Corporation elects neither to redeem the Series B Subordinated
Debentures prior to maturity nor to liquidate the Series B Trust and distribute
the Series B Subordinated Debentures or Cash Upon holders of the Series B
Capital Securities in exchange, the Series B Capital Securities will remain
outstanding until the Stated Maturity of the Series B Subordinated Debentures.
If the Corporation elects to dissolve the Series B Trust causing the
Series B Subordinated Debentures to be distributed to holders of the Series B
Capital Securities in exchange upon liquidation of the Series B Trust, the
Corporation shall continue to have the right to redeem the Series B Subordinated
Debentures as described under "Certain Terms of Series B Subordinated Debentures
- -- Redemption."
LIQUIDATION VALUE
The amount payable on the Series B Capital Securities in the event of any
liquidation of the Series B Trust is $____ per Series B Capital Security plus
accumulated and unpaid Distributions, which may be in the form of a distribution
of a Like Amount in Series B Subordinated Debentures, subject to certain
exceptions. See "Description of the Capital Securities -- Liquidation
Distribution Upon Dissolution" in the accompanying Prospectus.
REGISTRATION OF SERIES B CAPITAL SECURITIES
The Series B Capital Securities will be represented by global
certificates registered in the name of the Depository or its nominee. Beneficial
interests in the Series B Capital Securities will be shown on, and transfers
will be effected only through, records maintained by the Depository's
Participants (as defined in the accompanying Prospectus). Except as described
below and in the accompanying Prospectus, Series B Capital Securities in
certificated form will not be issued in exchange for the global certificates.
See "Book-Entry Issuance" in the accompanying Prospectus.
A global security shall be exchangeable for Series B Capital Securities
registered in the names of persons other than the Depository or its nominee only
if:
o the Depository notifies the Series B Trust that it is unwilling or
unable to continue as a depository for such global security and no
successor depository shall have been appointed,
o at any time the Depository ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depository
is required to be so registered to act as such depository,
o the Series B Trust in its sole discretion determines that such
global security shall be so exchangeable, or
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- there shall have occurred and be continuing an Indenture Event of
Default with respect to the Series B Subordinated Debentures.
Any global security that is exchangeable pursuant to any of these events
shall be exchangeable for definitive certificates registered in such names as
the Depository shall direct. It is expected that such instructions will be based
upon directions received by the Depository from its Participants with respect to
ownership of beneficial interests in such global security. In the event that
Series B Capital Securities are issued in definitive form, such Series B Capital
Securities will be in denominations of $ and integral multiples thereof
and may be transferred or exchanged at the offices described below.
Payments on Series B Capital Securities represented by a global security
will be made to the Depository, as the depositary for the Series B Capital
Securities. In the event Series B Capital Securities are issued in certificated
form, the Liquidation Amount and Distributions will be payable, the transfer of
the Series B Capital Securities will be registrable, and Series B Capital
Securities will be exchangeable for Series B Capital Securities of other
denominations of a like aggregate Liquidation Amount, at the corporate office of
the Property Trustee in New York, New York, or at the offices of any paying
agent or transfer agent appointed by the Regular Trustees, provided that payment
of any Distribution may be made at the option of the Regular Trustees by check
mailed to the address of the persons so entitled or by wire transfer. In
addition, if the Series B Capital 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 payment is scheduled to be made. For a
description of the Depository and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions, and other matters,
see "Book-Entry Issuance" in the accompanying Prospectus.
CERTAIN TERMS OF THE SERIES B SUBORDINATED DEBENTURES
The following summary of certain terms and provisions of the Series B
Subordinated Debentures supplements the description of the terms and provisions
of the Corresponding Junior Subordinated Debentures set forth in the
accompanying Prospectus under the heading "Description of the Subordinated
Debentures." The summary of certain terms and provisions of the Series B
Subordinated Debentures set forth below does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the Indenture. The
form of Indenture has been filed as an exhibit to the Registration Statement.
GENERAL
Concurrently with the issuance of the Series B Capital Securities, the
Series B Trust will invest the proceeds of such Series B Capital Securities and
the consideration paid by the Corporation for the Series B Common Securities in
the Series B Subordinated Debentures issued by the Corporation. The Series B
Subordinated Debentures will be issued as a series of junior subordinated
debentures under the Indenture. The Series B Subordinated Debentures will mature
on _________, 20__ (the "Stated Maturity").
The Series B Subordinated Debentures will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Indebtedness of the
Corporation and will be pari passu with $200 million of obligations of the
Corporation associated with the Outstanding Capital Securities. The Indenture
does not limit the incurrence or issuance of other secured or unsecured debt of
the Corporation, whether under the Indenture or any existing or other indenture
that the Corporation may enter into in the future or otherwise. See "Description
of the Subordinated Debentures -- Subordination" in the accompanying Prospectus.
The Indenture does not limit the aggregate principal amount of Series B
Subordinated Debentures that may be issued under the Indenture.
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<PAGE> 22
INTEREST
The Series B Subordinated Debentures will bear interest at [a variable
annual rate equal to _______ plus .___%/the annual rate of ___%] on the
principal amount of such Series B Capital Securities, payable semi-annually in
arrears on the last day of [________ and ________] of each year (each, an
"Interest Payment Date"), commencing _________, 1998, to the person in whose
name each Subordinated Debenture is registered on the close of business on the
record date preceding such Interest Payment Date. The amount of interest payable
for any period will be computed on the basis of a 360-day year of twelve 30-day
months.
In the event that any Interest Payment Date is not a Business Day, such
Interest Payment Date will be postponed until the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day is in the next succeeding calendar
year, payment of such interest shall be made on the immediately preceding
Business Day, in either case 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 such
amount (to the extent permitted by law) at [a variable annual rate equal to
___________ plus .___%/the annual rate of ___%], compounded semi-annually. The
term "interest" as used in this Prospectus Supplement shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date, and any Additional Sums, as applicable.
Interest on the Series B Subordinated Debentures shall accrue from _________,
1998.
As described in the accompanying Prospectus, if the Series B Trust is
required to pay any additional taxes, duties or other governmental charges as a
result of a Tax Event, the Corporation will pay as Additional Sums on the Series
B Subordinated Debentures such amounts as shall be required in order that the
Distributions then due and payable by a Trust on the outstanding Trust
Securities of such Trust shall not be reduced as a result of any additional
taxes, duties, and other governmental charges. See "Description of the Capital
Securities -- Redemption -- Special Event Redemption" in the accompanying
Prospectus.
[Include only if Floating Rate based on LIBOR:
The Chase Manhattan Bank, as Calculation Agent (the "Calculation Agent"),
will calculate the interest rate for each semi-annual interest period based on
LIBOR determined as of two London Business Days (defined as any day, other than
a Saturday or Sunday, on which banks are open for business in London) prior to
the first day of such interest period (each, a "Determination Date"). "LIBOR"
means, with respect to a semi-annual interest period relating to an Interest
Payment Date (in the following order of priority):
(a) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date;
(b) if such rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole
multiple of .00001%) of the rates (expressed as percentages per annum)
for Eurodollar deposits having a three-month maturity that appear on
Reuters Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00
a.m. (London time) on such Determination Date;
(c) if such rate does not appear on Reuters Page LIBO as of 11:00
a.m. (London time) on the related Determination Date, the Calculation
Agent will request the principal London offices of four leading banks in
the London interbank market to provide such banks' offered quotations
(expressed as percentages per annum) to prime banks in the London
interbank market for Eurodollar deposits having a three-month maturity as
of 11:00
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a.m. (London time) on such Determination Date. If at least two quotations
are provided, LIBOR will be the arithmetic mean (if necessary rounded
upwards to the nearest whole multiple of .00001%) of such quotations;
(d) if fewer than two such quotations are provided as requested in
clause (c) above, the Calculation Agent will request four major New York
City banks to provide such banks' offered quotations (expressed as
percentages per annum) to leading European banks for loans in Eurodollars
as of 11:00 a.m. (London time) on such Determination Date. If at least
two such quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of .00001%) of
such quotations; and
(e) if fewer than two such quotations are provided as requested in
clause (d) above, LIBOR will be LIBOR determined with respect to the
interest period immediately preceding such current interest period.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be, by a
corrected rate before 12:00 noon (London time) on such Determination Date, the
corrected rate as so substituted on the applicable page will be the applicable
LIBOR for such Determination Date.
Absent manifest error, the Calculation Agent's determination of LIBOR and
its calculation of the applicable interest rate for each interest period will be
final and binding. Investors may obtain the interest rates for the current and
preceding interest period by writing or calling Corporate Series B Trust
Administration at the Calculation Agent at The Chase Manhattan Bank, 450 West
33rd Street, New York, New York 10001.]
OPTION TO DEFER INTEREST PAYMENTS
So long as no Indenture Event of Default has occurred and is continuing,
the Corporation has the right under the Indenture at any time or from time to
time during the term of the Series B Subordinated Debentures to defer the
payment of interest for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
may extend beyond the Stated Maturity of the Series B Subordinated Debentures.
At the end of such Extension Period, the Corporation must pay all interest then
accrued and unpaid (together with interest at [a variable annual rate equal to
___________ plus .___%/the annual rate of ___%], compounded semi-annually to the
extent permitted by applicable law). During an Extension Period, interest will
continue to accrue and holders of Series B Subordinated Debentures (or holders
of Series B Capital Securities while the Series B Capital Securities are
outstanding) will be required to accrue interest income for United States
federal income tax purposes. See "Certain United States Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
the Corporation's capital stock, or
o make any payment of principal, interest, or premium, if any, on or
repay, repurchase, or redeem any debt securities that rank pari
passu with or junior to the Series B Subordinated Debentures, or
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior to
the Series B Subordinated Debentures.
The following are permitted exceptions to this covenant:
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o repurchases, redemptions, or other acquisitions of shares of
capital stock of the Corporation in connection with any employment
contract, benefit plan, or other similar arrangement with or for
the benefit of any one or more employees, officers, directors, or
consultants, or in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance
of common stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension
Period);
o as a result of an exchange or conversion of any class or series of
the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any other class or series of
the Corporation's capital stock or of any class or series of the
Corporation's indebtedness for any class or series of the
Corporation's capital stock;
o the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted
or exchanged;
o any declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock, or other property
under any stockholders' rights plan, or the redemption or
repurchase of rights pursuant to such plan; or
o any dividend in the form of stock, warrants, options, or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options, or other rights is the same
stock as that on which the dividend is being paid (or ranks pari
passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation
may further extend the Extension Period, provided that no Extension Period may
exceed 10 consecutive semi-annual periods or extend beyond the Stated Maturity
of the Series B Subordinated Debentures. Upon the termination of any Extension
Period and the payment of all amounts then due on any Interest Payment Date, the
Corporation 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 of such Extension Period. The Corporation must give the
Property Trustee, the Regular Trustees, and the Indenture Trustee notice of its
election of such Extension Period not less than one Business Day prior to the
record date for the first Distribution to be deferred pursuant to this option.
The Property Trustee shall give notice of the Corporation's election to begin a
new Extension Period to the holders of the Series B Capital Securities.
REDEMPTION
The Series B Subordinated Debentures are redeemable prior to maturity at
the option of the Corporation, subject to the receipt of any necessary prior
approval of the Federal Reserve, (a) on or after _______, 20__, in whole or in
part at any time, or (b) at any time in whole (but not in part), within 90 days
of the occurrence of a Special Event. In either case, the redemption price will
be equal to the principal amount of the Series B Subordinated Debentures so
redeemed plus accrued and unpaid interest, if any, to the date fixed for
redemption. See "Description of the Subordinated Debentures -- Redemption" in
the accompanying Prospectus.
DISTRIBUTIONS OF SERIES B SUBORDINATED DEBENTURES
As described under "Certain Terms of the Series B Capital Securities --
Liquidation of Series B Trust and Distribution of Series B Subordinated
Debentures," under certain circumstances involving the dissolution of the Series
B Trust, Series B Subordinated Debentures may be distributed to the holders of
the Series B Capital Securities in exchange upon liquidation of the Series B
Trust after satisfaction of liabilities to creditors of the Series B Trust as
provided by applicable law. If distributed to holders of Series B Capital
Securities, the Series B Subordinated Debentures will initially be issued in the
form of one or more global securities and the Depository, or any successor
depositary for the Series B Capital Securities, will act as depositary for the
Series B Subordinated Debentures. It is anticipated that the depositary
arrangements for the Series B Subordinated Debentures would be substantially
identical to those in effect for the Series B Capital Securities. There can be
no assurance as to the market price of any Series B Subordinated
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Debentures that may be distributed to the holders of Series B Capital
Securities. For a description of global securities and certificated securities,
see "Book-Entry Issuance" in the accompanying Prospectus.
REGISTRATION OF SERIES B SUBORDINATED DEBENTURES
The Series B Subordinated Debentures will be registered in the name of
the Series B Trust. In the event that the Series B Subordinated Debentures are
distributed to the holders of Series B Capital Securities, it is anticipated
that the depositary and other arrangements for the Series B Subordinated
Debentures will be substantially identical to those in effect for the Series B
Capital Securities, as applicable. See "Certain Terms of the Series B Capital
Securities -- Registration of Series B Capital Securities."
CERTAIN TERMS OF THE SERIES B GUARANTEE
The Series B Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Series B Trust of the Series B Capital
Securities for the benefit of the holders from time to time of such Series B
Capital Securities. The Chase Manhattan Bank will act as Guarantee Trustee under
the Series B Guarantee. The Series B Guarantee will be qualified as an indenture
under the Trust Indenture Act.
This summary of certain provisions of the Series B 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 Series B Guarantee, including the
definitions in the Series B Guarantee of certain terms. The Guarantee Trustee
will hold the Series B Guarantee for the benefit of the holders of the Series B
Capital Securities.
GUARANTEE PAYMENTS
The Series B Guarantee guarantees to the holders of the Series B Capital
Securities the following payments, to the extent not paid by the Series B Trust:
o any accumulated and unpaid Distributions required to be paid on
the Series B Capital Securities, to the extent that the Series B
Trust has funds available for such payment at such time,
o the Redemption Price with respect to any Series B Capital
Securities called for redemption, to the extent that the Series B
Trust has funds available for such payment at such time, and
o upon a voluntary or involuntary dissolution, winding-up, or
liquidation of the Series B Trust (unless the Series B
Subordinated Debentures are distributed to holders of the Series B
Capital Securities), the lesser of (a) the aggregate of the
Liquidation Amount and all accumulated and unpaid Distributions to
the date of payment, to the extent that the Series B Trust has
funds available therefor at such time, and (b) the amount of
assets of the Series B Trust remaining available for distribution
to holders of the Series B Capital Securities after payment of
creditors of the Series B Trust as required by applicable law.
ENFORCEMENT
The holders of not less than a majority in aggregate Liquidation Amount
of the Series B Capital 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 Series B Guarantee or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under the Series B
Guarantee. Any holder of the Series B Capital Securities may institute a legal
proceeding directly against the Corporation to enforce its rights under the
Series B Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee, or any other person or entity.
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If the Corporation were to default on its obligation to pay amounts under
the Series B Subordinated Debentures, the Series B Trust would lack funds for
the payment of Distributions on the Series B Capital Securities or amounts
payable on redemption of the Series B Capital Securities or otherwise. In such
event, holders of the Series B Capital Securities would not be able to rely upon
the Series B Guarantee for payment of such amounts. Instead, if any event of
default under the Indenture shall have occurred and be continuing and such event
is attributable to the failure of the Corporation to pay interest or premium, if
any, on or principal of the Series B Subordinated Debentures on the applicable
payment date, then a holder of Series B Capital Securities may institute a
Direct Action against the Corporation pursuant to the terms of the Indenture for
enforcement of payment to such holder of the principal of or interest or
premium, if any, on such Series B Subordinated Debentures having a principal
amount equal to the aggregate Liquidation Amount of the Series B Capital
Securities of such holder. In connection with such Direct Action, the
Corporation will have a right to set-off under the Indenture to the extent of
any payment made by the Corporation to such holder of Series B Securities in the
Direct Action. Except as described in this Prospectus Supplement, holders of
Series B Capital Securities will not be able to exercise directly any other
remedy available to the holders of the Series B Subordinated Debentures or
assert directly any other rights in respect of the Series B Subordinated
Debentures. See "Description of the Guarantees" in the accompanying Prospectus.
The Series B Declaration provides that each holder of Series B Capital
Securities by acceptance of the Series B Capital Securities agrees to the
provisions of the Series B Guarantee and the Indenture.
The Series B Guarantee will rank subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation and will be pari passu
with $200 million of obligations of the Corporation associated with the
Outstanding Capital Securities to the same extent as the Subordinated Debenture.
See "Description of the Guarantees -- Status of the Guarantees" in the
accompanying Prospectus. The Series B Guarantee does not limit the incurrence or
issuance of other secured or unsecured debt of the Corporation, whether under
the Indenture or any existing or other indenture that the Corporation may enter
into in the future or otherwise.
The Corporation has, through the Series B Guarantee, the Series B
Subordinated Debentures, and the Indenture, taken together, fully and
unconditionally guaranteed all of the Trust's obligations under the Series B
Capital 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 and unconditional guarantee of the Trust's
obligations under the Series B Capital Securities. See "Relationship Among the
Capital Securities, the Corresponding Subordinated Debentures, and the
Guarantees" in the accompanying Prospectus.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Porter, Wright, Morris & Arthur, in its capacity as
special tax counsel to the Corporation and the Series B Trust ("Tax Counsel"),
the following summary accurately describes the material United States federal
income tax consequences that may be relevant to the purchase, ownership, and
disposition of the Series B Capital Securities. Unless otherwise stated, this
summary deals only with Series B Capital Securities held as capital assets by
United States Persons (defined below) who purchase the Series B Capital
Securities upon original issuance at their original offering price. As used in
this Prospectus, a "United States Person" means:
o a person that is a citizen or resident of the United States for
federal income tax purposes,
o a corporation, partnership, or other entity created or organized
in or under the laws of the United States or any political
subdivision of the United States,
o an estate the income of which is subject to United States federal
income taxation regardless of its source, or
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- any trust if a court within the United States is able to exercise
primary supervision over the administration of such trust and one
or more United States fiduciaries have the authority to control
all the substantial decisions of such trust.
The tax treatment of a holder may vary depending on its particular
situation. This summary does not address all the tax consequences that may be
relevant to a particular holder or to holders that may be subject to special tax
treatment, such as banks, thrift institutions, real estate investment trusts,
regulated investment companies, insurance companies, traders in securities that
elect to mark to market, brokers and dealers in securities or currencies,
tax-exempt investors, persons whose functional currency is not the U.S. dollar,
or persons holding the Series B Capital Securities as a position in a
"straddle," as part of a "hedging," "conversion," or other integrated
investment. In addition, this summary does not address any description of any
alternative minimum tax consequences, the tax laws of any state, local, or
foreign government that may be applicable to a holder of Series B Capital
Securities, or the income tax consequences to shareholders in, or partners or
beneficiaries of, a holder of the Series B Capital Securities.
This summary is based on the Tax Code, the Treasury regulations
promulgated under the Tax Code, and administrative and judicial interpretations
of Tax Code, each as of the date of this Prospectus, all of which are subject to
change, possibly on a retroactive basis. The authorities on which this summary
is based are subject to various interpretations, and the opinions of Tax Counsel
are not binding on the Internal Revenue Service ("IRS") or the courts, either of
which could take a contrary position. Moreover, no rulings have been or will be
sought from the IRS with respect to the transactions described in this
Prospectus. Accordingly, there can be no assurance that the IRS will not
challenge the opinions expressed in this Prospectus or that a court would not
sustain such a challenge.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF THE SERIES B
CAPITAL 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. FOR A DISCUSSION OF THE POSSIBLE REDEMPTION OF THE SERIES B
CAPITAL SECURITIES UPON THE OCCURRENCE OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF
THE CAPITAL SECURITIES -- REDEMPTION -- SPECIAL EVENT REDEMPTION OR DISTRIBUTION
OF SERIES B SUBORDINATED DEBENTURES" IN THE ACCOMPANYING PROSPECTUS.
CLASSIFICATION OF THE SERIES B TRUST
In connection with the issuance of the Series B Capital Securities, Tax
Counsel will render an opinion generally to the effect that, under current law
and based upon certain representations, facts, and assumptions and assuming full
compliance with the terms of the Series B Declaration and other documents, the
Series B Trust should be classified as a grantor trust and will not be
classified as an association taxable as a corporation for United States federal
income tax purposes. Accordingly, for United States federal income tax purposes,
each holder of Series B Capital Securities should be treated as owning an
undivided beneficial interest in the Series B Subordinated Debentures and, thus,
should be required to include in its gross income its pro rata share of interest
income or OID that is paid or accrued on the Series B Subordinated Debentures
whether or not cash is actually distributed to the holders of the Series B
Capital Securities.
CLASSIFICATION OF THE SERIES B SUBORDINATED DEBENTURES
The Corporation, the Trust, and the holders of the Series B Capital
Securities (by the acceptance of a beneficial interest in a Series B Capital
Security) will agree to treat the Series B Subordinated Debentures as
indebtedness for all United States federal income tax purposes. In connection
with the issuance of the Series B Subordinated Debentures, Tax Counsel will
render an opinion generally to the effect that, under then current law, and
based upon certain representations, facts, and assumptions, the Series B
Subordinated Debentures will be classified as indebtedness of the Corporation
for United States federal income tax purposes.
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INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Under the applicable Treasury regulations, the Series B Subordinated
Debentures will not be treated as issued with OID within the meaning of section
1273(a) of the Tax Code because the Corporation has concluded, and this
discussion assumes, that as of the date of this Prospectus the likelihood of its
exercising its right to defer payments of interest is remote. Accordingly,
except as set forth below, stated interest on the Series B Subordinated
Debentures generally will be taxable to a holder as ordinary income at the time
it is paid or accrued in accordance with such holder's regular method of tax
accounting.
If, however, the Corporation exercises its right to defer payments of
interest on the Series B Subordinated Debentures, the Series B Subordinated
Debentures would be treated as redeemed and reissued for OID purposes at such
time and all holders of the Series B Subordinated Debentures and, consequently,
holders of the Series B Capital Securities, will be required to accrue their pro
rata share of OID (which will include both the stated interest and the de
minimis OID on the Series B Subordinated Debentures) on a daily economic accrual
basis during the Extension Period even though the Corporation will not pay such
interest until the end of the Extension Period, and even though some holders may
use the cash method of tax accounting. Moreover, thereafter, the Series B
Subordinated Debentures will be taxed as OID instruments for as long as they
remain outstanding. Thus, even after the end of an Extension Period, all holders
would be required to continue to include the stated interest (and the de minimis
OID) on the Series B Subordinated Debentures in income on a daily basis,
regardless of their method of tax accounting and in advance of receipt of the
cash attributable to such interest income. Under the OID economic accrual rules,
a holder would accrue an amount of interest income each year that approximates
the stated interest payments called for under the terms of the Series B
Subordinated Debentures, and subsequent actual cash payments of interest on the
Series B Subordinated Debentures would not be reported separately as taxable
income. Any amount of OID included in a holder's gross income (whether or not
during an Extension Period) with respect to a Series B Capital Security will
increase such holder's tax basis in such Series B Capital Security, and the
amount of Distributions received by a holder in respect of such accrued OID will
reduce the tax basis of such Series B Capital Security.
In the absence of the Corporation's election to defer an interest payment
period, de minimis OID would not be subject to income tax until a holder's
Series B Subordinated Debentures were sold, redeemed, or retired, in which event
the de minimis OID would increase any gain or decrease any loss recognized by
the holder. In general, de minimis OID will be present with respect to the
Series B Subordinated Debentures, in an amount equal to the excess of (a) the
stated redemption price at maturity (as defined for income tax purposes) of the
Series B Subordinated Debentures, over (b) the issue price of the Series B
Subordinated Debentures, unless such amount is greater than or equal to the
product of (x) 0.25% of the redemption price, and (y) the number of complete
calendar years from the Series B Subordinated Debentures' issue date to its
maturity.
If the Corporation's option to defer payments of interest were not
treated as remote, the Series B Subordinated Debentures would be treated as
initially issued with OID in an amount equal to the aggregate stated interest
over the term of the Series B Subordinated Debentures, plus the amount of de
minimis OID on the Series B Subordinated Debentures. That OID would generally be
includible in a United States Person's taxable income, over the term of the
Series B Subordinated Debentures, on an economic accrual basis.
The Treasury regulations described above have not yet been addressed in
any rulings or other interpretations by the IRS, and it is possible that the IRS
could take a contrary position. If the IRS were to assert successfully that the
stated interest on the Series B Subordinated Debentures was OID regardless of
whether the Corporation exercises its option to defer payments of interest on
such debentures, all holders of Series B Capital Securities would be required to
include such stated interest in income on a daily economic accrual basis as
described above.
Corporate holders of Series B Capital Securities will not be entitled to
a dividends-received deduction with respect to any income recognized by such
holders with respect to the Series B Capital Securities.
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DISTRIBUTION OF SERIES B SUBORDINATED DEBENTURES OR CASH UPON LIQUIDATION OF THE
SERIES B TRUST
As described under the caption "Description of the Capital Securities --
Liquidation Distribution Upon Dissolution," Series B Subordinated Debentures may
be distributed to holders in exchange for the Series B Capital Securities and in
liquidation of the Series B Trust. Under current law, such a distribution would
be non-taxable for United States federal income tax purposes, and will result in
the holder receiving directly its pro rata share of the Series B Subordinated
Debentures previously held indirectly through the Trust, with a holding period
and aggregate tax basis equal to the holding period and aggregate tax basis such
holder had in its Series B Capital Securities before such distribution. A holder
would accrue interest in respect of the Series B Subordinated Debentures
received from the Series B Trust in the manner described above under "--
Interest Income and Original Issue Discount. If, however, the liquidation of the
Series B Trust were to occur because the Series B Trust is subject to United
States federal income tax with respect to income accrued or received on the
Series B Subordinated Debentures, the distribution of the Series B Subordinated
Debentures to holders would be a taxable event to the Series B Trust and to each
holder and a holder would recognize gain or loss as if the holder had exchanged
its Series B Capital Securities for the Series B Subordinated Debentures it
received upon liquidation of the Series B Trust.
Under certain circumstances described in this Prospectus (see
"Description of the Capital Securities -- Redemption -- Special Event Redemption
or Distribution of Series B Subordinated Debentures"), the Series B Subordinated
Debentures may be redeemed for cash by the Corporation, with the proceeds of
such redemption distributed to holders in redemption of their Series B Capital
Securities. Under current law, such a redemption would constitute a taxable
disposition of the redeemed Series B Capital Securities for United States
federal income tax purposes, and a holder would recognize gain or loss as if it
sold such redeemed Series B Capital Securities for cash.
See "-- Sales of Series B Capital Securities."
SALES OF SERIES B CAPITAL SECURITIES
A holder that sells Series B Capital Securities will recognize gain or
loss equal to the difference between the amount realized by such holder on the
sale of the Series B Capital Securities (except to the extent that such amount
realized is characterized as a payment in respect of accrued but unpaid interest
on such holder's allocable share of the Series B Subordinated Debentures that
the holder had not included in gross income previously) and the holder's
adjusted tax basis in the Series B Capital Securities sold. Such gain or loss
generally will be a capital gain or loss and generally will be taxable as a
long-term capital gain or loss if the Series B Capital Securities have been held
for more than one year prior to their sale. If the Series B Capital Securities
have been held for more than 18 months prior to their sale, the holder may be
entitled to lower preferential long-term capital gain tax rates. Subject to
certain limited exceptions, capital losses cannot be applied to offset ordinary
income for United States federal income tax purposes.
TAX LAW CHANGES
Prospective investors should be aware that Enron Corporation has filed a
petition in Tax Court challenging the proposed disallowance by the Internal
Revenue Service of the deduction of interest expense on securities issued by
Enron Corporation in 1993 and 1994 that are similar to, although different in a
number of respects form, the Series B Subordinated Debentures. It is possible
that a decision in that case could give rise to a Tax Event, which would permit
the Corporation to cause a redemption of the Capital Securities, as described
more fully under "Description of the Capital Securities - Redemption" in the
accompanying Prospectus.
Legislation was proposed by the United States Department of Treasury on
February 6, 1997, as part of President Clinton's 1998 Budget Proposal that
contained a provision which, if adopted as proposed, would have had the effect
of prohibiting the Corporation from deducting the interest paid on the Series B
Subordinated Debentures which, in turn, would have triggered a "Tax Event" (see
below). On August 5, 1997, the Taxpayer Relief Act of 1997 was signed by
President Clinton. The Act did not adopt the tax law changes that would have
denied the interest deduction as originally contained in the 1998 Budget
Proposal. In addition, President Clinton's recently-released Fiscal 1999 Budget
Proposal does not contain a provision similar to that contained in the 1998
Budget Proposal that would deny deductions for interest paid on the Series B
Subordinated Debentures.
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<PAGE> 30
Even though the most recent Executive and Congressional action does not
attempt to incorporate the provisions from the 1998 Budget Proposal concerning
the disallowance of interest deductions on long-term debt obligations not
treated as indebtedness on the Corporation's balance sheet, there can be no
assurance that future legislative proposals or final legislation will not
adversely affect the ability of the Corporation to deduct interest on the Series
B Subordinated Debentures or otherwise affect the tax treatment of the
transactions described in this Prospectus. Such legislation could give rise to a
Tax Event, which would permit the Corporation to cause a redemption of the
Series B Capital Securities, as described more fully in this Prospectus under
the caption "Description of the Capital Securities -- Special Event Redemption
or Substitution of Series B Subordinated Debentures."
NON-UNITED STATES HOLDERS
As used in this Prospectus, the term "Non-United States Holder" means any
holder that is not a United States Person (as defined above). As discussed
above, the Series B Capital Securities will be treated as evidence of an
indirect beneficial ownership interest in the Series B Subordinated Debentures.
See "-- Classification of the Series B Trust." Thus, under present United States
federal income tax law, and subject to the discussion below concerning backup
withholding:
(a) no withholding of United States federal income tax will be
required with respect to the payment by the Series B Trust or the
Corporation or any paying agent of principal or interest (which for
purposes of this discussion includes any OID) with respect to the Series
B Capital Securities (or on the Series B Subordinated Debentures) to a
Non-United States Holder, provided (1) that the beneficial owner of the
Series B Capital Securities ("Beneficial Owner") does not actually or
constructively own 10% or more of the total combined voting power of all
classes of stock of the Corporation entitled to vote within the meaning
of section 871(h)(3) of the Tax Code and the regulations under the Tax
Code, (2) the Beneficial Owner is not a controlled foreign corporation
for United States federal income tax purposes that is related to the
Corporation through stock ownership, (3) the Beneficial Owner is not a
bank whose receipt of interest with respect to the Series B Capital
Securities (or on the Series B Subordinated Debentures) is described in
section 881(c)(3)(A) of the Tax Code, and (4) the Beneficial Owner
satisfies the statement requirement (described generally below) set forth
in section 871(h) and section 881(c) of the Tax Code and the regulations
under the Tax Code, and
(b) no withholding of United States federal income tax will be
required with respect to any gain realized by a Non-United States Holder
upon the sale or other disposition of the Series B Capital Securities (or
Series B Subordinated Debentures).
To satisfy the requirement referred to in (a)(4) above, the Beneficial
Owner, or a financial institution holding the Series B Capital Securities on
behalf of such owner, must provide, in accordance with specified procedures, to
the Series B Trust or its paying agent, a statement to the effect that the
Beneficial Owner is not a United States Person. Pursuant to current temporary
Treasury regulations, these requirements will be met if (1) the Beneficial Owner
provides his name and address, and certifies, under penalties of perjury, that
it is not a United States Person (which certification may be made on an IRS Form
W-8 (or successor form)) or (2) a financial institution holding the Series B
Capital Securities (or Series B Subordinated Debentures) on behalf of the
Beneficial Owner certifies, under penalties of perjury, that such statement has
been received by it and furnishes a paying agent with a copy of such statement.
If a Non-United States Holder cannot satisfy the requirements of the
"portfolio interest" exception described in (a) above, payments of interest
(including any OID) made to such Non-United States Holder will be subject to a
30% withholding tax unless the Beneficial Owner provides the Series B Trust or
the Corporation or any paying agent, as the case may be, with a properly
executed (1) IRS Form 1001 (or successor form) claiming an exemption from, or a
reduction of, such withholding tax under the benefit of a tax treaty or (2) IRS
Form 4224 (or successor form) stating that interest paid with respect to the
Series B Capital Securities (or on the Series B Subordinated Debentures) is not
S-27
<PAGE> 31
subject to withholding tax because it is effectively connected with the
Beneficial Owner's conduct of a trade or business in the United States.
If a Non-United States Holder is engaged in a trade or business in the
United States and interest with respect to the Series B Capital Securities (or
on the Series B Subordinated Debentures) is effectively connected with the
conduct of such trade or business, the Non-United States Holder, although exempt
from the withholding tax discussed above, will be subject to United States
federal income tax on such interest income on a net income basis in the same
manner as if it were a United States Person. In addition, if such Non-United
States Holder is a foreign corporation, it may be subject to a branch profits
tax equal to 30% of its effectively connected earnings and profits for the
taxable year, subject to adjustments. For this purpose, such interest income
would be included in such foreign corporation's earnings and profits.
Any gain realized upon the sale or other disposition of the Series B
Capital Securities (or the Series B Subordinated Debentures) generally will not
be subject to United States federal income tax unless (a) such gain is
effectively connected with a trade or business in the United States of the
Non-United States Holder, (b) in the case of a Non-United States Holder who is
an individual, such individual is present in the United States for 183 days or
more in the taxable year of such sale, exchange, or retirement, and certain
other conditions are met, or (c) in the case of any gain representing accrued
interest on the Series B Subordinated Debentures, the requirements of the
"portfolio interest" exception described in (a) above are not satisfied.
On October 14, 1997, the IRS published in the Federal Register final
regulations (the "1997 Final Regulations") which affect the United States
taxation of Non-United States Holders. The 1997 Final Regulations are effective
for payments made after December 31, 1999, regardless of the issue date of the
instrument with respect to which such payments are made, subject to certain
transition rules. The discussion under this heading and under "-- Information
Reporting and Backup Withholding" is not intended to be a complete discussion of
the provisions of the 1997 Final Regulations, and prospective holders of Series
B Capital Securities are urged to consult their tax advisors concerning the tax
consequences of their investment in light of the 1997 Final Regulations.
The 1997 Final Regulations prescribe revised documentation procedures
designed to unify certification requirements and clarify reliance standards in
an effort to simplify the processing of United States-source payments to foreign
persons. The 1997 Final Regulations generally do not affect the documentation
rules described above, but add other certification options. Under one such
option, a withholding agent will be allowed to rely on an intermediary
withholding certificate furnished by a "qualified intermediary" (as defined
below) on behalf of one or more beneficial owners (or other intermediaries)
without having to obtain the beneficial owner certificate described above.
"Qualified intermediaries" include: (a) foreign financial institutions or
foreign clearing organizations (other than a United States branch or United
States office of such institution or organization), (b) foreign branches or
offices of United States financial institutions or foreign branches or offices
of United States clearing organizations, (c) a foreign corporation for purposes
of presenting claims of tax treaty benefits on behalf of its shareholders, or
(d) any other person acceptable to the service which, as to all (a), (b), (c),
and (d) have entered into withholding agreements with the IRS. In addition to
certain other requirements, qualified intermediaries must obtain withholding
certificates, such as revised Internal Revenue Service Form W-8 (see below),
from each beneficial owner. Under other options, an authorized foreign agent of
a United States withholding agent will be permitted to act on behalf of the
United States withholding agent and the United States withholding agent will be
permitted to rely on a statement from a securities clearing organization, a
bank, or other financial institution that holds customers' securities in the
ordinary course of its business if the institution has received a Form W-8 (or
an acceptable substitute) from the beneficial owner.
The 1997 Final Regulations generally define the beneficial owner of
payments on Series B Capital Securities as those persons who must include such
payments in gross income, rather than persons such as nominees or agents legally
entitled to such payments. In the case of payments to an entity classified as a
foreign partnership under United States tax principles, the partners, rather
than the partnership, generally will be required to provide the required
certifications to qualify for the withholding exemption described above. A
payment to a United States partnership, however, is treated for these purposes
as payment to a United States payee, even if the partnership has one or more
foreign partners. The
S-28
<PAGE> 32
1997 Final Regulations provide certain presumptions with respect to withholding
for holders not furnishing the required certifications to qualify for the
withholding exemption described above. In addition, the 1997 Final Regulations
will replace a number of current tax certification forms (including Internal
Revenue Service Form W-8) with a single, revised Internal Revenue Service Form
W-8 (which, in certain circumstances, requires information in addition to that
previously required). Under the 1997 Final Regulations, this Form W-8 will
generally remain valid until the last day of the third calendar year following
the year in which the certificate is signed.
Under the 1997 Final Regulations, withholding of United States federal
income tax may apply to payments on a taxable sale or other disposition of
Series B Capital Securities by a Non-United States Holder who does not provide
appropriate certification to the withholding agent with respect to such
transaction.
The 1997 Final Regulations provide transition rules concerning existing
certificates, such as Internal Revenue Service Forms W-8 and 1001.
As discussed above, changes in legislation affecting the income tax
consequences of the Series B Subordinated Debentures are possible, and could
adversely affect the ability of the Corporation to deduct interest payable on
the Series B Subordinated Debentures. Such legislation also could cause the
Series B Subordinated Debentures to be classified as equity (rather than
indebtedness) of the Corporation for United States federal income tax purposes
and, thus, cause the income derived from the Series B Subordinated Debentures to
be characterized as dividend, rather than interest, income for such purposes.
Dividend income is not eligible for the "portfolio interest" exception described
in (a) above generally causing income derived by a Non-United States Holder on
the Series B Capital Securities to be subject to the 30% United States federal
withholding tax described above, unless a reduction or elimination of such tax
was available under an applicable tax treaty or such dividend income was
effectively connected with a trade or business carried on in the United States
by such Non-United States Holder. It is possible that legislation could be
enacted in the future that could affect the characterization of income paid on
the Series B Capital Securities (or the Series B Subordinated Debentures) or
otherwise adversely affect a Non-United States Holder. See "-- Tax Law Changes."
INFORMATION REPORTING AND BACKUP WITHHOLDING
The amount of interest (or OID, if any) accrued on the Series B Capital
Securities (or the Series B Subordinated Debentures) held of record by United
States Persons (other than corporations and other exempt holders) will be
reported annually to such holders and to the IRS. The Property Trustee currently
intends to deliver such reports to holders of record prior to January 31
following each calendar year. It is anticipated that persons who hold Series B
Capital Securities as nominees for beneficial holders will report the required
tax information to beneficial holders on Form 1099.
"Backup withholding" at a rate of 31% will apply to payments of interest
(or OID, if any) to non-exempt United States Persons unless the holder furnishes
its taxpayer identification number in the manner prescribed in applicable
Treasury regulations, certifies that such number is correct, certifies as to no
loss of exemption from backup withholding, and meets certain other conditions.
No information reporting or backup withholding will be required with
respect to payments made by the Series B Trust or any paying agent to Non-United
States Holders if a statement described in (a)(4) under "Non-United States
Holders" has been received and the payor does not have actual knowledge that the
beneficial owner is a United States Person.
In addition, backup withholding and information reporting will not apply
if payments of the principal, interest, OID, or premium with respect to the
Series B Capital Securities (or on the Series B Subordinated Debentures) are
paid or collected by a foreign office of a custodian, nominee, or other foreign
agent on behalf of the Beneficial Owner, or if a foreign office of a broker (as
defined in applicable Treasury regulations) pays the proceeds of the sale of the
Series B Capital Securities (or the Series B Subordinated Debentures) to the
owner of such Series B Capital Securities. If,
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<PAGE> 33
however, such nominee, custodian, agent, or broker is, for United States federal
income tax purposes, a United States Person, a controlled foreign corporation,
or a foreign person that derives 50% or more of its gross income for certain
periods from the conduct of a trade or business in the United States, such
payments will not be subject to backup withholding but will be subject to
information reporting, unless (1) such custodian, nominee, agent, or broker has
documentary evidence in its records that the Beneficial Owner is not a United
States Person and certain other conditions are met, or (2) the Beneficial Owner
otherwise establishes an exemption.
In the case of a Non-United States Holder, under the 1997 Final
Regulations, backup withholding and information reporting will not apply to
payments of principal and interest (including OID) with respect to Series B
Capital Securities if such Non-United States Holder provides the required
certification to establish an exemption from the withholding of the United
States federal income tax or otherwise establishes an exemption, as set out in
the 1997 Final Regulations. In general, payments of principal and interest
(including OID) with respect to Series B Capital Securities made to a custodian,
nominee, or broker will not be subject to backup withholding or information
reporting, irrespective of the place of payment or the location of the office of
the custodian, nominee, or broker. Payments of interest (including OID) with
respect to Series B Capital Securities paid to a foreign intermediary (whether
or not a qualified intermediary) will, however, be subject to withholding of
United States federal income tax at the rate of 30% unless the beneficial owner
(whether or not a United States person) establishes an exemption by furnishing a
withholding certificate or other appropriate documentation. Unless the
beneficial owner establishes an exemption, a payment by a custodian, nominee, or
broker may be subject to information reporting and, unless (i) the payment has
been subject to withholding of United States federal income tax at the rate of
30% or (ii) the payment is made outside the United States to an offshore account
in a financial institution that maintains certain procedures related to account
documentation, to backup withholding as well.
The 1997 Final Regulations provide for certain presumptions under which a
Non-United States Holder may be subject to backup withholding in the absence of
required certifications. For example, payments that a withholding agent cannot
reliably associate with documentation are presumed to be made to a United States
payee who is not an exempt recipient, in which case 31% backup withholding
applies, assuming the payment is reportable under Chapter 61 of the Code.
Payment of the proceeds from disposition of Series B Capital Securities
(or the Series B Subordinated Debentures) to or through a United States office
of a broker is subject to information reporting and backup withholding unless
the holder or beneficial owner establishes an exemption from information
reporting and backup withholding.
Under the 1997 Final Regulations, payments on the sale, exchange,
redemption, or retirement of Series B Capital Securities to or through a broker
may be subject to information reporting and backup withholding unless (a) the
beneficial owner establishes an exemption or (b) the transaction is effected
outside the United States and the broker is not a United States person, a
controlled foreign corporation for United States tax purposes, a United States
branch of a foreign bank or foreign insurance company, a foreign partnership
(with respect to payments made after December 31, 1999) if at any time during
its tax year, it is controlled by United States persons or engaged in a United
States trade or business, or a foreign person 50% or more of whose gross income
is effectively connected with the conduct of a United States trade or business
for a specified three-year period.
Back-up withholding is not an additional tax. Rather, any amounts
withheld from a holder of the Series B Capital Securities under the backup
withholding rules will be allowed as a refund or a credit against such holder's
United States federal income tax liability, provided the required information is
furnished to the IRS.
THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR
SITUATION. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP, AND DISPOSITION OF THE SERIES B
CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN,
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN FEDERAL OR OTHER TAX
LAWS.
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<PAGE> 34
BENEFIT PLAN CONSIDERATIONS
Before authorizing an investment in the Series B Capital Securities, each
fiduciary of a pension, profit sharing, or other employee benefit plan subject
to ERISA (each, a "Plan"), should consider, among other matters, (a) ERISA's
fiduciary standards (including its prudence and diversification requirements),
(b) whether such fiduciary has authority to make an investment in the Series B
Capital Securities under the applicable Plan investment policies and governing
instruments, and (c) rules under ERISA and the Tax Code that prohibit a Plan
fiduciary from causing a Plan to engage in a "prohibited transaction."
Section 406 of ERISA and Section 4975 of the Tax Code prohibit Plans, as
well as individual retirement accounts and Keogh plans subject to Section 4975
of the Tax Code (also "Plans"), from, among other things, engaging in certain
transactions involving "plan assets" with persons who are "parties in interest"
under ERISA or "disqualified persons" under the Tax Code with respect to such
Plan. A violation of these "prohibited transaction" rules may result in an
excise tax or other liabilities under ERISA and/or Section 4975 of the Tax Code
for such persons, unless exemptive relief is available under an applicable
statutory or administrative exemption. Employee benefit plans that are
governmental plans (as defined in Section 3(32) of ERISA), certain church plans
(as defined in Section 3(33) of ERISA), and foreign plans (as described in
Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or
Section 4975 of the Tax Code.
The Department of Labor ("DOL") has issued a regulation (29 C.F.R. ss.
2510.3-101) (the "Plan Assets Regulation") concerning the definition of what
constitutes the assets of a Plan. The Plan Assets Regulation provides that, as a
general rule, the underlying assets and properties of corporations,
partnerships, trusts, and certain other entities in which a plan makes an
"equity" investment will be deemed for purposes of ERISA to be assets of the
investing plan unless certain exceptions apply.
Pursuant to an exception contained in the Plan Assets Regulation, the
assets of the Series B Trust would not be deemed to be "plan assets" of
investing Plans if, immediately after the most recent acquisition of any equity
interest in the Trust, less than 25% of the value of each class of equity
interest in the Series B Trust were held by Plans, other employee benefit plans
not subject to ERISA or Section 4975 of the Tax Code (such as governmental,
church, and foreign plans), and entities holding assets deemed to be "plan
assets" of any Plan (collectively, "Benefit Plan Investors"). No assurance can
be given that the value of the Series B Capital Securities held by Benefit Plan
Investors will be less than 25% of the total value of such Series B Capital
Securities and no monitoring or other measures will be taken with respect to the
satisfaction of the conditions to this exception. All of the Series B Common
Securities will be purchased and held directly by the Corporation.
Under another exception contained in the Plan Asset Regulation, if the
Series B Capital Securities were to qualify as "publicly offered securities,"
the assets of the Series B Trust would not be deemed to be "plan assets" by
reason of a Plan's acquisition or holding of such securities. The Series B
Capital Securities would qualify as "publicly offered securities" if, among
other requirements, they are offered pursuant to an effective registration
statement, are owned by 100 or more investors independent of the Trust and each
other, and are subsequently registered under the Exchange Act. It is expected
that the 100 investor requirement will not be satisfied and that the Series B
Capital Securities will not be registered under the Exchange Act.
There can be no assurance that any of the exceptions set forth in the
Plan Assets Regulation will apply to the purchase of Series B Capital Securities
and, as a result, an investing Plan's assets could be considered to include an
undivided interest in the Series B Subordinated Debentures held by the Series B
Trust. In the event that assets of the Series B Trust are considered assets of
an investing Plan, the Declaration Trustees, the Corporation, and other persons,
in providing services with respect to the Series B Subordinated Debentures, may
be considered fiduciaries to such Plan and subject to the fiduciary
responsibility provisions of Title I of ERISA. In addition, certain transactions
involving the Series B Trust and/or the Series B Capital Securities could be
deemed to constitute direct or indirect prohibited
S-31
<PAGE> 35
transactions under ERISA and Section 4975 of the Tax Code with respect to a
Plan. For example, if the Corporation or any Trustee is a party in interest or a
fiduciary with respect to an investing Plan (either directly or by reason of its
ownership of its subsidiaries), extensions of credit between the Corporation and
the Series B Trust (as represented by the Series B Subordinated Debentures and
the Guarantee) would likely be prohibited by Section 406(a)(1)(B) of ERISA and
Section 4975(c)(1)(B) of the Tax Code.
The DOL has issued five Prohibited Transaction Class Exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited transactions
resulting from the purchase or holding of the Series B Capital Securities,
assuming that assets of the Series B Trust were deemed to be "plan assets" of
Plans investing in the Series B Trust (see above). Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 91-38 (for certain transactions involving bank collective investment
funds), PTCE 95-60 (for certain transactions involving insurance company general
accounts), PTCE 90-1 (for certain transactions involving insurance company
pooled separate accounts), and PTCE 84-14 (for certain transactions determined
by independent qualified professional asset managers).
Because of ERISA's prohibitions and those of Section 4975 of the Tax
Code, the Series B Capital Securities may not be purchased or held by any Plan,
any entity whose underlying assets include "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity"), or any person having "plan
assets" of any Plan, unless such purchase or holding is covered by the exemptive
relief provided by PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or another
applicable exemption. If a purchaser or holder of the Series B Capital
Securities that is a Plan or a Plan Asset Entity elects to rely on an exemption
other than PTCE 96-23, 95-60, 91-38, 90-1 or 84-14, the Corporation and the
Series B Trust may require a satisfactory opinion of counsel or other evidence
with respect to the availability of such exemption for such purchase and
holding. Any purchaser or holder of the Series B Capital Securities or any
interest in such Series B Capital Securities will be deemed to have represented
by its purchase and holding of such Series B Capital Securities that either (a)
the purchaser and holder is not a Plan or a Plan Asset Entity and is not
purchasing such securities on behalf of or with "plan assets" of any Plan, or
(b) the purchase and holding of the Series B Capital Securities is covered by
the exemptive relief provided by PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or
another applicable exemption and the Corporation or Trustees are not
"fiduciaries" within the meaning of Section 3(21) of ERISA or the regulations
under ERISA.
Due to the complexity of these rules and the penalties that may be
imposed upon persons involved in non-exempt prohibited transactions, it is
particularly important that fiduciaries or other persons investing in the Series
B Capital Securities on behalf of or with "plan assets" of any Plan consult with
their own counsel regarding the potential consequences if the assets of the
Series B Trust were deemed to be "plan assets" and the availability of exemptive
relief under PTCE 96-23, 95-60, 91-38, 90-1, or 84-14 or another applicable
exemption.
Governmental Plans, as defined in Section 3(32) of ERISA, are not subject
to ERISA, and also are not subject to the prohibited transaction provisions of
Section 4975 of the Tax Code. However, state laws or regulations governing the
investment and management of the assets of such plans may contain fiduciary and
prohibited transaction provisions similar to those under ERISA and the Tax Code
discussed above. Accordingly, fiduciaries of government plans, in consultation
with their advisers, should consider the impact of their respective state laws
on investments in the Series B Capital Securities, and the considerations
discussed above, to the extent applicable.
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<PAGE> 36
UNDERWRITING
Under the terms and subject to the conditions contained in an
Underwriting Agreement, dated the date of this Prospectus Supplement (the
"Underwriting Agreement"), the Underwriters named below, for whom ______________
_________________________________________________________________are acting as
Representatives, have severally agreed to purchase, and the Series B Trust has
agreed to sell to them, severally but not jointly, the Liquidation Amount of the
Series B Capital Securities set forth opposite their names below:
<TABLE>
<CAPTION>
Liquidation Amount
of the Series B
Name Capital Securities
---- ------------------
----------------
<S> <C>
Total...................................................................................
================
</TABLE>
Under the terms and conditions of the Underwriting Agreement, in the event
of a default by an Underwriter, in certain circumstances, the purchase
commitments of non-defaulting Underwriters may be increased or the Underwriting
Agreement may be terminated.
The initial purchase price for the Series B Capital Securities will be the
initial offering price set forth on the cover page of this Prospectus Supplement
(the "Series B Capital Securities Offering Price"). The Underwriters propose to
offer the Series B Capital Securities to certain dealers at the Series B Capital
Securities Offering Price less a concession not in excess of $ ______ per Series
B Capital Security. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of $ _______ per Series B Capital Security to certain
other dealers. After the Series B Capital Securities are released for sale, the
Series B Capital Securities Offering Price and other selling terms may from time
to time be varied by the Underwriters.
In connection with this Offering, the Underwriters and any selling group
members and their respective affiliates may engage in transactions effected in
accordance with Rule 104 of the Securities and Exchange Commission's Regulation
M that are intended to stabilize, maintain, or otherwise affect the market price
of the Series B Capital Securities. Such transactions may include over-allotment
transactions in which an Underwriter creates a short position in its own account
by selling more Series B Capital Securities than it is committed to purchase
from the Series B Trust. In such a case, to cover all or part of the short
position, such Underwriter may purchase Series B Capital Securities in the open
market following completion of the initial offering of the Series B Capital
Securities. The Underwriters also may engage in stabilizing transactions in
which they bid for, and purchase, Series B Capital Securities at a level above
that which might otherwise prevail in the open market for the purpose of
preventing or retarding a decline in the market price of the Series B Capital
Securities. The Underwriters also may reclaim any selling concessions allowed to
a dealer if an Underwriter repurchases shares distributed by that dealer. Any of
the foregoing transactions may result in the maintenance of a price for the
Series B Capital Securities at a level above that which might otherwise prevail
in the open market. Neither the Corporation nor any Underwriter makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Series B Capital
Securities. The Underwriters are not required to engage in any of the foregoing
transactions and, if commenced, such transactions may be discontinued at any
time without notice.
In view of the fact that the proceeds from the sale of the Series B Capital
Securities will be used to purchase the Series B Subordinated Debentures issued
by the Corporation, the Underwriting Agreement provides that the Corporation
will pay as compensation for the Underwriters arranging the investment therein
of such proceeds an amount of $_____________ per Series B Capital Security ( or
$__________ in the aggregate) for the accounts of the Underwriters.
S-33
<PAGE> 37
Because the National Association of Securities Dealers, Inc. ("NASD") is
expected to view the Series B Capital Securities as interests in a direct
participation program, the offering of the Series B Capital Securities is being
made in compliance with the applicable provisions of Rule 2810 of the NASD's
Conduct Rules. Offers and sales of Series B Capital Securities will be made only
to institutional investors for whom an investment in non-convertible investment
grade preferred securities is appropriate. The Underwriters may not confirm
sales to any accounts over which they exercise discretionary authority without
the prior written approval of the transaction by the customer.
The Corporation and the Series B Trust have agreed that, during the period
beginning on the date of the Underwriting Agreement and continuing to and
including the closing date, they will not offer, sell, contract to sell, or
otherwise dispose of (other than in an offering made exclusively outside the
United States) any securities of the Corporation or the Series B Trust
substantially similar to the Series B Capital Securities, or any securities
convertible into or exchangeable for the Series B Capital Securities, without
the prior written consent of the Underwriters.
The Series B Capital Securities are a new issue of securities with no
established trading market. The Corporation and the Series B Trust do not intend
to apply for listing of the Series B Capital Securities on any national
securities exchange, but the Corporation and the Series B Trust have been
advised by the Underwriters that they intend to make a market in the Series B
Capital Securities. However, the Underwriters are not obligated to do so and
such market making may be interrupted or discontinued at any time without notice
at the sole discretion of any Underwriter. Accordingly, no assurance can be
given as to the development of liquidity of any market for the Series B Capital
Securities.
The Corporation and the Series B Trust have agreed to indemnify the
Underwriters and certain other persons against, or contribute to payments that
the Underwriters may be required to make in respect of, certain liabilities,
including liabilities under the Securities Act.
Certain of the Underwriters or their affiliates have provided from time to
time, and expect to provide in the future, investment or commercial banking
services to the Corporation and its affiliates, for which such Underwriters or
their affiliates have received or will receive customary fees and commissions.
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Series B
Capital Securities, the enforceability of the Series B Declaration, and the
formation of the Series B Trust will be passed upon on behalf of the Corporation
and the Series B Trust by Richards, Layton & Finger P.A., special Delaware
counsel to the Corporation and the Series B Trust. The validity of the Series B
Subordinated Debentures and the Series B Guarantee will be passed upon for the
Corporation and the Series B Trust by Porter, Wright, Morris & Arthur and for
the Underwriters by Sullivan & Cromwell. Porter, Wright, Morris & Arthur and
Sullivan & Cromwell will rely as to certain matters of Delaware law on the
opinion of Richards, Layton & Finger, P.A. Sullivan & Cromwell from time to
time performs legal services for the Corporation. As of __________, 19__,
members of Porter, Wright, Morris & Arthur participating in the representation
of the Corporation and the Series B Trust on this matter beneficially owned an
aggregate of ____ shares of the Corporation's Common Stock.
S-34
<PAGE> 38
PROSPECTUS
$250,000,000
HUNTINGTON BANCSHARES INCORPORATED
JUNIOR SUBORDINATED DEBENTURES
HUNTINGTON CAPITAL II
HUNTINGTON CAPITAL III
HUNTINGTON CAPITAL IV
HUNTINGTON CAPITAL V
HUNTINGTON CAPITAL VI
CAPITAL SECURITIES
FULLY AND UNCONDITIONALLY GUARANTEED TO THE EXTENT DESCRIBED BELOW BY
HUNTINGTON BANCSHARES INCORPORATED
Huntington Bancshares Incorporated, a Maryland corporation (the
"Corporation"), may from time to time offer in one or more series or issuances
its junior subordinated debentures (the "Subordinated Debentures"). The
Subordinated Debentures will be unsecured and subordinate and junior in right of
payment to all Senior Indebtedness (as defined in "Description of the
Subordinated Debentures -- Subordination") of the Corporation. If provided in an
accompanying Prospectus Supplement, the Corporation will have the right to defer
payments of interest on any series of Subordinated Debentures by extending the
interest payment period at any time or from time to time for up to such number
of consecutive interest payment periods (which shall not extend beyond the
Stated Maturity (as defined in this Prospectus) of the Subordinated Debentures)
with respect to each deferral period as may be specified in such Prospectus
Supplement (each, an "Extension Period"). In such circumstances, however, the
Corporation would not be permitted, subject to certain exceptions described in
this Prospectus, to declare or pay any dividends, distributions, or other
payments with respect to, or repay, repurchase, redeem, or otherwise acquire,
the Corporation's capital stock or debt securities that rank pari passu in all
respects with, or junior to, such series of Subordinated Debentures. See
"Description of the Subordinated Debentures -- Option to Defer Interest
Payments" and "-- Certain Covenants of the Corporation."
Huntington Capital II, Huntington Capital III, Huntington Capital IV,
Huntington Capital V, and Huntington Capital VI, each a statutory business trust
created under the laws of the State of Delaware (each, a "Trust," and
collectively, the "Trusts"), may severally offer, from time to time, capital
securities (the "Capital Securities") representing preferred beneficial
interests in such Trust. The Corporation will be the owner of the common
securities representing common ownership interests in such Trust (the "Common
Securities" and, together with the Capital Securities, the "Trust Securities").
Holders of the Capital Securities will be entitled to receive preferential
cumulative cash distributions ("Distributions") accumulating from the date of
original issuance and payable periodically as provided in an accompanying
Prospectus Supplement.
(CONTINUED ON NEXT PAGE)
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------
THESE SECURITIES ARE NOT DEPOSITS OR OTHER OBLIGATIONS OF A BANK AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY.
------------------
, 1998
<PAGE> 39
(cover page continued)
Concurrently with the issuance by a Trust of its Capital Securities, such
Trust will invest the proceeds received in respect of the Capital Securities and
Common Securities in a corresponding series of the Corporation's Subordinated
Debentures (the "Corresponding Subordinated Debentures") with interest,
repayment, and other terms corresponding to the terms of that Trust's Capital
Securities (the "Related Capital Securities"). The Corresponding Subordinated
Debentures will be the sole assets of each Trust, and payments under the
Corresponding Subordinated Debentures will be the only revenue of each Trust. If
provided in an accompanying Prospectus Supplement, the Corporation may, upon
receipt of approval of the Board of Governors of the Federal Reserve System (the
"Federal Reserve"), if such approval is then required, redeem the Corresponding
Subordinated Debentures (and cause the redemption of the related Trust
Securities) or may dissolve each Trust and cause after satisfaction of the
claims of creditors of the Trust as provided by applicable law the Corresponding
Subordinated Debentures to be distributed to the holders of the Related Capital
Securities in liquidation of their interests in such Trust. See "Description of
the Capital Securities -- Liquidation Distribution Upon Dissolution."
If provided in an accompanying Prospectus Supplement, the Corporation will
have the right to defer payments of interest on any series of Corresponding
Subordinated Debentures. If interest payments are so deferred, Distributions on
the Related Capital Securities also will be deferred and the Corporation will
not be permitted, subject to certain exceptions described in this Prospectus, to
declare or pay any dividends, distributions, or other payments with respect to,
or repay, repurchase, redeem, or otherwise acquire, the Corporation's capital
stock or debt securities that rank pari passu with, or junior to, the
Corresponding Subordinated Debentures. During an Extension Period, Distributions
will continue to accumulate (and the Capital Securities will accumulate
additional Distributions at the rate per annum set forth in the accompanying
Prospectus Supplement). See "Description of the Capital Securities --
Distributions."
Taken together, the Corporation's obligations under each series of
Corresponding Subordinated Debentures, the Indenture, the related Declaration,
and the related Guarantee (each, as defined in this Prospectus), in the
aggregate, provide a full, irrevocable, and unconditional guarantee of payments
of distributions and other amounts due on the Related Capital Securities. See
"Relationship Among the Capital Securities, the Corresponding Subordinated
Debentures, and the Guarantees -- Full and Unconditional Guarantee." The payment
of Distributions with respect to the Capital Securities of each Trust and
payments on liquidation or redemption with respect to such Capital Securities,
in each case out of funds held by such Trust, are each irrevocably guaranteed by
the Corporation to the extent described in this Prospectus (each, a
"Guarantee"). See "Description of the Guarantees." The obligations of the
Corporation under each Guarantee will be subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation.
The Subordinated Debentures and Capital Securities may be offered in
amounts, at prices, and on terms to be determined at the time of offering;
provided, however, the aggregate initial public offering price of all
Subordinated Debentures (other than Corresponding Subordinated Debentures) and
Capital Securities (including the Corresponding Subordinated Debentures) issued
pursuant to the Registration Statement of which this Prospectus forms a part
shall not exceed $250,000,000. Certain specific terms of the Subordinated
Debentures or Capital Securities in respect of which this Prospectus is being
delivered will be described in an accompanying Prospectus Supplement, including
without limitation and where applicable and to the extent not set forth in this
Prospectus, (a) in the case of Subordinated Debentures, the specific
designation, aggregate principal amount, denominations, Stated Maturity
(including any provisions for the shortening or extension of such Stated
Maturity), interest payment dates, interest rate (which may be fixed or
variable) or method of calculating interest, if any, applicable Extension Period
or interest deferral terms, if any, place or places where principal, premium, if
any, and interest, if any, will be payable, any terms of redemption, any sinking
fund provisions, terms for any conversion or exchange into other securities,
initial offering or purchase price, methods of distribution, and any other
special terms, and (b) in the case of Capital Securities, the identity of the
Trust, specific title, aggregate amount, stated liquidation amount, number of
securities, Distribution rate or method of calculating such rate, Distribution
payment dates, applicable Distribution deferral terms, if any, place or places
where Distributions will be payable, any terms of redemption, exchange, initial
offering or purchase price, methods of distribution, and any other special
terms.
2
<PAGE> 40
The Prospectus Supplement also will contain information, as applicable,
about certain United States federal income tax consequences relating to the
Subordinated Debentures or Capital Securities.
The Subordinated Debentures and Capital Securities may be sold to or
through underwriters, through dealers, remarketing firms, or agents, or directly
to purchasers. See "Plan of Distribution." The names of any underwriters,
dealers, remarketing firms, or agents involved in the sale of Subordinated
Debentures or Capital Securities in respect of which this Prospectus is being
delivered and any applicable fee, commission, or discount arrangements with them
will be set forth in a Prospectus Supplement. The Prospectus Supplement will
state whether the Subordinated Debentures or Capital Securities will be listed
on any national securities exchange or automated quotation system. If the
Subordinated Debentures or Capital Securities are not listed on any national
securities exchange or automated quotation system, there can be no assurance
that there will be a secondary market for the Subordinated Debentures or Capital
Securities.
This Prospectus may not be used to consummate sales of Subordinated
Debentures or Capital Securities unless accompanied by a Prospectus Supplement.
3
<PAGE> 41
AVAILABLE INFORMATION
The Corporation is subject to the reporting requirements of Sections 13 and
15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Any reports and other information filed by the Corporation with the Securities
and Exchange Commission (the "Commission") may be inspected and copied at the
public reference facilities maintained by the Commission at Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's regional
offices in Chicago, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661, and in New York, 7 World Trade Center, 13th Floor, New York, New York
10048. Copies of such material also may be obtained by mail from the Public
Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. Such material also may be accessed
electronically by means of the Commission's home page on the Internet
(http://www.sec.gov). Copies of such reports, proxy statements, and other
information filed by the Corporation can be inspected and copied at the offices
of the Nasdaq National Market at 1735 K Street, N.W., Washington, D.C. 20006.
The Corporation and the Trusts have filed with the Commission a
Registration Statement on Form S-3 (together with all amendments and exhibits to
such Registration Statement, the "Registration Statement") under the Securities
Act of 1933, as amended (the "Securities Act") with respect to the securities
offered by this Prospectus. This Prospectus does not contain all of the
information set forth in the Registration Statement, certain portions of which
have been omitted as permitted by the rules and regulations of the Commission.
For further information with respect to the Corporation and the securities
offered by this Prospectus, reference is made to the Registration Statement and
the exhibits and financial statements, notes, and schedules filed as part of
such Registration Statement or incorporated by reference in such Registration
Statement. These documents may be inspected at the public reference facilities
of the Commission, at the addresses set forth above. Statements made in this
Prospectus concerning the contents of any documents referred to in this
Prospectus are not necessarily complete, and in each instance are qualified in
all respects by reference to the copy of such document filed as an exhibit to,
or incorporated by reference in, the Registration Statement.
No separate financial statements of any Trust have been included in this
Prospectus and no separate financial statements will be prepared in the future.
The Corporation and the Trusts do not consider that such financial statements
would be material to holders of the Capital Securities because (a) all of the
voting securities of each Trust will be owned, directly or indirectly, by the
Corporation, (b) each Trust has no independent operations and exists for the
sole purpose of issuing securities representing undivided beneficial interests
in the assets of that Trust and investing the proceeds from the sale of such
securities in the Subordinated Debentures issued by the Corporation, and (c) the
obligations of each Trust under its Capital Securities are fully and
unconditionally guaranteed by the Corporation to the extent such Trust has funds
available to meet such obligations. In addition, the Corporation does not expect
that any of the Trusts will be filing reports under the Exchange Act with the
Commission.
4
<PAGE> 42
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Corporation pursuant to Section 13(a), 14, or 15(d) of the Exchange Act are
incorporated in this Prospectus by reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31,
1997;
2. Quarterly Report on Form 10-Q for the quarter ended March 31,
1998; and
3. Current Reports on Form 8-K, dated January 14, March 11, and April
14, 1998, to report annual and/or quarterly earnings and/or
certain developments.
All other documents filed by the Corporation pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering of securities made by this Prospectus
(the "Offering") will be deemed to be incorporated by reference in this
Prospectus from the date such other documents are filed. Any statement made or
incorporated by reference in this document will be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently filed document which
also is or is deemed to be incorporated by reference in this Prospectus modifies
or supersedes such statement. Any statement so modified or superseded will not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
THIS PROSPECTUS INCORPORATES OTHER DOCUMENTS BY REFERENCE WHICH ARE NOT
PRESENTED IN OR DELIVERED WITH THIS PROSPECTUS. COPIES OF THESE OTHER DOCUMENTS
ARE AVAILABLE WITHOUT CHARGE UPON WRITTEN OR ORAL REQUEST ADDRESSED TO CHERI
GRAY, INVESTOR RELATIONS ANALYST, HUNTINGTON BANCSHARES INCORPORATED, HUNTINGTON
CENTER, 41 SOUTH HIGH STREET, COLUMBUS, OHIO 43287, TELEPHONE (614) 480-3803.
5
<PAGE> 43
THE TRUSTS
Each Trust is a statutory business trust created under the Delaware
Business Trust Act, as amended, pursuant to a declaration of trust executed by
the Corporation, as Sponsor, a Regular Trustee (as defined below), and the
Delaware Trustee (defined below) and the filing of a certificate of trust with
the Secretary of State of the State of Delaware. Each declaration of trust will
be amended and restated in its entirety (each, as so amended and restated, a
"Declaration") substantially in the form filed as an exhibit to the Registration
Statement of which this Prospectus forms a part. Each Declaration will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
Each Trust will use all the proceeds derived from the issuance of the
Capital Securities and the Common Securities to purchase the Corresponding
Subordinated Debentures and, accordingly, the assets of each Trust will consist
solely of the Corresponding Subordinated Debentures. Each Trust exists for the
exclusive purpose of (a) issuing and selling the Trust Securities representing
undivided beneficial ownership interests in the assets of the Trust, (b)
investing the gross proceeds from the sale of the Trust Securities to acquire
the Corresponding Subordinated Debentures, and (c) engaging in only those other
activities necessary or incidental thereto. No Trust may borrow money or issue
debt or mortgage or pledge any of its assets.
All of the Common Securities of each Trust will be owned by the
Corporation. The Common Securities of a Trust will rank pari passu, and payments
on such Common Securities will be made pro rata, with the Capital Securities of
such Trust, except upon the occurrence and continuance of an Indenture Event of
Default. In that event, the rights of the Corporation, as holder of the Common
Securities, to payment in respect of Distributions and upon liquidation or
redemption will be subordinated to the rights of the holders of the Capital
Securities of such Trust. See "Description of Capital Securities --
Subordination of Common Securities." The Corporation will acquire Common
Securities of each Trust in an aggregate liquidation amount equal to not less
than 3% of the total capital of the Trust.
Each Trust's business and affairs will be conducted by its trustees
("Declaration Trustees"), which are appointed by the Corporation as holder of
the Trust's Common Securities. Each Trust's Declaration Trustees will consist of
three individual trustees, who are employees or officers of or who are
affiliated with the Corporation (the "Regular Trustees"); The Chase Manhattan
Bank, as Property Trustee (the "Property Trustee"); and Chase Manhattan Bank
Delaware, which maintains its principal place of business in the State of
Delaware, as Delaware Trustee (the "Delaware Trustee"). The Chase Manhattan Bank
also acts as the sole indenture trustee under the Indentures and Guarantees. See
"Description of the Subordinated Debentures" and "Description of the
Guarantees." The Corporation, as the holder of all the Common Securities, has
the right to appoint, remove, or replace any of the Declaration Trustees and to
increase or decrease the number of Declaration Trustees, provided there always
must be a Delaware Trustee, a Property Trustee, and a Regular Trustee. Unless
otherwise specified in the applicable Prospectus Supplement, each Trust has a
term of approximately 55 years, but may dissolve earlier as provided in the
applicable Declaration.
Under the Indenture, the Corporation, as borrower, has agreed to pay all
fees and expenses related to the organization and operation of each Trust
(including any taxes, duties, assessments, or governmental charges of whatever
nature (other than withholding taxes) imposed by the United States or any other
domestic taxing authority upon the Trust) and be responsible for all debts and
obligations of each Trust (other than with respect to the Capital Securities).
See "Description of the Capital Securities -- Expenses and Taxes" and
"Description of the Subordinated Debentures -- Certain Covenants of the
Corporation."
For so long as the Capital Securities of a Trust remain outstanding, the
Corporation has agreed to:
o maintain directly or indirectly 100% ownership of the Common
Securities of that Trust,
o cause the Trust to remain a statutory business trust and not to
voluntarily dissolve, wind-up, liquidate, or terminate the Trust,
except as permitted by the Declaration,
o use its reasonable best efforts to ensure that the Trust will not
be an "investment company" for purposes of the Investment Company
Act of 1940, as amended, and
6
<PAGE> 44
o take no action that would be reasonably likely to cause the Trust
to be classified as an association or a publicly traded
partnership taxable as a corporation for United States federal
income tax purposes.
The Declarations and the Guarantees incorporate by reference the terms of
the Trust Indenture Act. The rights of the holders of the Capital Securities,
including economic rights, rights to information, and voting rights, are set
forth in the applicable Declarations and the Trust Indenture Act. See
"Description of the Capital Securities."
The location of the principal executive office of each Trust is c/o
Huntington Bancshares Incorporated, Huntington Center, 41 South High Street,
Columbus, Ohio 43287, and its telephone number is 614-480-8300.
THE CORPORATION
GENERAL
The Corporation was incorporated in Maryland in 1966 and is a multi-state
bank holding company headquartered in Columbus, Ohio. Its subsidiaries conduct a
full-service commercial and consumer banking business, engage in mortgage
banking, lease financing, trust services, discount brokerage services,
underwriting credit life and disability insurance, and issuing commercial paper
guaranteed by the Corporation, and provide other financial products and
services.
As of March 31, 1998, the Corporation had assets of $26.8 billion, net
loans of $17.5 billion, deposits of $17.7 billion, and shareholders' equity of
$2.1 billion. At March 31, 1998, the Corporation's subsidiaries had a total of
459 banking offices in the following locations: 192 banking offices in Ohio, 135
banking offices in Michigan, 51 banking offices in Florida, 44 banking offices
in West Virginia, 24 banking offices in Indiana, 13 banking offices in Kentucky,
and one foreign office in each of the Cayman Islands and Hong Kong. The
Huntington Mortgage Company, a wholly-owned subsidiary, has loan origination
offices throughout the Midwest and East Coast. In addition to these offices, the
Corporation offers its products and services through its 24-hour telephone bank,
a network of more than 1,250 ATMs, and its Web Bank at www.huntington.com.
Information contained in the Corporation's web site shall not be deemed to be
part of this Prospectus.
Effective as of June 30, 1997, the Corporation took advantage of
newly-effective interstate banking legislation to consolidate substantially all
of its individual subsidiary bank charters into one lead bank, The Huntington
National Bank.
The principal executive offices of the Corporation are located at
Huntington Center, 41 South High Street, Columbus, Ohio 43287, and its telephone
number is 614-480-8300.
RECENT AND PENDING ACQUISITIONS
The Corporation completed its acquisition of First Michigan Bank
Corporation ("First Michigan"), a $3.6 billion bank holding company
headquartered in Holland, Michigan, on September 30, 1997, in a transaction
accounted for as a pooling of interests. All financial information reported by
the Corporation, including the financial information incorporated by reference,
except dividends per share, has been restated for the First Michigan
acquisition.
On February 28, 1997, the Corporation acquired Citi-Bancshares, Inc.
("Citi-Bancshares"), a $548 million one-bank holding company headquartered in
Leesburg, Florida. On October 31, 1997, the Corporation acquired The Bank of
Winter Park ("Winter Park"), a $90 million bank headquartered in Winter Park,
Florida. These transactions were accounted for as purchases; accordingly, the
results of Citi-Bancshares and Winter Park have been included in the
Corporation's consolidated financial statements from the date of acquisition of
these banking institutions.
7
<PAGE> 45
In December 1997, the Corporation announced the acquisition of 60 banking
offices in Florida to be sold by NationsBank Corporation (the "Branch
Acquisition") in connection with the merger of Barnett Banks Inc. into
NationsBank Corporation. The Branch Acquisition is expected to add $1.6 billion
in loans and $2.6 billion in deposits to the Corporation's balance sheet. The
deposit premium, which is subject to final determination based on the deposit
levels at the closing of the Branch Acquisition, is expected to be approximately
$523 million. The Branch Acquisition has received the approval of the Office of
the Comptroller of the Currency and is expected to close in June 1998.
As of the date of this Prospectus, there are no other material acquisitions
pending; however, the Corporation continues to explore opportunities to acquire
banking and non-banking companies, both interstate and intrastate. Such future
acquisitions could involve cash, debt, equity securities, or a combination of
these forms of consideration.
OTHER INFORMATION
Other than as described in this Prospectus, there have been no material
changes in the affairs of the Corporation since the filing of its Annual Report
on Form 10-K for the year ended December 31, 1997, that have not been described
in a subsequent report filed with the SEC pursuant to the Exchange Act. See
"Incorporation of Certain Documents By Reference."
USE OF PROCEEDS
All of the net proceeds from any sale of Capital Securities will be
invested by each Trust in the Subordinated Debentures. Except as otherwise set
forth in the applicable Prospectus Supplement, the Corporation intends to use
all of the net proceeds from the sale of Subordinated Debentures for general
corporate purposes, which may include the repayment of existing indebtedness,
investments in, or extensions of credit to, its subsidiaries, the financing of
possible acquisitions, and for general working capital. Pending such use, the
net proceeds may be temporarily invested.
The proceeds from the sale of Subordinated Debentures or Capital Securities
will qualify as Tier 1, or core, capital with respect to the Corporation under
the current risk-based capital guidelines established by the Federal Reserve.
Although the Corporation does not intend to use the proceeds of the Offering for
any pending acquisition, the addition of the proceeds to the Corporation's Tier
1 capital will assist the Corporation in maintaining the quality of its capital
ratios in light of its recent acquisition activity. The Corporation continues to
explore opportunities to acquire banking and non-banking companies. The precise
amounts and timing of the application of proceeds will depend upon the funding
requirements of the Corporation and its subsidiaries and the availability of
other funds.
Based upon the historical and anticipated future growth of the Corporation
and the financial needs of the Corporation and its subsidiaries, the Corporation
may engage in additional financings of a character and amount to be determined
as the need arises.
8
<PAGE> 46
DESCRIPTION OF THE SUBORDINATED DEBENTURES
The Subordinated Debentures are to be issued in one or more series under
an Indenture, dated as of June 4, 1998, as supplemented from time to time (as so
supplemented, the "Indenture") between the Corporation and The Chase Manhattan
Bank, as trustee (the "Indenture Trustee"). This summary of certain 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 and the Trust Indenture Act. The form of Indenture has been filed
as an exhibit to the Registration Statement. The Indenture will be qualified
under the Trust Indenture Act.
GENERAL
Each series of Subordinated Debentures will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Indebtedness (as
defined below) of the Corporation. Each series of Subordinated Debentures will
rank pari passu with all other series of Subordinated Debentures issued under
the Indenture and with $200 million of obligations of the Corporation associated
with the Floating Rate Capital Securities issued by Huntington Capital I (the
"Outstanding Capital Securities"). Unless otherwise provided in the applicable
Prospectus Supplement, the Indenture does not limit the incurrence or issuance
of other secured or unsecured debt of the Corporation, whether under the
Indenture or any existing or other indenture that the Corporation may enter into
in the future or otherwise. See "-- Subordination." The Indenture also does not
limit the aggregate principal amount of Subordinated Debentures that may be
issued under the Indenture.
The Subordinated Debentures are to be issued in one or more series
pursuant to an indenture supplemental to the Indenture or a resolution of the
Corporation's Board of Directors or a committee of the Board.
The applicable Prospectus Supplement or Prospectus Supplements will
describe the following terms of the Subordinated Debentures:
o the title of the Subordinated Debentures;
o any limit upon the aggregate principal amount of the Subordinated
Debentures;
o the date or dates on which the principal of the Subordinated
Debentures is payable (the "Stated Maturity") or the method of
determination thereof;
o the rate or rates, if any, at which the Subordinated Debentures
shall bear interest, the dates on which any such interest shall be
payable (the "Interest Payment Dates"), the right, if any, of the
Corporation to defer or extend an Interest Payment Date, and the
record dates for any interest payable on any Interest Payment Date
or the method by which any of the foregoing shall be determined;
o the place or places where (subject to the terms of the Indenture
as described below under "--Payment and Paying Agents"), the
principal of (and premium, if any) and interest on the
Subordinated Debentures will be payable and where (subject to the
terms of the Indenture as described below under "-- Denominations,
Registration, and Transfer") the Subordinated Debentures may be
presented for registration of transfer or exchange and the place
or places where notices and demands to or upon the Corporation in
respect of the Subordinated Debentures and the Indentures may be
made ("Place of Payment");
o any period or periods within which, or date or dates on which, the
price or prices at which and the terms and conditions upon which
the Subordinated Debentures may be redeemed, in whole or in part,
at the option of the Corporation or a holder thereof;
o the obligation or the right, if any, of the Corporation or a
holder of the Subordinated Debentures to redeem, purchase, or
repay the Subordinated Debentures and the period or periods within
which, the price or prices at which, the currency or currencies
(including currency unit or units) in which, and the other terms
and conditions upon which the Subordinated Debentures shall be
redeemed, repaid, or purchased, in whole or in part, pursuant to
such obligation;
o the denominations in which any Subordinated Debentures shall be
issuable;
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o if other than in U.S. Dollars, the currency or currencies
(including currency unit or units) in which the principal of (and
premium, if any) and interest on the Subordinated Debentures shall
be payable, or in which the Subordinated Debentures shall be
denominated;
o any additions, modifications, or deletions in the events of
default under the Indenture or covenants of the Corporation
specified in the Indenture with respect to the Subordinated
Debentures;
o if other than the principal amount thereof, the portion of the
principal amount of Subordinated Debentures that shall be payable
upon declaration of acceleration of maturity;
o any additions or changes to the Indenture with respect to a series
of Subordinated Debentures as shall be necessary to permit or
facilitate the issuance of such series in bearer form, registrable
or not registrable as to principal, and with or without interest
coupons;
o any index or indices used to determine the amount of payments of
principal of (and premium, if any) on the Subordinated Debentures
and the manner in which such amounts will be determined;
o the terms and conditions relating to the issuance of a temporary
global security representing all of the Subordinated Debentures of
such series and the exchange of such temporary global security for
definitive Subordinated Debentures of such series;
o subject to the terms described herein under "--Global Subordinated
Debentures," whether the Subordinated Debentures of the series
shall be issued in whole or in part in the form of one or more
global securities and, in such case, the Depository for such
global securities, which Depository shall be a clearing agency
registered under the Exchange Act;
o the appointment of any paying agent or agents;
o the terms and conditions of any obligation or right of the
Corporation or a holder to convert or exchange the Subordinated
Debentures into Capital Securities;
o the form of Declaration and Guarantee; and
o any other terms of the Subordinated Debentures not inconsistent
with the provisions of the Indenture.
The Subordinated Debentures may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain United States federal
income tax consequences and special considerations applicable to any such
Subordinated Debentures will be described in the applicable Prospectus
Supplement.
If the purchase price of any of the Subordinated Debentures is payable in
one or more foreign currencies or currency units or if any Subordinated
Debentures are denominated in one or more foreign currencies or currency units
or if the principal of (and premium, if any) or interest, if any, on any
Subordinated Debentures is payable in one or more foreign currencies or currency
units, the restrictions, elections, certain United States federal income tax
consequences, specific terms, and other information with respect to such series
of Subordinated Debentures and such foreign currency or currency units will be
set forth in the applicable Prospectus Supplement.
If any index is used to determine the amount of payments of principal of
(and premium, if any) or interest on any series of Subordinated Debentures,
special United States federal income tax, accounting, and other considerations
applicable to such series will be described in the applicable Prospectus
Supplement.
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise specified in the applicable Prospectus Supplement, the
Subordinated Debentures will be issuable only in registered form without
coupons. Subordinated Debentures of any series will be exchangeable for other
Subordinated Debentures of the same issue and series, of any authorized
denominations, of a like aggregate principal amount, of the same original issue
date and Stated Maturity, and bearing the same interest rate.
Subordinated Debentures may be presented for exchange as provided above,
and may be presented for registration of transfer (with the form of transfer
endorsed on such Subordinated Debentures, or a satisfactory written instrument
of transfer, duly executed), at the office of the appropriate securities
registrar or at the office of any transfer
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<PAGE> 48
agent designated by the Corporation for such purpose with respect to any series
of Subordinated Debentures (which may be specified in the applicable Prospectus
Supplement), without service charge and upon payment of any taxes and other
governmental charges as described in the Indenture. The Corporation will appoint
the Indenture Trustee as securities registrar under the Indenture. If the
applicable Prospectus Supplement refers to any transfer agents (in addition to
the securities registrar) initially designated by the Corporation with respect
to any series of Subordinated Debentures, the Corporation may at any time
rescind the designation of any such transfer agent or approve a change in the
location through which any such transfer agent acts, provided that the
Corporation maintains a transfer agent in each Place of Payment for such series.
The Corporation may at any time designate additional transfer agents with
respect to any series of Subordinated Debentures.
In the event of any redemption, neither the Corporation nor the Indenture
Trustee will be required to (a) issue, register the transfer of, or exchange
Subordinated Debentures of any series during the period beginning at the opening
of business 15 days before the day of selection for redemption of Subordinated
Debentures of that series and ending at the close of business on the day of
mailing of the relevant notice of redemption, or (b) transfer or exchange any
Subordinated Debentures so selected for redemption, except, in the case of any
Subordinated Debentures being redeemed in part, any portion not to be redeemed.
GLOBAL SUBORDINATED DEBENTURES
The Subordinated Debentures of a series may be issued in whole or in part
in the form of one or more global Subordinated Debentures that will be deposited
with, or on behalf of, the Depository identified in the Prospectus Supplement
relating to such series. Global Subordinated Debentures may be issued only in
fully registered form and in either temporary or permanent form. Unless and
until it is exchanged in whole or in part for the individual Subordinated
Debentures represented by such global security, a global Subordinated Debenture
may not be transferred except as a whole by the Depository for such global
Subordinated Debenture to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by the
Depository or any nominee to a successor Depository or any nominee of such
successor.
So long as the Depository for a global Subordinated Debenture, or its
nominee, is the registered owner of such global Subordinated Debenture, such
Depository or such nominee, as the case may be, will be considered the sole
owner or holder of the Subordinated Debentures represented by such global
Subordinated Debenture for all purposes under the Indenture governing such
Subordinated Debentures. Except as provided below, owners of beneficial
interests in a global Subordinated Debenture will not be entitled to have any of
the individual Subordinated Debentures of the series represented by such global
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Subordinated Debentures of
such series in definitive form, and will not be considered the owners or holders
of such Subordinated Debentures under the Indenture. See "Book-Entry Issuance."
The specific terms of the depository arrangement with respect to a series of
Subordinated Debentures will be described in the Prospectus Supplement relating
to such series.
OPTION TO DEFER INTEREST PAYMENTS
If provided in the applicable Prospectus Supplement, the Corporation will
have the right at any time and from time to time during the term of any series
of Subordinated Debentures to defer payment of interest for up to such number of
consecutive interest payment periods as may be specified in the applicable
Prospectus Supplement, subject to the terms, conditions, and covenants, if any,
specified in such Prospectus Supplement, provided that such Extension Period may
not extend beyond the Stated Maturity of such series of Subordinated Debentures.
Certain United States federal income tax consequences and special considerations
applicable to any such Subordinated Debentures will be described in the
applicable Prospectus Supplement.
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REDEMPTION
Unless otherwise indicated in the applicable Prospectus Supplement,
Subordinated Debentures will not be subject to any sinking fund.
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation may, at its option and subject to receipt of prior approval by the
Federal Reserve if such approval is then required under applicable capital
guidelines or policies, redeem the Subordinated Debentures of any series in
whole at any time or in part from time to time. If the Subordinated Debentures
of any series are so redeemable only on or after a specified date or upon the
satisfaction of additional conditions, the applicable Prospectus Supplement will
specify such date or describe such conditions. Except as otherwise specified in
the applicable Prospectus Supplement, the redemption price for any Subordinated
Debenture so redeemed shall equal any accrued and unpaid interest to the date
fixed for redemption, plus 100% of the principal amount of such Subordinated
Debenture. Except as otherwise specified in the applicable Prospectus
Supplement, if a Special Event (as defined below) in respect of a series of
Subordinated Debentures shall occur and be continuing, the Corporation may, at
its option and subject to the receipt of any necessary prior approval of the
Federal Reserve, redeem within 90 days following the occurrence of such Special
Event the Subordinated Debentures in whole (but not in part) at a redemption
price equal to 100% of the principal amount of such Subordinated Debentures then
outstanding plus accrued and unpaid interest to the date fixed for redemption,
except as otherwise specified in the applicable Prospectus.
A "Special Event" means a Tax Event, a Regulatory Capital Event, or an
Investment Company Event. A "Tax Event" means the receipt by the Corporation of
an opinion of counsel, rendered by a law firm experienced in such matters, to
the effect that, as a result of (a) any amendment to, clarification of, change
in, or announced proposed change in the laws (or any regulations promulgated
under such laws) of the United States or any political subdivision or taxing
authority of the United States or (b) any judicial decision, any official
administrative pronouncement, ruling (including any private letter ruling or
technical advice memorandum, or field service advice), revenue agent's report,
regulatory procedure, notice, or pronouncement, including any notice or
announcement of intent to adopt such procedures or regulations (an
"Administrative Action"), regardless of whether such judicial decision or
Administrative Action is issued to or in connection with a proceeding involving
the Corporation or a Trust and whether or not subject to review or appeal, which
amendment, clarification, change, Administrative Action, or decision is enacted,
promulgated, or announced, in each case, on or after the date of original
issuance of the Capital Securities, there is more than an insubstantial risk
that:
o the Trust is, or will be within 90 days of the date of such opinion,
subject to United States federal income tax with respect to income
received or accrued on the Corresponding Subordinated Debentures,
o interest payable by the Corporation on such Corresponding Subordinated
Debentures is not, or within 90 days of the date of such opinion will not
be, deductible by the Corporation, in whole or in part, for United States
federal income tax purposes, or
o the Trust is, or will be within 90 days of the date of such opinion,
subject to more than a de minimis amount of other taxes, duties, or other
governmental charges.
A "Regulatory Capital Event" means that the Corporation shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to or change
(including any announced prospective change) in the laws (or any regulations
promulgated under such laws) of the United States or any rules, guidelines, or
policies of the Federal Reserve, or (b) any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or which pronouncement or
decision is announced or which action is taken on or after the date of original
issuance of the Capital Securities, the Capital Securities do not constitute, or
within 90 days of such date, will not constitute Tier 1 capital (or its then
equivalent); provided, however, that the distribution of the Subordinated
Debentures in connection with the liquidation of the Trust by the Corporation
shall not in and of itself constitute a Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event or an Investment
Company Event.
An "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 to be registered under the Investment Company Act of 1940, as amended,
which Change in 1940 Act Law becomes effective on or after the date of original
issuance of the Capital Securities.
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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 Corporation
defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on such Subordinated Debentures or portions of
such Subordinated Debentures called for redemption.
CONVERSION OR EXCHANGE
If and to the extent indicated in the applicable Prospectus Supplement,
the Subordinated Debentures of any series may be convertible or exchangeable
into Subordinated Debentures of another series or into Capital Securities of
another series. The specific terms on which Subordinated Debentures of any
series may be so converted or exchanged will be set forth in the applicable
Prospectus Supplement. Such terms may include provisions for conversion or
exchange, either mandatory, at the option of the holder, or at the option of the
Corporation, in which case the number of shares of Capital Securities or other
securities to be received by the holders of Subordinated Debentures would be
calculated as of a time and in the manner stated in the applicable Prospectus
Supplement.
CERTAIN COVENANTS OF THE CORPORATION
The Corporation will covenant, as to each series of Corresponding
Subordinated Debentures, that if and so long as the Trust is the holder of all
Corresponding Subordinated Debentures, the Corporation, as borrower, will pay to
the Trust all fees and expenses related to the Trust and the offering of the
Related Capital Securities and will pay, directly or indirectly, all ongoing
costs, expenses, and liabilities of the Trust (including any taxes, duties,
assessments, or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States or any domestic taxing authority upon the
Trust, but excluding obligations under the Related Capital Securities).
The Corporation also will covenant, as to each series of Subordinated
Debentures, that it will not, and will not permit any subsidiary of the
Corporation to:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
any of the Corporation's capital stock, or
o make any payment of principal, interest, and premium, if any, on
or repay, repurchase, or redeem any debt securities of the
Corporation (including other Subordinated Debentures) that rank
pari passu with or junior in interest to the Subordinated
Debentures, or
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior in
interest to the Subordinated Debentures,
if at such time:
o there shall have occurred any event of which the Corporation has
actual knowledge that with the giving of notice or the lapse of
time, or both, would constitute an Indenture Event of Default with
respect to the Subordinated Debentures and in respect of which the
Corporation shall not have taken reasonable steps to cure, or
o the Corporation shall be in default with respect to its payment of
any obligations under the Guarantee relating to any series of
Capital Securities, or
o the Corporation shall have given notice of its election of an
Extension Period as provided in the Indenture and shall not have
rescinded such notice, or such Extension Period, or any extension
of such period, shall be continuing.
The following are permitted exceptions to this covenant:
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o repurchases, redemptions, or other acquisitions of shares of
capital stock of the Corporation in connection with any employment
contract, benefit plan, or other similar arrangement with or for
the benefit of any one or more employees, officers, directors, or
consultants, or in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance
of common stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of an Extension
Period);
o as a result of an exchange or conversion of any class or series of
the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any other class or series of
the Corporation's capital stock or of any class or series of the
Corporation's indebtedness for any class or series of the
Corporation's capital stock;
o the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted
or exchanged;
o any declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock, or other property
under any stockholders' rights plan, or the redemption or
repurchase of rights pursuant to such plan; or
o any dividend in the form of stock, warrants, options, or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options, or other rights is the same
stock as that on which the dividend is being paid (or ranks pari
passu with or junior to such stock).
SUBORDINATION
The Subordinated Debentures will be subordinated and junior in right of
payment to all Senior Indebtedness and will be pari passu with all other series
of Subordinated Debentures issued under the Indenture and the $200 million of
obligations of the Corporation associated with the Outstanding Capital
Securities. Upon any payment or distribution of assets of the Corporation 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 Corporation, the holders of Senior Indebtedness
will first be entitled to receive payment in full of the principal of (and
premium, if any) and interest, if any, on such Senior Indebtedness before the
holders of Subordinated Debentures or the holders of the obligations of the
Corporation associated with the Outstanding Capital Securities will be entitled
to receive or retain any payment in respect of the principal of (and premium, if
any) or interest, if any, on the Subordinated Debentures or the obligations of
the Corporation associated with the Outstanding Capital Securities; provided,
however, that holders of Senior Indebtedness shall not be entitled to receive
payment of any such amounts to the extent that such holders would be required by
the subordination provisions of such Senior Indebtedness to pay such amounts
over to the obligees on trade accounts payable or other liabilities arising in
the ordinary course of the Corporation's business.
In the event of the acceleration of the maturity of any Subordinated
Debentures, the holders of all Senior Indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of all
amounts then due on such Senior Indebtedness (including any amounts due upon
acceleration of such Senior Indebtedness) before the holders of Subordinated
Debentures or the holders of the obligations of the Corporation associated with
the Outstanding Capital Securities will be entitled to receive or retain any
payment in respect of the principal of (and premium, if any) or interest, if
any, on the Subordinated Debentures or the obligations of the Corporation
associated with the Outstanding Capital Securities; provided, however, that
holders of Senior Indebtedness shall not be entitled to receive payment of any
such amounts to the extent that such holders would be required by the
subordination provisions of such Senior Indebtedness to pay such amounts over to
the obligees on trade accounts payable or other liabilities arising in the
ordinary course of the Corporation's business.
No payments of principal (or premium, if any) 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 Indebtedness,
or an event of default with respect to any Senior Indebtedness resulting in the
acceleration of the maturity of such Senior Indebtedness, or if any judicial
proceeding shall be pending with respect to any such default.
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"Senior Indebtedness" means, whether recourse is to all or a portion of
the assets of the Corporation and whether or not contingent:
o every obligation of the Corporation for money borrowed;
o every obligation of the Corporation evidenced by bonds,
debentures, notes, or other similar instruments, including
obligations incurred in connection with the acquisition of
property, assets, or businesses;
o every reimbursement obligation of the Corporation with respect to
letters of credit, bankers' acceptances, or similar facilities
issued for the account of the Corporation;
o every obligation of the Corporation 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);
o every capital lease obligation of the Corporation;
o every obligation of the Corporation for claims (as defined in
Section 101(4) of the United States Bankruptcy Code of 1978, as
amended) in respect of derivative products such as interest and
foreign exchange rate contracts, commodity contracts, and similar
arrangements; and
o every obligation of the type referred to above of another person
and all dividends of another person the payment of which, in
either case, the Corporation has guaranteed or is responsible or
liable for, directly or indirectly, as obligor or otherwise.
Notwithstanding the above, "Senior Indebtedness" shall not include:
o any obligations which, by their terms, are expressly stated to
rank pari passu in right of payment with, or to not be superior in
right of payment to, the Subordinated Debentures, including the
obligations associated with the Outstanding Capital Securities;
o any indebtedness of the Corporation which when incurred was
without recourse to the Corporation;
o any indebtedness of the Corporation to any of its subsidiaries;
o any indebtedness to an employee of the Corporation; or
o any indebtedness in respect of debt securities issued to any
trust, or a trustee of such trust, partnership, or other entity
affiliated with the Corporation that is a financing entity of the
Corporation in connection with the issuance by such financing
entity of securities that are similar to the Capital Securities.
The Indenture places no limitation on the amount of additional Senior
Indebtedness that may be incurred by the Corporation or any indebtedness or
other liabilities that may be incurred by the Corporation's subsidiaries. The
Corporation expects from time to time to incur additional indebtedness and other
obligations constituting Senior Indebtedness. Because the Corporation is a
holding company, the right of the Corporation to participate in any distribution
of assets of any subsidiary, including The Huntington National Bank, upon such
subsidiary's liquidation, reorganization, or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent the Corporation may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of
Subordinated Debentures should look only to the assets of the Corporation for
payments on the Subordinated Debentures.
The Indenture provides that the foregoing subordination provisions,
insofar as they relate to any particular issue of Subordinated Debentures, may
be changed prior to such issuance. Any such change would be described in the
applicable Prospectus Supplement.
INDENTURE EVENTS OF DEFAULT
The Indenture provides that any one or more of the following described
events with respect to a series of Subordinated Debentures that has occurred and
is continuing constitutes an "Indenture Event of Default" with respect to such
series of Subordinated Debentures:
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o failure for 30 days to pay any interest on such series of
Subordinated Debentures when due (subject to the deferral of any
due date in the case of an Extension Period);
o failure to pay any principal (or premium, if any) on such series
of Subordinated Debentures when due whether at maturity, upon
redemption, or otherwise;
o failure to observe or perform in any material respect any other
covenant contained in the Indenture for 90 days after written
notice to the Corporation from the Indenture Trustee or the
holders of at least 25% in aggregate outstanding principal amount
of such affected series of outstanding Subordinated Debentures; or
o certain events in bankruptcy, insolvency, or reorganization of the
Corporation.
The holders of a majority in aggregate outstanding principal amount of
Subordinated Debentures of each series affected have the right to direct the
time, method, and place of conducting any proceeding for any remedy available to
the Indenture Trustee. The Indenture Trustee or the holders of not less than 25%
in aggregate outstanding principal amount of Subordinated Debentures of each
series affected may declare the principal due and payable immediately upon an
Indenture Event of Default, and, in the case of Corresponding Subordinated
Debentures, should the Indenture Trustee or such holders of such Corresponding
Subordinated Debentures fail to make such declaration, the holders of at least
25% in aggregate liquidation amount of the Related Capital Securities shall have
such right.
The holders of a majority in aggregate outstanding principal amount of
Subordinated Debentures of each series affected may annul such declaration and
waive the default if the default (other than the non-payment of the principal of
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
Indenture Trustee. In the case of Corresponding Subordinated Debentures, should
the holders of such Corresponding Subordinated Debentures fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation amount of the Related Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of
each series of Subordinated Debentures affected thereby may, on behalf of the
holders of all the Subordinated Debentures of such series, waive any past
default, except a default in the payment of principal or interest (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal due otherwise than by acceleration has been deposited
with the Indenture Trustee) or a default in respect of a covenant or provision
which under the Indenture cannot be modified or amended without the consent of
the holder of each outstanding Subordinated Debenture of such series. In the
case of Corresponding Subordinated Debentures, should the holders of such
Corresponding Subordinated Debentures fail to waive such default, the holders of
a majority in aggregate liquidation amount of the Related Capital Securities
shall have such right. The Corporation is required to file annually with the
Indenture Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Indenture.
In case an Indenture Event of Default shall occur and be continuing as to
a series of Corresponding Subordinated Debentures, the Property Trustee will
have the right to declare the principal of and the interest on such
Corresponding Subordinated Debentures and any other amounts payable under the
Indenture to be immediately due and payable and to enforce its other rights as a
creditor with respect to such Subordinated Debentures.
ENFORCEMENT OF CERTAIN RIGHTS BY HOLDERS OF CAPITAL SECURITIES
If an Indenture Event of Default with respect to a series of
Corresponding Subordinated Debentures has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on such Corresponding Subordinated Debentures on the date such
interest or principal is otherwise payable, a holder of Related Capital
Securities may institute a legal proceeding directly against the Corporation for
enforcement of payment to such holder of the principal of or interest on such
Corresponding Subordinated Debentures having a principal amount equal to the
aggregate liquidation amount of the Related Capital Securities of such holder (a
"Direct Action"). The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior
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written consent of the holders of all of the Capital Securities outstanding. The
Corporation shall have the right under the Indenture to set-off any payment made
to such holder of Capital Securities by the Corporation in connection with a
Direct Action.
Except as otherwise described in the Prospectus Supplement, the holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Subordinated Debentures, unless there shall have
been an event of default under the Declaration. See "Description of the Capital
Securities -- Trust Enforcement Events."
CONSOLIDATION, MERGER, SALE OF ASSETS, AND OTHER TRANSACTIONS
The Indenture provides that the Corporation 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, unless:
o in case the Corporation consolidates with or merges into another
Person or conveys, transfers, or leases 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 Corporation's obligations on the Subordinated
Debentures issued under the Indenture;
o immediately after giving effect to such transaction, no Indenture
Event of Default, and no event which, after notice or lapse of
time or both, would become an Indenture Event of Default, shall
have happened and be continuing;
o if at the time any Capital Securities are outstanding, such
transaction is permitted under the related Declaration and related
Guarantee and does not give rise to any breach or violation of
such Declaration or Guarantee;
o any such lease provides that it will remain in effect so long as
any Subordinated Debentures are outstanding; and
o certain other conditions 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 Corporation that may adversely affect holders of the
Subordinated Debentures.
MODIFICATION OF INDENTURE
From time to time the Corporation and the Indenture Trustee may, without
the consent of the holders of any series of Subordinated Debentures, amend,
waive, or supplement the Indenture for specified purposes, including, among
other things, curing ambiguities, defects, or inconsistencies (provided that any
such action does not materially adversely affect the interest of the holders of
any series of Subordinated Debentures), and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the
Indenture Trustee, with the consent of the holders of not less than a majority
in principal amount of each outstanding series of Subordinated Debentures
affected, to modify the Indenture in a manner affecting the rights of the
holders of such series of Subordinated Debentures in any material respect.
However, no such modification may, without the consent of the holder of each
outstanding Subordinated Debentures so affected, (a) change the Stated Maturity
of any series of Subordinated Debentures, or reduce the principal amount of any
series of Subordinated Debentures, or reduce the rate or extend the time of
payment of interest on such series of Subordinated Debentures (except as is
otherwise contemplated by the Prospectus Supplement), or (b) reduce the
percentage of principal amount of Subordinated Debentures of any series, the
holders of which are required to consent to any such modification of the
Indenture.
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In addition, in the case of Corresponding Subordinated Debentures, so
long as any of the Related Capital Securities remain outstanding, no such
modification may be made that adversely affects the holders of such Capital
Securities in any material respect, and no termination of the Indenture may
occur, and no waiver of any Indenture 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 all
outstanding Related Capital Securities affected unless and until the principal
of the Corresponding Subordinated Debentures and all accrued and unpaid interest
have been paid in full and certain other conditions are satisfied.
The Corporation and the Indenture Trustee may execute, without the
consent of any holder of Subordinated Debentures, any supplemental Indenture for
the purpose of creating any new series of Subordinated Debentures.
DEFEASANCE AND DISCHARGE
The Indenture provides that the Corporation, at the Corporation's option:
(a) will be discharged from any and all obligations in respect of the
Subordinated Debentures (except for certain obligations to register the transfer
or exchange of Subordinated Debentures, replace stolen, lost, or mutilated
Subordinated Debentures, maintain paying agencies, and hold moneys for payment
in trust) or (b) need not comply with certain restrictive covenants of the
Indenture (including that described in the second paragraph under "Certain
Covenants of the Corporation"), in each case if the Corporation deposits, in
trust with the Indenture Trustee, money or U.S. Government Obligations which
through the payment of interest and principal in accordance with their terms
will provide money, in an amount sufficient to pay all the principal of (and
premium, if any) and interest on the Subordinated Debentures on the dates such
payments are due in accordance with the terms of such Subordinated Debentures.
To exercise any such option, the Corporation is required to deliver to
the Indenture Trustee an opinion of counsel to the effect that the deposit and
related defeasance would not cause the holders of the Subordinated Debentures to
recognize income, gain, or loss for United States federal income tax purposes
and, in the case of a discharge pursuant to clause (a), such opinion shall be
accompanied by a private letter ruling to that effect received by the
Corporation from the United States Internal Revenue Service or revenue ruling
pertaining to a comparable form of transaction to such effect published by the
United States Internal Revenue Service.
DISTRIBUTIONS OF SUBORDINATED DEBENTURES; BOOK-ENTRY ISSUANCE
Under certain circumstances involving the dissolution of a Trust,
Corresponding Subordinated Debentures may be distributed to the holders of the
Related Capital Securities in liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust as provided by applicable law. If
distributed to holders of Related Capital Securities in liquidation, the
Corresponding Subordinated Debentures will initially be issued in the form of
global securities and certificated securities. The Depository, or any successor
depositary, will act as depositary for such global securities. It is anticipated
that the depositary arrangements for and certain restrictions with respect to
such global securities would be substantially identical to those in effect for
the Related Capital Securities. For a description of global securities and
certificated securities, see "Book-Entry Issuance."
There can be no assurance as to the market price of any Corresponding
Subordinated Debentures that may be distributed to the holders of the Related
Capital Securities.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Corporation initially will act as Paying Agent with respect to the Subordinated
Debentures of a series except that, if the Corresponding Subordinated Debentures
are distributed to the holders of the Related Capital Securities in liquidation
of such holders' interests in the
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Trust, the Indenture Trustee will act as the Paying Agent. The Corporation at
any time may designate additional Paying Agents or rescind the designation of
any Paying Agent or approve a change in the office through which any Paying
Agent acts, except that the Corporation will be required to maintain a Paying
Agent at the Place of Payment.
Any moneys deposited with the Indenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of (and
premium, if any) or interest on any Subordinated Debentures and remaining
unclaimed for one year after such principal (and premium, if any) or interest
has become due and payable shall, at the request of the Corporation, be repaid
to the Corporation and the holder of such Subordinated Debentures shall
thereafter look, as a general unsecured creditor, only to the Corporation for
payment.
GOVERNING LAW
The Indenture and the Subordinated Debentures will be governed by and
construed in accordance with the laws of the State of New York.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The Indenture 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 Indenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Subordinated Debentures of any series, unless offered
reasonable indemnity by such holder against the costs, expenses, and liabilities
which might be incurred in connection with the Trustee's exercise of such
powers. The Indenture 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 Indenture Trustee reasonably believes that repayment or adequate indemnity
is not reasonably assured to it.
CORRESPONDING SUBORDINATED DEBENTURES
The Corresponding Subordinated Debentures may be issued in one or more
series of Subordinated Debentures under the Indenture with terms corresponding
to the terms of a series of Related Capital Securities. In that event,
concurrently with the issuance of each Trust's Capital Securities, such Trust
will invest the proceeds of the Capital Securities and the consideration paid by
the Corporation for the Common Securities of such Trust in such series of
Corresponding Subordinated Debentures issued by the Corporation to such Trust.
Each series of Corresponding Subordinated Debentures will be in the principal
amount equal to the aggregate stated liquidation amount of the Related Capital
Securities and the Common Securities of such Trust and will rank pari passu with
all other series of Subordinated Debentures and with the Outstanding Capital
Securities. Holders of the Related Capital Securities for a series of
Corresponding Subordinated Debentures will have the rights in connection with
modifications to the Indenture or upon occurrence of Indenture Events of
Default, as described under "-- Modification of Indenture" and "-- Indenture
Events of Default," unless provided otherwise in the Prospectus Supplement for
such Related Capital Securities.
Unless otherwise specified in the applicable Prospectus Supplement, if a
Special Event in respect of a Trust shall occur and be continuing, the
Corporation may, at its option and subject to prior approval of the Federal
Reserve if then so required under applicable capital guidelines or policies,
redeem the Corresponding Subordinated Debentures at any time within 90 days of
the occurrence of such Special Event, in whole but not in part, subject to the
provisions of the Indenture and whether or not such Corresponding Subordinated
Debentures are then otherwise redeemable at the option of the Corporation. The
redemption price for any Corresponding Subordinated Debentures shall be equal to
100% of the principal amount of such Corresponding Subordinated Debentures then
outstanding plus accrued and unpaid interest to the date fixed for redemption.
For so long as the applicable Trust is the holder of all the outstanding
Corresponding Subordinated Debentures of such Trust, the proceeds of any such
redemption will be used by the Trust to redeem the corresponding Trust
Securities in accordance with their terms. The Corporation may not redeem a
series of
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Corresponding Subordinated Debentures in part unless all accrued and unpaid
interest has been paid in full on all outstanding Corresponding Subordinated
Debentures of such series for all interest periods terminating on or prior to
the redemption date.
The Corporation will covenant, as to each series of Corresponding
Subordinated Debentures, that if and so long as (a) the Trust of the related
series of Trust Securities is the holder of all such Corresponding Subordinated
Debentures, (b) a Tax Event in respect of such Trust has occurred and is
continuing and (c) the Corporation has elected, and has not revoked such
election, to pay Additional Sums (as defined under "Description of the Capital
Securities -- Redemption or Exchange") in respect of such Trust Securities, the
Corporation will pay to such Trust such Additional Sums.
The Corporation also will covenant, as to each series of Corresponding
Subordinated Debentures, to maintain directly or indirectly 100% ownership of
the Common Securities of the Trust to which such Corresponding Subordinated
Debentures have been issued, provided that certain successors which are
permitted pursuant to the Indenture may succeed to the Corporation's ownership
of the Common Securities, (b) not to voluntarily dissolve, wind-up, or liquidate
any Trust, except:
o in connection with a distribution of Corresponding Subordinated
Debentures to the holders of the Related Capital Securities in
exchange for such Related Capital Securities upon liquidation of
such Trust,
o in connection with certain mergers, consolidations, or
amalgamations permitted by the related Declaration, in either such
case, if so specified in the applicable Prospectus Supplement,
upon prior approval of the Federal Reserve if then so required
under applicable Federal Reserve capital guidelines or policies,
and
o to use its reasonable efforts, consistent with the terms and
provisions of the related Declaration, to cause such Trust to be
classified as a grantor trust and not as an association taxable as
a corporation for United States Federal income tax purposes.
DESCRIPTION OF THE CAPITAL SECURITIES
This summary of certain provisions of the Capital Securities and each
Declaration does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, the Trust Indenture Act and all the provisions
of such Declaration, including the definitions in the Declaration of certain
terms. Wherever particular defined terms of a Declaration (as supplemented or
amended from time to time) are referred to in this Prospectus or a Prospectus
Supplement, the definitions of such defined terms are incorporated in this
Prospectus or such Prospectus Supplement by reference. The form of Declaration
has been filed as an exhibit to the Registration Statement.
GENERAL
Pursuant to the terms of the Declaration for each Trust, the Trust will
issue the Capital Securities and the Common Securities. The Capital Securities
of a particular Trust will represent undivided preferred beneficial ownership
interests in the assets of that Trust and the holders of such Capital Securities
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 such Trust, as well as other benefits as described in the
corresponding Declaration. Each of the Trusts is a legally separate entity and
the assets of one are not available to satisfy the obligation of the other.
The Capital Securities of a Trust will rank pari passu, and payments will
be made pro rata, with the Common Securities of that Trust except as described
under "-- Subordination of Common Securities." Legal title to the Corresponding
Subordinated Debentures will be held by the Property Trustee in trust for the
benefit of the holders of the Related Capital Securities and the Common
Securities. Each Guarantee executed by the Corporation for the benefit of the
holders of a Trust's Trust Securities will be a guarantee on a subordinated
basis with respect to such Capital
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Securities but will not guarantee payment of Distributions or amounts payable on
redemption or liquidation of such Trust Securities when the related Trust does
not have sufficient funds available to make such payments. See "Description of
the Guarantees." The Corporation's obligations under the related Guarantee,
taken together with its obligations under the Corresponding Subordinated
Debentures and the Indenture, including its obligation to pay all costs,
expenses, and liabilities of the related Trust (other than with respect to the
Related Capital Securities), constitute a full and unconditional guarantee of
all of the Trust's obligations under the Trust Securities.
The denomination of the Capital Securities of a Trust is the liquidation
amount as specified in the applicable Prospectus Supplement. Holders of the
Capital Securities have no preemptive or similar rights.
DISTRIBUTIONS
Distributions on the Capital Securities will be cumulative, will
accumulate from the date of original issuance and will be payable on such dates
as specified in the applicable Prospectus Supplement. In the event that any date
on which Distributions are payable on the Capital Securities is not a Business
Day (as defined below), payment of the Distribution payable on such date will be
made on the next succeeding day that is a Business Day (and without any
additional Distributions or other payment in respect to any such delay) except
that, if such Business Day is in the next succeeding calendar year, payment of
such Distribution shall be made on the immediately preceding Business Day, in
either case with the same force and effect as if made on the date such payment
was originally payable (each date on which Distributions are payable in
accordance with the foregoing, a "Distribution Date"). 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 or the City of Columbus 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 is closed for business.
Each Trust's Capital Securities represent preferred beneficial interests
in the applicable Trust, and the Distributions on each Capital Security will be
payable at a rate specified in the applicable Prospectus Supplement for such
Capital Securities. The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months unless otherwise
specified in the applicable Prospectus Supplement. Distributions to which
holders of Capital Securities are entitled will accumulate additional
Distributions at the rate per annum if and as specified in the applicable
Prospectus Supplement. The term "Distributions" as used in this Prospectus
includes any such additional Distributions unless otherwise stated.
If provided in the applicable Prospectus Supplement, the Corporation has
the right under the Indenture, pursuant to which it will issue the Corresponding
Subordinated Debentures, to defer the payment of interest at any time or from
time to time on any series of the Corresponding Subordinated Debentures for up
to such number of consecutive interest payment periods which will be specified
in such Prospectus Supplement relating to such series, provided that no
Extension Period may extend beyond the Stated Maturity of the Corresponding
Subordinated Debentures. As a consequence of any such deferral, Distributions on
the Related Capital Securities would be deferred (but would continue to
accumulate additional Distributions thereon at the rate per annum set forth in
the Prospectus Supplement for such Capital Securities) by the Trust of such
Capital Securities during any such Extension Period.
During any such Extension Period, the Corporation may not, and may not
permit any subsidiary of the Corporation to:
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
the Corporation's capital stock, or
o make any payment of principal, interest, or premium, if any, on or
repay, repurchase, or redeem any debt securities that rank pari
passu with or junior to the Corresponding Subordinated Debentures,
or
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks pari passu with or junior to
the Corresponding Subordinated Debentures.
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The following are permitted exceptions to this covenant:
o repurchases, redemptions, or other acquisitions of shares of
capital stock of the Corporation in connection with any employment
contract, benefit plan, or other similar arrangement with or for
the benefit of any one or more employees, officers, directors, or
consultants, or in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance
of common stock (or securities convertible into or exchangeable
for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of such Extension
Period);
o as a result of an exchange or conversion of any class or series of
the Corporation's capital stock (or any capital stock of a
subsidiary of the Corporation) for any other class or series of
the Corporation's capital stock or of any class or series of the
Corporation's indebtedness for any class or series of the
Corporation's capital stock;
o the purchase of fractional interests in shares of the
Corporation's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted
or exchanged;
o any declaration of a dividend in connection with any stockholders'
rights plan, or the issuance of rights, stock, or other property
under any stockholders' rights plan, or the redemption or
repurchase of rights pursuant to such plan;
o any dividend in the form of stock, warrants, options, or other
rights where the dividend stock or the stock issuable upon
exercise of such warrants, options, or other rights is the same
stock as that on which the dividend is being paid (or ranks pari
passu with or junior to such stock).
Prior to the termination of any such Extension Period, the Corporation
may further extend the Extension Period, provided that no Extension Period may
extend beyond the Stated Maturity of the Corresponding Subordinated Debentures
or exceed the number of consecutive interest payment periods specified in the
Prospectus Supplement relating to such series. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period subject to the
foregoing requirements. See "Description of the Subordinated Debentures --
Option to Defer Interest Payments."
The revenue of each Trust available for distribution to holders of its
Capital Securities will be limited to payments under the Corresponding
Subordinated Debentures in which the Trust will invest the proceeds from the
issuance and sale of its Trust Securities. See "Description of the Subordinated
Debentures -- Corresponding Subordinated Debentures." If the Corporation does
not make interest payments on such Corresponding Subordinated Debentures, the
Property Trustee will not have funds available to pay Distributions on the
Related Capital Securities. The payment of Distributions (if and to the extent
the Trust has funds legally available for the payment of such Distributions and
cash sufficient to make such payments) is guaranteed by the Corporation on a
limited basis as described in this Prospectus under "Description of the
Guarantees."
Distributions on the Capital Securities will be payable to the holders of
such Capital Securities as they appear on the register of such Trust on the
relevant record dates, which, as long as the Capital Securities remain in
book-entry form, will be one Business Day prior to the relevant Distribution
Date. Subject to any applicable laws and regulations and the provisions of the
applicable Declaration, each such payment will be made as described under
"Book-Entry Issuance." In the event any Capital Securities are not in book-entry
form, the relevant record date for such Capital Securities shall be the date at
least 15 days prior to the relevant Distribution Date, as specified in the
applicable Prospectus Supplement.
REDEMPTION
Mandatory Redemption. Upon the repayment or redemption, in whole or in
part, of any Corresponding Subordinated Debentures, whether at 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 (defined below)
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of Trust Securities upon not less than 30 nor more than 60 days' notice prior to
the date fixed for repayment or redemption at a redemption price (the
"Redemption Price") equal to the aggregate liquidation amount of such Trust
Securities plus accumulated but unpaid Distributions to the date of redemption
(the "Redemption Date") and the related amount of the premium, if any, paid by
the Corporation upon the concurrent redemption of such Corresponding
Subordinated Debentures. See "Description of the Subordinated Debentures --
Redemption."
If less than all of any series of Corresponding 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 pro rata of the
Trust Securities. The amount of premium, if any, paid by the Corporation upon
the redemption of all or any part of any series of any Corresponding
Subordinated Debentures to be repaid or redeemed on a Redemption Date shall be
allocated to the redemption pro rata of the Related Capital Securities and the
Common Securities.
The Corporation will have the right to redeem any series of Corresponding
Subordinated Debentures (a) on or after such date as may be specified in the
applicable Prospectus Supplement, in whole at any time or in part from time to
time, (b) at any time, in whole (but not in part), upon the occurrence of a
Special Event, or (c) as may be otherwise specified in the applicable Prospectus
Supplement, in each case subject to receipt of prior approval by the Federal
Reserve, if then so required under applicable Federal Reserve capital guidelines
or policies.
Distribution of Corresponding Subordinated Debentures. Subject to the
Corporation having received prior approval of the Federal Reserve to do so if
such approval is then required under applicable capital guidelines or policies
of the Federal Reserve, the Corporation has the right at any time to dissolve
any Trust and, after satisfaction of the claims of creditors of the Trust as
provided by applicable law, cause such Corresponding Subordinated Debentures in
respect of the Capital Securities and Common Securities issued by such Trust to
be distributed to the holders of such Related Capital Securities and Common
Securities in exchange for such securities in liquidation of the Trust.
Special Event Redemption. If a Special Event in respect of a series of
Trust Securities shall occur and be continuing, the Corporation will have the
right, subject to the receipt of any necessary prior approval of the Federal
Reserve, to redeem within 90 days following the occurrence of such Special Event
the Corresponding Subordinated Debentures on the Redemption Date in whole (but
not in part) and thereby cause a mandatory redemption of such Trust Securities
in whole (but not in part) at a redemption price with respect to such Trust
Securities equal to the redemption price in respect of the Subordinated
Debentures. In the event a Special Event in respect of a series of Trust
Securities has occurred and is continuing and the Corporation does not elect to
redeem the Corresponding Subordinated Debentures and thereby cause a mandatory
redemption of such Capital Securities or to liquidate the related Trust and
cause the Corresponding Subordinated Debentures to be distributed to holders of
such Trust Securities in exchange upon liquidation of the Trust as described
above, such Capital Securities will remain outstanding and Additional Sums (as
defined below) may be payable on the Corresponding Subordinated Debentures.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by a Trust on the
outstanding Trust Securities of such Trust shall not be reduced as a result of
any additional taxes, duties, and other governmental charges to which such Trust
has become subject as a result of a Tax Event.
"Like Amount" means (a) with respect to a redemption of any series of
Trust Securities, Trust Securities of such series having a liquidation amount
equal to the principal amount of Corresponding Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, the proceeds of
which will be used to pay the Redemption Price of such Trust Securities, and (b)
with respect to a distribution of Corresponding Subordinated Debentures to
holders of any series of Trust Securities in connection with a dissolution or
liquidation of the related Trust, Corresponding Subordinated Debentures having a
principal amount equal to the liquidation amount of the Trust Securities in
respect of which such distribution is made.
Under current United States federal income tax law and interpretations of
such law and assuming, as expected, the Trust is treated as a grantor trust and
not an association taxable as a corporation, a distribution of the Subordinated
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Debentures should not be a taxable event to holders of the Capital Securities.
However, should there be a change in law, a change in legal interpretation,
certain Tax Events, or other circumstances, the distribution could be a taxable
event to holders of the Capital Securities. The applicable Prospectus Supplement
will provide a description of the United States federal income tax consequences
of a distribution of the Subordinated Debentures.
REDEMPTION PROCEDURES
Capital Securities redeemed on each Redemption Date shall be redeemed at
the Redemption Price with the applicable proceeds from the contemporaneous
redemption or payment at Stated Maturity of the Corresponding Subordinated
Debentures. Redemptions of the Capital Securities shall be made and the
Redemption Price shall be payable on each Redemption Date only to the extent
that the related Trust has sufficient funds available for the payment of such
Redemption Price. See also "-- Subordination of Common Securities."
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. If a Trust gives a notice of redemption in
respect of its Capital Securities, then, by 12:00 noon, New York City time, on
the Redemption Date, to the extent funds are available, the Property Trustee
will deposit irrevocably with the Depository or its nominee funds sufficient to
pay the applicable Redemption Price and will give the Depository irrevocable
instructions and authority to pay the Redemption Price to the holders of such
Capital Securities. See "Book-Entry Issuance." If any such Capital Securities
are held in certificated form, the Property Trustee, to the extent funds are
available, will irrevocably deposit with the paying agent for such Capital
Securities 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 of such Capital Securities upon surrender of their
certificates evidencing the Capital Securities.
Notwithstanding the foregoing, Distributions payable on or prior to the
Redemption Date for any Capital Security called for redemption shall be payable
to the holders of such Capital Security 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
the holders of such Capital Securities so called for redemption will cease,
except the right of the holders of such Capital Securities to receive the
Redemption Price, but without interest on such Redemption Price, and such
Capital Securities will cease to be outstanding.
In the event that any date fixed for redemption of Capital 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
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date such payment was originally payable. In the event that
payment of the Redemption Price in respect of Capital Securities called for
redemption is improperly withheld or refused and not paid either by the Trust or
by the Corporation pursuant to the Guarantee as described under "Description of
the Guarantees," Distributions on such Capital Securities will continue to
accrue at the then applicable rate, from the Redemption Date originally
established by the Trust for the Capital 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.
Subject to applicable law (including, without limitation, United States
federal securities law) and to the provisions of the applicable Declaration, the
Corporation or its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market, or by private
agreement.
Payment of the Redemption Price on the Capital Securities and any
distribution of Corresponding Subordinated Debentures to holders of Capital
Securities shall be made to the applicable recordholders of such securities as
they appear on the register for such Capital Securities on the relevant record
date, which shall be one Business Day prior to the relevant Redemption Date or
liquidation date, as applicable; provided, however, that in the event that any
Capital
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Securities are not in book-entry form, the relevant record date for such Capital
Securities shall be a date at least 15 days prior to the Redemption Date or
liquidation date, as applicable, as specified in the applicable Prospectus
Supplement.
A Trust may not redeem fewer than all of the outstanding Trust Securities
unless all accrued and unpaid Distributions have been paid on all Trust
Securities for all distribution periods ending on or prior to the date of
redemption. If less than all of the Capital Securities and Common Securities
issued by a Trust are to be redeemed on a Redemption Date, then the aggregate
amount of such Capital Securities and Common Securities to be redeemed shall be
allocated pro rata among the Capital Securities and the Common Securities.
If the Capital Securities are in book-entry form, they will be redeemed
as described below under "Book-Entry Issuance." If not, the particular Capital
Securities to be redeemed shall be selected on a pro rata basis not more than 60
days prior to the Redemption Date by the Property Trustee from the outstanding
Capital 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 of the liquidation amount of Capital
Securities in such denomination as will be specified in the applicable
Prospectus Supplement. The Property Trustee shall promptly notify the Trust
registrar in writing of the Capital Securities selected for redemption and, in
the case of any Capital Securities selected for partial redemption, the
liquidation amount of such Capital Securities to be redeemed. For all purposes
of each Declaration, unless the context otherwise requires, all provisions
relating to the redemption of Capital Securities shall relate, in the case of
any Capital Security redeemed or to be redeemed only in part, to the portion of
the aggregate liquidation amount of Capital Securities which has been or is to
be redeemed.
SUBORDINATION OF COMMON SECURITIES
Payment of Distributions on, and the Redemption Price of, each Trust's
Capital Securities and Common Securities, as applicable, shall be made pro rata
based on the liquidation amount of such Trust Securities; provided, however,
that if on any Distribution Date or Redemption Date an Indenture Event of
Default shall have occurred and be continuing, no payment of any Distribution
on, or Redemption Price of, any of the Common Securities of such Trust, 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 Trust's outstanding Capital
Securities for all Distribution periods on or prior to such payment, or in the
case of payment of the Redemption Price, the full amount of such Redemption
Price on all of the Trust's outstanding Capital Securities then called for
redemption, shall have been made or provided for, and all funds available to the
Property Trustee shall first be applied to the payment in full in cash of all
Distributions on, or Redemption Price of, such Capital Securities then due and
payable.
LIQUIDATION DISTRIBUTION UPON DISSOLUTION
Pursuant to each Declaration, each Trust shall automatically dissolve
upon expiration of its term and shall dissolve on the first to occur of:
o any liquidation, insolvency, or similar proceeding with respect to
the Corporation or all or substantially all of its property;
o the distribution of a Like Amount of the Corresponding
Subordinated Debentures to the holders of the Trust's Capital
Securities and Common Securities (subject to the Corporation
having received prior approval of the Federal Reserve to do so if
such approval is then required under applicable capital guidelines
or policies of the Federal Reserve);
o the redemption of all of the Trust's Capital Securities in
connection with the maturity or redemption of all of the
Subordinated Debentures; and
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o the entry by a court of competent jurisdiction of an order for the
dissolution of the Trust. Notice of such dissolution shall be
given to the holders of the Common Securities and Capital
Securities by the Declaration Trustees within 30 days of such
event.
If an early dissolution occurs for any reason other than the maturity or
redemption of all of the Subordinated Debentures, the Trust shall be liquidated
by the Declaration Trustees as expeditiously as the Declaration Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the holders of such
Capital Securities and Common Securities a Like Amount of the Corresponding
Subordinated Debentures, unless such distribution is determined by the Property
Trustee not to be practicable, in which event such holders will be entitled to
receive out of the assets of the Trust available for distribution to holders,
after satisfaction of liabilities to creditors of such Trust as provided by
applicable law, an amount equal to, in the case of holders of Capital
Securities, the aggregate of the liquidation amount plus accrued and unpaid
Distributions to the date of payment (such amount being the "Liquidation
Distribution"). If such Liquidation Distribution can be paid only in part
because such Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by such
Trust on its Capital Securities shall be paid on a pro rata basis. The holder(s)
of such Trust's Common Securities will be entitled to receive distributions upon
any such liquidation pro rata with the holders of its Capital Securities, except
that if an Indenture Event of Default has occurred and is continuing, the
Capital Securities shall have a priority over the Common Securities.
After the liquidation date is fixed for any distribution of Corresponding
Subordinated Debentures for any series of Capital Securities:
o such Capital Securities will no longer be deemed to be
outstanding,
o the Depository for such series or its nominee, as a record holder
of such Capital Securities, will receive a registered global
certificate or certificates representing the Corresponding
Subordinated Debentures to be delivered upon such distribution,
and
o any certificates representing such series of Capital Securities
held in certificated form will be deemed to represent the
Corresponding Subordinated Debentures having a principal amount
equal to the liquidation amount of such series of Capital
Securities, bearing accrued and unpaid interest in an amount equal
to the accrued and unpaid Distributions on such series of Capital
Securities until such certificates are presented for cancellation.
At that time, the Corporation will issue to such holder, and the
Indenture Trustee will authenticate, a certificate representing
such Subordinated Debentures.
There can be no assurance as to the market prices for the Capital
Securities of a series or the Corresponding Subordinated Debentures that may be
distributed in exchange for such Capital Securities if a dissolution and
liquidation of a Trust were to occur. Accordingly, the Capital Securities that
an investor may purchase, or the Corresponding Subordinated Debentures that the
investor may receive on dissolution and liquidation of a Trust, may trade at a
discount to the price that the investor paid to purchase the Capital Securities
offered by this Prospectus.
TRUST ENFORCEMENT EVENTS
An Indenture Event of Default constitutes a Trust Enforcement Event under
each Declaration with respect to the series of Trust Securities issued under
such Declaration, provided that pursuant to such Declaration, the Corporation,
as holder of the Common Securities of such Trust, will be deemed to have waived
any Trust Enforcement Event with respect to such Common Securities and will be
deemed to have waived any right to act with respect to such Trust Enforcement
Event until all Trust Enforcement Events with respect to the Capital Securities
issued under such Trust have been cured, waived, or otherwise eliminated. Until
such Trust Enforcement Event with respect to such Capital Securities has been so
cured, waived, or otherwise eliminated, the Property Trustee will be deemed to
be acting solely on behalf of the holders of such Capital Securities and only
the holders of such Capital Securities will have the right to direct the
Property Trustee with respect to certain matters under that Declaration, and
therefore the Indenture.
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Upon the occurrence of a Trust Enforcement Event, the Indenture Trustee
or the Property Trustee, as the holder of Subordinated Debentures, will have the
right under the Indenture to declare the principal of and interest on the
affected Subordinated Debentures to be immediately due and payable. The
Corporation and each Trust is required to file annually with the applicable
Property Trustee an officer's certificate as to its compliance with all
conditions and covenants under the Declaration.
If the Property Trustee fails to enforce its rights with respect to the
Corresponding Subordinated Debentures held by a Trust, any record holder of
Related Capital Securities may, to the fullest extent permitted by law,
institute legal proceedings directly against the Corporation to enforce the
Property Trustee's rights under such Corresponding Subordinated Debentures
without first instituting any legal proceedings against such Property Trustee or
any other person or entity. In addition, if a Trust Enforcement Event has
occurred and is continuing and such event is attributable to the failure of the
Corporation to pay interest, principal, or other required payments on the
Subordinated Debentures issued to the Trust on the date such interest,
principal, or other payment is otherwise payable, then a record holder of
Related Capital Securities may, on or after the respective due dates specified
in the Subordinated Debentures, institute a proceeding directly against the
Corporation under the Indenture for enforcement of payment on Subordinated
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities held by such holder. In connection with such Direct
Action, the Corporation will be subrogated to the rights of such record holder
of Capital Securities to the extent of any payment made by the Corporation to
such record holder of Capital Securities.
VOTING RIGHTS; AMENDMENT OF EACH DECLARATION
Except as provided below and under "Description of the Guarantees --
Amendments and Assignment" and as otherwise required by law and the applicable
Declaration, the holders of the Capital Securities will have no voting rights.
The Regular Trustees are required to call a meeting of the holders of the
Capital Securities if directed to do so by holders of at least 10% in aggregate
liquidation amount of the Capital Securities.
So long as any Corresponding Subordinated Debentures are held by the
Property Trustee, the Declaration Trustees shall not, without obtaining the
prior approval of the holders of a majority in aggregate liquidation amount of
the Related Capital Securities:
o direct the time, method, and place of conducting any proceeding
for any remedy available to the Indenture Trustee or executing any
trust or power conferred on the Property Trustee with respect to
such Corresponding Subordinated Debentures,
o waive any past default that is waivable under the Indenture,
o exercise any right to rescind or annul any declaration that the
principal of all such Corresponding Subordinated Debentures shall
be due and payable, or
o consent to any amendment, modification, or termination of the
Indenture or such Corresponding Subordinated Debentures, where
such consent shall be required,
provided, however, that where a consent under the Indenture would require the
consent of each holder of Corresponding Subordinated Debentures affected
thereby, no such consent shall be given by the Property Trustee without the
prior consent of each holder of Related Capital Securities.
The Trustees shall not revoke any action previously authorized or
approved by a vote of the holders of the Related Capital Securities except
pursuant to a subsequent vote of the holders of the Related Capital Securities.
The Property Trustee shall notify each holder of record of the Related Capital
Securities of any notice of default which it receives with respect to the
Corresponding Subordinated Debentures. In addition to obtaining the foregoing
approvals of the holders of the Related Capital Securities, prior to taking any
of the foregoing actions, the Declaration Trustees shall receive an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes on account of such action.
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Each Declaration may be amended from time to time by the holders of a
majority of the Common Securities and the Regular Trustees (and in certain
circumstances the Property Trustee and the Delaware Trustee), without the
consent of the holders of the Capital Securities:
o to cure any ambiguity, correct or supplement any provisions in
such Declaration that may be inconsistent with any other
provision, or to make any other provisions with respect to matters
or questions arising under such Declaration that shall not be
inconsistent with the other provisions of such Declaration, or
o to modify, eliminate, or add to any provisions of such Declaration
to such extent as shall be necessary to ensure that the Trust will
be classified as a grantor trust for United States federal income
tax purposes at all times that any Capital Securities and Common
Securities are outstanding or to ensure that the Trust will not be
required to register as an "investment company" under the
Investment Company Act, or
o to conform to any change in Rule 3a-7 under the Investment Company
Act or written change in interpretation or application of such
Rule 3a-7 by any legislative body, court, government agency, or
regulatory authority which amendment does not have a material
adverse effect on the rights, preferences, or privileges of the
holders;
provided, however, that in any such case, such action shall not adversely affect
in any material respect the interests of any holder of Trust Securities, and any
such amendment of such Declaration shall become effective when notice of such
amendment is given to the holders of the Trust Securities.
Each Declaration also may be amended by the holders of a majority in
aggregate liquidation amount of the Common Securities and the Regular Trustees
with:
o the consent of holders representing not less than a majority
(based upon liquidation amounts) of the outstanding Capital
Securities and
o receipt by the Regular Trustees of an opinion of counsel to the
effect that such amendment or the exercise of any power granted to
the Regular Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States
federal income tax purposes or the Trust's exemption from status
as an "investment company" under the Investment Company Act,
provided, that without the consent of each holder of Trust Securities affected
thereby, such Declaration may not be amended to:
o 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
o restrict the right of a holder of Trust Securities to institute
suit for the enforcement of any such payment on or after such
date.
Any required approval of holders of Capital Securities of a series may be
given at a meeting of holders of such Capital Securities convened for such
purpose or pursuant to written consent. The Regular Trustees will cause a notice
of any meeting at which holders of such Capital Securities are entitled to vote,
or of any matter upon which action by written consent of such holders is to be
taken, to be given to each holder of record of such Capital Securities in the
manner set forth in the applicable Declaration.
No vote or consent of the holders of Capital Securities will be required
for a Trust to redeem and cancel its Capital Securities in accordance with the
applicable Declaration.
Notwithstanding that holders of Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Corporation, the Declaration Trustees, or any
affiliate of the Corporation or any Declaration Trustees, shall, for purposes of
such vote or consent, be treated as if they were not outstanding.
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EXPENSES AND TAXES
In the Indenture, the Corporation, as borrower, has agreed to pay all
debts and other obligations (other than with respect to the Capital Securities)
and all costs and expenses of each Trust (including costs and expenses relating
to the organization of each Trust, the fees and expenses of all Declaration
Trustees, and the costs and expenses relating to the operation of each Trust)
and to pay any and all taxes and all costs and expenses with respect to each
Trust (other than United States withholding taxes) to which such Trusts might
become subject. The Corporation also has agreed in the Indenture to execute such
additional agreements as may be necessary or desirable to give full effect to
the foregoing.
NOTICES
All notices to holders of Capital Securities of any series shall be
validly given if in writing and mailed by first class mail to them at their
respective addresses in the register of holders of Capital Securities maintained
by the registrar of each Trust. Any such notice shall be deemed to have been
given on the later of the date of such publication and the date that is the
seventh day after the notice is so mailed.
REGISTRAR AND TRANSFER AGENT
Unless otherwise specified in the applicable Prospectus Supplement, The
Chase Manhattan Bank will act as the initial registrar and transfer agent for
all series of Capital Securities. The Corporation and each Trust shall at all
times maintain a transfer agent in the City of New York.
Registration of transfers of Capital Securities will be effected without
charge by or on behalf of each Trust, but the applicable Trust may require
payment of any tax or other governmental charges that may be imposed in
connection with any transfer or exchange. No Trust will be required to (a)
register or cause to be registered the transfer or exchange of any Capital
Securities during a period beginning at the opening of business 15 days before
the day of the mailing of the relevant notice of redemption and ending at the
close of business on the day of mailing of such notice of redemption, or (b) to
register or cause to be registered the transfer or exchange of any Capital
Securities so selected for redemption, except in the case of any Capital
Securities being redeemed in part, any portion of such Capital Securities not to
be redeemed.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The Property Trustee of each Trust, other than during the occurrence and
continuance of a Trust Enforcement Event, undertakes to perform only such duties
as are specifically set forth in each Declaration and, after such Trust
Enforcement Event, 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 applicable Declaration at the request of any
holder of Capital Securities unless it is offered reasonable indemnity against
the costs, expenses, and liabilities that might be incurred by such exercise. If
no Trust Enforcement Event has occurred and is continuing and the Property
Trustee is required to decide between alternative causes of action, construe
ambiguous provisions in the applicable Declaration, or is unsure of the
application of any provision of such Declaration, and the matter is not one on
which holders of Capital Securities are entitled under such Declaration to vote,
then the Property Trustee shall take such action as is directed by the
Corporation 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.
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PAYMENT AND PAYING AGENTS
Payments in respect of the Capital Securities shall be made to the
Depository, which shall credit the relevant accounts at the Depository on the
applicable Distribution Dates or, if any Trust's Capital Securities are held in
certificated form, such payments shall be made by check mailed to the address of
the holder entitled to such payment as such address shall appear on the register
maintained by the registrar. Unless otherwise specified in the applicable
Prospectus Supplement, the paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Regular Trustees and the Corporation. The Paying Agent shall
be permitted to resign as Paying Agent upon 60 days' written notice to the
Property Trustee and the Corporation. In the event that the Property Trustee
shall no longer be the Paying Agent, the Regular Trustees shall appoint a
successor (which shall be a bank or trust company acceptable to the Regular
Trustees and the Corporation) to act as Paying Agent.
REMOVAL OF DECLARATION TRUSTEES
Unless an Indenture Event of Default shall have occurred and be
continuing, any Declaration Trustee may be removed at any time by the holder of
the Common Securities. If an Indenture Event of Default has occurred and is
continuing, the Property Trustee and the Delaware Trustee may be removed at such
time and a successor trustee appointed by the holders of a majority in
liquidation amount of the outstanding Capital Securities. In no event will the
holders of the Capital Securities have the right to vote to appoint, remove, or
replace the Regular Trustees, which voting rights are vested exclusively in the
Corporation as the holder of the Common Securities. No resignation or removal of
a Declaration 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 Declaration.
MERGER OR CONSOLIDATION OF DECLARATION TRUSTEES
Any corporation into which the Property Trustee, the Delaware Trustee, or
any Regular Trustee that is not a natural person may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion, or consolidation to which such Declaration Trustee shall be a party,
or any corporation succeeding to all or substantially all the corporate trust
business of such Declaration Trustee, shall be the successor of such Declaration
Trustee under each Declaration, provided such corporation shall be otherwise
qualified and eligible.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS, OR REPLACEMENTS OF THE TRUST
A 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 entity, except as described below or as
otherwise described in the applicable Declaration.
A Trust may, at the request of the Corporation without the consent of the
holders of the Capital Securities, 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:
o such successor entity (if not the Trust) either (1) expressly
assumes all of the obligations of the Trust with respect to the
Capital Securities or (2) substitutes for the Capital Securities
other securities having substantially the same terms as the
Capital Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital Securities rank
in priority with respect to distributions and payments upon
liquidation, redemption, and otherwise,
o if the Trust is not the successor entity, the Corporation
expressly appoints a trustee of such successor entity possessing
the same powers and duties as the Property Trustee as the holder
of the Subordinated Debentures,
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o such merger, consolidation, amalgamation, replacement, conveyance,
transfer, or lease does not cause the Capital Securities
(including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization,
o such merger, consolidation, amalgamation, replacement, conveyance,
transfer, or lease does not adversely affect the rights,
preferences, and privileges of the holders of the Capital
Securities (including any Successor Securities) in any material
respect,
o such successor entity has a purpose substantially identical to
that of the Trust,
o prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer, or lease, the Corporation has received an
opinion from independent counsel to the Trust experienced in such
matters to the effect that
o such merger, consolidation, amalgamation, replacement,
conveyance, transfer, or lease does not adversely affect the
rights, preferences, and privileges of the holders of the
Capital Securities (including any Successor Securities) in
any material respect, and
o following such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease, (A) neither the
Trust nor such successor entity will be required to register
as an investment company under the Investment Company Act and
(B) the Trust or the successor entity will continue to be
classified as a grantor trust for United States federal
income tax purposes,
o the Corporation or any permitted successor or assignee owns all of
the common securities of such successor entity and guarantees the
obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee, and
o such successor entity (if not the Trust) expressly assumes all of
the obligations of the Trust with respect to the Trustees.
Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in aggregate liquidation amount of the Capital
Securities, consolidate, amalgamate, merge with or into, be replaced by, or
convey, transfer, or lease its properties and assets substantially as an
entirety to any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger, replacement, conveyance, transfer, or lease would cause
the Trust or the successor entity to be classified as other than a grantor trust
for United States federal income tax purposes.
GOVERNING LAW
The Declaration and the Capital Securities will be governed by, and
construed in accordance with, the laws of the State of Delaware, without regard
to principles of conflict of laws.
DESCRIPTION OF THE GUARANTEES
A Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by each Trust of its Capital Securities for the
benefit of the holders from time to time of such Capital Securities and Common
Securities. The Chase Manhattan Bank will act as trustee ("Guarantee Trustee")
under each Guarantee for purposes of compliance with the Trust Indenture Act and
each Guarantee will be qualified as an indenture under the Trust Indenture Act.
This summary of certain provisions of the Guarantees does not purport to be
complete and is subject to, and qualified in its entirety by reference to, the
Trust Indenture Act and all of the provisions of each Guarantee, including the
definitions in the Guarantee of certain terms. The form of the Guarantee has
been filed as an exhibit to the Registration Statement. The Guarantee Trustee
will hold each Guarantee for the benefit of the holders of the related Trust's
Capital Securities and Common Securities.
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GENERAL
The Corporation will irrevocably and unconditionally agree to pay in full
on a subordinated basis, to the extent set forth in the Guarantee and described
in this Prospectus, the Guarantee Payments (as defined below) to the holders of
the Capital Securities, as and when due, regardless of any defense, right of
set-off, or counterclaim that such Trust may have or assert other than the
defense of payment. The following payments with respect to the Capital
Securities, to the extent not paid by or on behalf of the related Trust (the
"Guarantee Payments"), will be subject to the Guarantee:
o any accumulated and unpaid Distributions required to be paid on
such Capital Securities, to the extent that such Trust has
sufficient funds available for such payment at the time,
o the Redemption Price with respect to any Capital Securities called
for redemption, to the extent that such Trust has sufficient funds
available for such payment at such time, or
o upon a voluntary or involuntary dissolution, winding up, or
liquidation of the Trust (unless the Corresponding Subordinated
Debentures are distributed to holders of such Capital Securities
in exchange therefor), the lesser of (1) the aggregate liquidation
amount of the Capital Securities and all accrued and unpaid
Distributions to the date of payment and (2) the amount of assets
of the Trust remaining available for distribution to holders of
Capital Securities after satisfaction of liabilities to creditors
of such Trust as required by applicable law.
The Corporation's obligation to make a Guarantee Payment may be satisfied by
direct payment of the required amounts by the Corporation to the holders of the
applicable Trust Securities or by causing the Trust to pay such amounts to such
holders.
Each Guarantee will be an irrevocable guarantee on a subordinated basis
of the related Trust's obligations under the Trust Securities, but will apply
only to the extent that such related Trust has sufficient funds available to
make such payments, and is not a guarantee of collection.
If the Corporation does not make interest payments on the Corresponding
Subordinated Debentures held by the related Trust, the Trust will not be able to
pay Distributions on the Capital Securities and will not have funds legally
available for such payment. Each Guarantee will rank subordinate and junior in
right of payment to all Senior Indebtedness of the Corporation and will be pari
passu with all other Guarantees issued by the Corporation and the guarantee
issued by the Corporation in connection with the Outstanding Capital Securities
to the same extent as the Subordinated Debenture. See "-- Status of the
Guarantee" and "Description of the Subordinated Debentures -- Subordination."
Except as otherwise provided in the applicable Prospectus Supplement, the
Guarantees do not limit the incurrence or issuance of other secured or unsecured
debt of the Corporation, whether under the Indenture or any existing or other
indenture that the Corporation may enter into in the future or otherwise.
The Corporation has, through the applicable Guarantee, the applicable
Declaration, the applicable series of Corresponding Subordinated Debentures, and
the Indenture, taken together, fully and unconditionally guaranteed all of the
Trust's obligations under the Capital 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 and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Corresponding Subordinated Debentures, and the
Guarantee."
STATUS OF THE GUARANTEE
Each Guarantee will constitute an unsecured obligation of the Corporation
and will rank subordinate and junior in right of payment to all Senior
Indebtedness of the Corporation and will be pari passu with all other Guarantees
issued by the Corporation and the guarantee issued by the Corporation in
connection with the Outstanding Capital Securities
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to the same extent as the Subordinated Debentures. The Guarantee does not place
a limitation on the amount of additional Senior Indebtedness that may be
incurred by the Corporation. The Corporation expects from time to time to incur
additional indebtedness constituting Senior Indebtedness.
Each Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Guarantor to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity). Each
Guarantee will be held by the Guarantee Trustee for the benefit of the holders
of the related Trust Securities. Each Guarantee will not be discharged except by
payment of the Guarantee Payments in full to the extent not paid by the Trust or
upon distribution to the holders of Trust Securities of the Corresponding
Subordinated Debentures.
AMENDMENTS AND ASSIGNMENT
Except with respect to any changes that do not materially adversely
affect the rights of holders of the related Trust Securities (in which case no
vote will be required), no Guarantee may be amended without the prior approval
of the holders of not less than a majority of the aggregate liquidation amount
of such outstanding Trust Securities. The manner of obtaining any such approval
will be as set forth under "Description of the Capital Securities -- Voting
Rights; Amendment of Each Declaration." All guarantees and agreements contained
in each Guarantee shall bind the successors, assigns, receivers, trustees, and
representatives of the Corporation and shall inure to the benefit of the
registered holders of the related Trust Securities then outstanding.
EVENTS OF DEFAULT
An event of default under each Guarantee will occur upon the failure of
the Corporation to perform any of its payment obligations under the Guarantee or
to perform any non-payment obligation if such non-payment default remains
unremedied for 30 days. The holders of not less than a majority in aggregate
liquidation amount of the related Trust 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 such Guarantee or to direct the exercise of
any trust or power conferred upon the Guarantee Trustee under such Guarantee.
Any holder of the Trust Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under such Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee, or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantees.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Corporation in performance of any Guarantee, undertakes to
perform only such duties as are specifically set forth in each Guarantee and,
after default with respect to any 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 any Guarantee at the
request of any holder of any Trust Securities unless it is offered reasonable
indemnity against the costs, expenses, and liabilities that might be incurred by
such exercise.
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TERMINATION OF THE GUARANTEE
Each Guarantee will terminate and be of no further force and effect upon
full payment of the Redemption Price of all of the related Trust Securities,
upon full payment of the amounts payable upon liquidation of the related Trust,
or upon distribution of Corresponding Subordinated Debentures to the holders of
the related Trust Securities in exchange for all of such Trust Securities. Each
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the related Trust Securities must restore
payment of any sums paid under such Trust Securities or such Guarantee.
GOVERNING LAW
Each Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE CORRESPONDING SUBORDINATED DEBENTURES, AND THE GUARANTEES
FULL AND UNCONDITIONAL GUARANTEE
Payments of Distributions and other amounts due on the Capital Securities
(to the extent the related Trust has funds available for the payment of such
Distributions and other amounts) are irrevocably guaranteed by the Corporation
as and to the extent set forth under "Description of the Guarantees." If and to
the extent that the Corporation does not make payments on any series of
Corresponding Subordinated Debentures, such Trust will not pay Distributions or
other amounts due on the Related Capital Securities. The Guarantees do not cover
payment of Distributions when the related Trust does not have sufficient funds
to pay such Distributions. In such event, a holder of a series of Capital
Securities may institute a legal proceeding directly against the Corporation
under the Indenture to enforce payment of such Distributions to such holder
after the respective due dates.
Taken together, the Corporation's obligations under each series of
Corresponding Subordinated Debentures, the Indenture, the related Declaration,
and the related Guarantee provide, in the aggregate, a full and unconditional
guarantee of payments of Distributions and other amounts due on the Related
Capital 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 and unconditional guarantee of the Trust's
obligations under the Related Capital Securities.
The obligations of the Corporation under each Guarantee and the
Corresponding Subordinated Debentures will be subordinate and junior in right of
payment to all Senior Indebtedness of the Corporation and will be pari passu
with each other Guarantee and series of Subordinated Debentures and with the
$200 million of obligations of the Corporation associated with the Outstanding
Capital Securities.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on
each series of Corresponding Subordinated Debentures, such payments will be
sufficient to cover Distributions and other payments due on the Related Capital
Securities, primarily because:
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<PAGE> 72
o the aggregate principal amount of each series of Corresponding
Subordinated Debentures will be equal to the sum of the aggregate
stated liquidation amount of the Related Capital Securities and
the related Common Securities;
o the interest rate and interest and other payment dates on each
series of Corresponding Subordinated Debentures will match the
Distribution rate and Distribution and other payment dates for the
Related Capital Securities;
o the Corporation will pay for all and any costs, expenses, and
liabilities of such Trust except the Trust's obligations under its
Capital Securities; and
o each Declaration further provides that the Trust will not engage
in any activity that is not consistent with the limited purposes
of such Trust.
Notwithstanding anything to the contrary in the Indenture, the
Corporation has the right to set-off any payment it is otherwise required to
make under the Indenture with, and to the extent the Corporation has theretofore
made or is concurrently on the date of such payment making, a related payment
under the related Guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF CAPITAL SECURITIES
A holder of any related Capital Security may institute a legal proceeding
directly against the Corporation to enforce its rights under the related
Guarantee without first instituting a legal proceeding against the Guarantee
Trustee, the related Trust, or any other person or entity.
A default or event of default under any Senior Indebtedness of the
Corporation will not constitute an Indenture Event of Default. However, in the
event of payment defaults under, or acceleration of, Senior Indebtedness of the
Corporation, the subordination provisions of the Indenture provide that, except
as otherwise specified in the Indenture, no payments may be made in respect of
the Corresponding Subordinated Debentures until such Senior Indebtedness has
been paid in full or any payment default has been cured or waived. Failure to
make required payments on the Corresponding Subordinated Debentures would
constitute an Indenture Event of Default.
LIMITED PURPOSE OF TRUSTS
Each Trust's Capital Securities evidence an undivided beneficial
ownership interest in the assets of such Trust, and each Trust exists for the
sole purpose of issuing its Capital Securities and Common Securities and
investing the proceeds from the sale of such Trust Securities in Corresponding
Subordinated Debentures. A principal difference between the rights of a holder
of Capital Securities and a holder of Corresponding Subordinated Debentures is
that a holder of Corresponding Subordinated Debentures is entitled to receive
from the Corporation the principal amount of and interest accrued on
Corresponding Subordinated Debentures held, while a holder of Capital Securities
is entitled to receive Distributions from such Trust (or from the Corporation
under the applicable Guarantee) if and to the extent such Trust has funds
available for the payment of such Distributions.
RIGHTS UPON DISSOLUTION
Upon any voluntary or involuntary dissolution, winding-up, or liquidation
of any Trust involving the liquidation of the Corresponding Subordinated
Debentures, after satisfaction of liabilities to creditors of the Trust as
required by applicable law, the holders of the Related Capital Securities will
be entitled to receive, out of assets held by such Trust, the Liquidation
Distribution in cash. See "Description of the Capital Securities -- Liquidation
Distribution Upon Dissolution." Upon any voluntary or involuntary liquidation or
bankruptcy of the Corporation, the Property Trustee, as holder of the
Corresponding Subordinated Debentures, would be a subordinated creditor of the
Corporation, subordinated in right of payment to all Senior Indebtedness to the
extent set forth in the Indenture, but entitled to receive payment in full of
principal and interest before any stockholders of the Corporation receive
payments or distributions.
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Since the Corporation is the guarantor under each Guarantee and has agreed to
pay for all costs, expenses, and liabilities of each Trust (other than the
Trust's obligations to the holders of its Capital Securities), the positions of
a holder of such Capital Securities and a holder of such Corresponding
Subordinated Debentures relative to other creditors and to stockholders of the
Corporation in the event of liquidation or bankruptcy of the Corporation are
expected to be substantially the same.
BOOK-ENTRY ISSUANCE
The Depository Trust Company, New York, New York (the "Depository"), will
act as securities depositary for all of the Capital Securities and the
Subordinated Debentures, unless otherwise specified in the Prospectus Supplement
relating to an offering of Capital Securities or Subordinated Debentures. The
Capital Securities and the Subordinated Debentures will be issued only as
fully-registered securities (in either temporary or permanent form) registered
in the name of the Depository or its nominee. One or more fully-registered
global certificates will be issued for the Capital Securities of each Trust and
the Subordinated Debentures, representing in the aggregate the total number of
such Trust's Capital Securities or aggregate principal balance of Subordinated
Debentures, respectively, and will be deposited with the Depository or the
Property Trustee, as custodian for the Depository. Unless and until it is
exchanged in whole or in part for individual certificates for Capital Securities
or Subordinated Debentures, a global certificate for such securities may not be
transferred except as a whole:
o by the Depository to a nominee of the Depository,
o by a nominee of the Depository to such Depository or another
nominee of the Depository, or
o by the Depository or any nominee to a successor depositary or any
nominee of such successor.
The Depository has advised the Trusts and the Corporation that the
Depository is a limited-purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code, and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Exchange
Act. The Depository holds securities for its participating organizations
(collectively, the "Participants") and facilitates the clearance and settlement
of transactions in those securities between Participants through electronic
book-entry changes in accounts of its Participants, thereby eliminating the need
for physical movement of certificates. The Participants include securities
brokers and dealers, banks, trust companies, clearing corporations, and certain
other organizations. Access to the Depository's system also is available to
other entities such as banks, brokers, dealers, and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants").
Purchases of Capital Securities or Subordinated Debentures within the
Depository's system must be made by or through Participants, which will receive
a credit for the Capital Securities or Subordinated Debentures on the
Depository's records. The ownership interest of the actual purchaser of each
Capital Security and each Subordinated Debenture ("Beneficial Owner") will in
turn be recorded on the Participants' and Indirect Participants' records. The
Depository will have no knowledge of the actual Beneficial Owners of the Capital
Securities or Subordinated Debentures. The Depository's records will reflect
only the identity of the Participants to whose accounts such Capital Securities
or Subordinated Debentures are credited, which may or may not be the Beneficial
Owners. The Participants and Indirect Participants will remain responsible for
keeping account of their holdings on behalf of their customers. Beneficial
Owners will not receive written confirmation from the Depository 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 Participants or Indirect Participants through which the
Beneficial Owners purchased Capital Securities or Subordinated Debentures.
Transfers of ownership interests in the Capital Securities or
Subordinated Debentures will 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 Capital
Securities or Subordinated Debentures, except in the event
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that use of the book-entry system for the Capital Securities of such Trust or
Subordinated Debentures is discontinued (see below).
The laws of some states require that certain persons take physical
delivery in certificated form of securities that they own. Consequently, the
ability to transfer beneficial interests in a Capital Security or Subordinated
Debenture to such persons will be limited to that extent. Because the Depository
can act only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Capital Security or Subordinated Debenture to pledge such
interests to persons or entities that do not participate in the Depository's
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests.
Redemption notices will be sent the Depository or its nominee as the
registered holder of the Capital Securities or Subordinated Debentures. If less
than all of a Trust's Capital Securities or the Subordinated Debentures are to
be redeemed, the Depository's practice is to determine by lot the amount of the
interest of each Direct Participant to be redeemed.
Distribution payments on the Capital Securities or interest payments on
Subordinated Debentures (unless they are Corresponding Subordinated Debentures)
will be made by the relevant Trustee or the Corporation, respectively, to the
Depository or its nominee, as the record holder of such securities. The relevant
Trustee and the Corporation will treat the Depository or its nominee as the sole
owner of such securities for the purpose of receiving such payments and for any
and all other purposes whatsoever. Consequently, none of the Corporation, any
Declaration Trustees, any Paying Agent or securities registrar, nor any other
agent of the Declaration Trustees has or will have any responsibility or
liability for (a) any aspect of the Depository's records or any Participant's or
Indirect Participant's records relating to or payments made on account of
beneficial ownership interests in the Capital Securities or the Subordinated
Debentures, or for maintaining, supervising, or reviewing any of the
Depository's records or any Participant's or Indirect Participant's records
relating to such beneficial ownership interests, or (b) any other matter
relating to the actions and practices of the Depository or any of its
Participants or Indirect Participants.
The Depository has advised the Trusts and the Corporation that its
current practice, upon receipt of any payment in respect of securities such as
the Capital Securities and the Subordinated Debentures, is to credit the
accounts of the relevant Participants with the payment on the relevant payment
date in accordance with their respective holdings shown on the Depository's
records unless the Depository has reason to believe it will not receive payment
on such payment date. Payments by the Participants and the Indirect Participants
to Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of the Participants or the Indirect
Participants and will not be the responsibility of the Depository, the relevant
Trustees, the relevant Trust, or the Corporation. None of the Corporation, the
relevant Trust, or the relevant Trustee will be liable for any delay by the
Depository or any of its Participants in identifying the Beneficial Owners. The
Corporation, the relevant Trust, and the relevant Trustees may conclusively rely
on and will be protected in relying on instructions from the Depository or its
nominee for all purposes.
Interests in the Capital Securities and Subordinated Debentures will
trade in the Depository's Same-Day Funds Settlement System and secondary market
trading activity in such interests will therefore settle in immediately
available funds, subject in all cases to the rules and procedures of the
Depository and its Participants. Transfers between Participants in the
Depository will be effected in accordance with the Depository's procedures, and
will be settled in same-day funds.
Although voting with respect to the Capital Securities or the
Subordinated Debentures is limited to the holders of record of the Capital
Securities or Subordinated Debentures, in those instances in which a vote is
required, neither the Depository nor its nominee will itself consent or vote
with respect to Capital Securities or Subordinated Debentures. Under its usual
procedures, the Depository would mail an omnibus proxy to the relevant Trustee
as soon as possible after the record date assigning all consenting or voting
rights to those Direct Participants to whose accounts such Capital Securities or
Subordinated Debentures are credited on the record date.
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The Depository may discontinue providing its services as securities
depositary with respect to any of the Capital Securities or the Subordinated
Debentures at any time by giving reasonable notice to the relevant Trustee and
the Corporation. In the event that a successor securities depositary is not
obtained, definitive Capital Security or Subordinated Debenture certificates
representing such Capital Securities or Subordinated Debentures are required to
be printed and delivered. The Corporation, at its option, may decide to
discontinue use of the system of book-entry transfers through the Depository (or
a successor depositary). After an Event of Default or any event which after
notice or lapse of time or both would be an Event of Default under the relevant
Declaration, the holders of a majority in liquidation amount of Capital
Securities or aggregate principal amount of Subordinated Debentures may
determine to discontinue the system of book-entry transfers through the
Depository. In any such event, definitive certificates for such Capital
Securities or Subordinated Debentures will be printed and delivered.
The information in this section concerning the Depository and its
book-entry system has been obtained from sources that the Trusts and the
Corporation believe to be reliable, but the Trusts and the Corporation assume no
responsibility for the accuracy of such information. None of the Trustees, the
Trusts, nor the Corporation has any responsibility for the performance by the
Depository or its Participants of their respective obligations as described
above or under the rules and procedures governing their respective operations.
PLAN OF DISTRIBUTION
The Subordinated Debentures or the Capital Securities may be sold in a
public offering to or through underwriters or dealers designated from time to
time. The Corporation and each Trust may sell its Subordinated Debentures or
Capital Securities as soon as practicable after effectiveness of the
Registration Statement of which this Prospectus forms a part. The names of any
underwriters or dealers involved in the sale of the Subordinated Debentures or
Capital Securities in respect of which this Prospectus is delivered, the amount
or number of Subordinated Debentures and Capital Securities to be purchased by
any such underwriters, and any applicable commissions or discounts will be set
forth in the applicable Prospectus Supplement.
Underwriters may offer and sell Subordinated Debentures or Capital
Securities at a fixed price or prices, which may be changed, or from time to
time at market prices prevailing at the time of sale, at prices related to such
prevailing market prices, or at negotiated prices. In connection with the sale
of Capital Securities, underwriters may be deemed to have received compensation
from the Corporation and/or the applicable Trust in the form of underwriting
discounts or commissions and also may receive commissions. Underwriters may sell
Subordinated Debentures or Capital Securities to or through dealers, and such
dealers may receive compensation in the form of discounts, concessions, or
commissions from the underwriters.
Any underwriting compensation paid by the Corporation and/or the
applicable Trust to underwriters in connection with the offering of Subordinated
Debentures or Capital Securities, and any discounts, concessions, or commissions
allowed by such underwriters to participating dealers, will be described in an
accompanying Prospectus Supplement. Underwriters and dealers participating in
the distribution of Subordinated Debentures or Capital Securities may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of such Subordinated Debentures or Capital
Securities may be deemed to be underwriting discounts and commissions, under the
Securities Act.
Underwriters and dealers may be entitled, under agreement with the
Corporation and the applicable Trust, to indemnification against and
contribution toward certain civil liabilities, including liabilities under the
Securities Act, and to reimbursement by the Corporation for certain expenses.
The underwriters and any selling group members and their respective
affiliates may engage in transactions effected in accordance with Rule 104 of
the Securities and Exchange Commission's Regulation M that are intended to
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<PAGE> 76
stabilize, maintain, or otherwise affect the market price of the Capital
Securities. Such transactions may include over-allotment transactions in which
an underwriter creates a short position in its own account by selling more
Capital Securities or Subordinated Debentures than it is committed to purchase
from a Trust. In such a case, to cover all or part of the short position, such
underwriter may purchase Capital Securities of the same series or Subordinated
Debentures in the open market following completion of the initial offering of
such Capital Securities or Subordinated Debentures. The underwriters also may
engage in stabilizing transactions in which they bid for, and purchase, Capital
Securities or Subordinated Debentures at a level above that which might
otherwise prevail in the open market for the purpose of preventing or retarding
a decline in the market price of such Capital Securities or Subordinated
Debentures. The underwriters also may reclaim any selling concessions allowed to
a dealer if an underwriter repurchases shares distributed by that dealer. Any of
the foregoing transactions may result in the maintenance of a price for the
Capital Securities of a series or Subordinated Debentures at a level above that
which might otherwise prevail in the open market. Neither the Corporation nor
any underwriters can make any representation or prediction as to the direction
or magnitude of any effect that the transactions described above may have on the
price of the Capital Securities or Subordinated Debentures. The underwriters are
not required to engage in any of the foregoing transactions and, if commenced,
such transactions may be discontinued at any time without notice.
Underwriters and dealers or their affiliates may engage in transactions
with, or perform investment or commercial banking services for, the Corporation
and/or the applicable Trust and/or any of their affiliates in the ordinary
course of business. Such underwriters and dealers or their affiliates may
receive customary fees and commissions in connection with these transactions.
The Subordinated Debentures and the Capital Securities will be new
issues of securities and will have no established trading market. Any
underwriters to whom Subordinated Debentures or Capital Securities are sold for
public offering and sale may make a market in such Subordinated Debentures and
Capital Securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. Such Subordinated
Debentures or Capital Securities may or may not be listed on a national
securities exchange or the Nasdaq National Market. No assurance can be given as
to the liquidity of or the existence of trading markets for any Subordinated
Debentures or Capital Securities.
VALIDITY OF SECURITIES
Unless otherwise indicated in the applicable Prospectus Supplement,
certain matters of Delaware law relating to the validity of the Capital
Securities, the enforceability of the Declarations, and the creation of the
Trusts will be passed upon on behalf of the Corporation and the Trusts by
Richards, Layton & Finger P.A., special Delaware counsel to the Corporation and
the Trusts. Unless otherwise indicated in the applicable Prospectus Supplement,
the validity of the Subordinated Debentures and the Guarantees will be passed
upon for the Corporation and the Trusts by Porter, Wright, Morris & Arthur and
for the Underwriters by Sullivan & Cromwell. Porter, Wright, Morris & Arthur and
Sullivan & Cromwell will rely as to certain matters of Delaware law on the
opinion of Richards, Layton & Finger, P.A. Sullivan & Cromwell from time to time
performs legal services for the Corporation.
EXPERTS
The consolidated financial statements of the Corporation incorporated by
reference in the Corporation's Annual Report on Form 10-K for the year ended
December 31, 1997, incorporated by reference herein have been audited by Ernst &
Young LLP, independent auditors, as set forth in their report included therein
and incorporated herein by reference, which, as to the years 1996 and 1995, is
based in part on the reports of BDO Seidman, LLP, independent auditors. Such
financial statements audited by Ernst & Young LLP are incorporated by reference
herein in reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following expenses will be incurred in connection with the issuance
and distribution of the Securities being registered, other than underwriting
discounts and commissions. All of the expenses will be borne by the Corporation.
<TABLE>
<S> <C>
Registration Fee.............................................. $ 73,750
Legal Services................................................ 100,000
Printing and Engraving........................................ 50,000
Accounting Fees............................................... 10,000
Blue Sky Fees and Expenses.................................... 5,000
Miscellaneous ................................................ 1,250
------------
Total......................................................... 240,000
============
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Articles of Incorporation of Huntington Bancshares Incorporated
(the "Corporation"), as amended, provide that it shall indemnify its directors
to the full extent of the general laws of the State of Maryland now or hereafter
in force, including the advance of expenses to directors subject to procedures
provided by such laws; its officers to the same extent it shall indemnify its
directors; and its officers who are not directors to such further extent as
shall be authorized by the Board of Directors and be consistent with law.
Section 2-418 of the Maryland general corporation law provides, in
substance, that a corporation may indemnify any director made a party to any
proceeding by reason of service in that capacity against judgments, penalties,
fines, settlements, and reasonable expenses actually incurred by the director in
connection with the proceeding, unless it is proved that the act or omission of
the director was material to the cause of action adjudicated in the proceeding
and was committed in bad faith or was the result of active and deliberate
dishonesty; or the director actually received an improper personal benefit in
money, property, or services; or, in the case of any criminal proceeding, the
director had reasonable cause to believe that the act or omission was unlawful.
Notwithstanding the above, a director may not be indemnified in respect of any
proceeding, by or in the right of the corporation, in which such director shall
have been adjudged liable to the corporation or in respect of any proceeding
charging improper receipt of a personal benefit.
Termination of any proceeding by judgment, order, or settlement does
not create a presumption that the director did not meet the requisite standard
of conduct. Termination of any proceeding by conviction, plea of nolo contendere
or its equivalent, or entry of an order of probation prior to judgment, creates
a rebuttable presumption that the director did not meet the requisite standard
of conduct. Indemnification is not permitted unless authorized for a specific
proceeding, after a determination that indemnification is permissible because
the requisite standard of conduct has been met (1) by a majority of a quorum of
directors not at the time parties to the proceeding (or a majority of a
committee of two or more such directors designated by the full board); (2) by
special legal counsel selected by the board of directors; or (3) by the
stockholders.
<PAGE> 78
The reasonable expenses incurred by a director who is a party to a
proceeding may be paid or reimbursed by the corporation in advance of the final
disposition of the proceeding upon receipt by the corporation of both a written
affirmation by the director of his good faith belief that the standard of
conduct necessary for indemnification by the corporation has been met, and a
written undertaking by or on behalf of the director to repay the amount if it
shall be ultimately determined that the standard of conduct has not been met.
The indemnification and advancement of expenses provided or authorized
by Section 2-418 are not exclusive of any other rights to which a director may
be entitled both as to action in his official capacity and as to action in
another capacity while holding such office.
Pursuant to Section 2-418, a corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee,
or agent of the corporation, or who, while serving in such capacity, is or was
at the request of the corporation serving as a director, officer, partner,
trustee, employee, or agent of another corporation or legal entity or of an
employee benefit plan, against liability asserted against and incurred by such
person in any such capacity or arising out of such person's position, whether or
not the corporation would have the power to indemnify against liability under
Section 2-418. A corporation may provide similar protection, including a trust
fund, letter of credit, or surety bond, which is not inconsistent with Section
2-418. A subsidiary or an affiliate of the corporation may provide the insurance
or similar protection.
Subject to certain exceptions, the directors and officers of the
Corporation and its affiliates are insured to the extent of 100% of loss up to a
maximum of $35,000,000 (subject to certain deductibles) in each policy year
because of any claim or claims made against them by reason of their wrongful
acts while acting in their capacities as such directors or officers and up to a
maximum of $10,000,000 (subject to certain deductibles) in each policy year
because of any claim or claims made against them by reason of their wrongful
acts while acting in their capacities as fiduciaries in the administration of
certain of the Corporation's employee benefit programs. The Corporation is
insured, subject to certain retentions and exceptions, to the extent it shall
have indemnified the directors and officers for such loss.
Under each Amended and Restated Declaration of Trust, the Corporation
will agree to indemnify each of the Trustees, and to hold such Trustees harmless
against any loss, liability, or expense incurred without negligence or bad faith
on their part, arising out of or in connection with the acceptance of
administration of such Declaration of Trust, including the costs and expenses of
defense against or investigating any claim or liability in connection with the
exercise or performance of any of their powers or duties under the Declaration
of Trust, which is filed as an exhibit to this Registration Statement.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) EXHIBITS.
EXHIBIT
NO. DESCRIPTION
1 Form of Underwriting Agreement.
4(a) * Certificate of Trust of Huntington Capital II.
4(b) * Declaration of Trust of Huntington Capital II.
4(c) * Certificate of Trust of Huntington Capital III.
4(d) * Declaration of Trust of Huntington Capital III.
4(e) * Certificate of Trust of Huntington Capital IV.
4(f) * Declaration of Trust of Huntington Capital IV.
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4(g) * Certificate of Trust of Huntington Capital V.
4(h) * Declaration of Trust of Huntington Capital V.
4(i) * Certificate of Trust of Huntington Capital VI.
4(j) * Declaration of Trust of Huntington Capital VI.
4(k) Form of Indenture, between the Corporation and
The Chase Manhattan Bank, as Indenture Trustee.
4(l) Form of Amended and Restated Declaration of Trust of
Huntington Capital II, III, IV, V, and VI.
4(m) Form of Certificate of Capital Security for
Huntington Capital II, III, IV, V, and VI (included
as an exhibit to Exhibit 4(l)).
4(n) Form of Guarantee Agreement for Huntington Capital
II, III, IV, V, and VI.
5(a) Opinion of Porter, Wright, Morris & Arthur as to
validity of the Subordinated Debentures and the
Guarantee to be issued by the Corporation.
5(b) Opinion of Richards, Layton & Finger as to validity
of the Capital Securities of Huntington Capital II.
5(c) Opinion of Richards, Layton & Finger as to validity
of the Capital Securities of Huntington Capital III.
5(d) Opinion of Richards, Layton & Finger as to validity
of the Capital Securities of Huntington Capital IV.
5(e) Opinion of Richards, Layton & Finger as to validity
of the Capital Securities of Huntington Capital V.
5(f) Opinion of Richards, Layton & Finger as to validity
of the Capital Securities of Huntington Capital VI.
8 Opinion of Porter, Wright, Morris & Arthur as to
certain federal income tax matters.
12 * Computations of Consolidated Ratios of Earnings to
Fixed Charges.
23(a) * Consent of Ernst & Young LLP.
23(b) * Consent of BDO Seidman, LLP.
23(c) Consent of Porter, Wright, Morris & Arthur (included
in Exhibits 5(a) and 8).
23(d) Consent of Richards, Layton & Finger (included in
Exhibits 5(b)-(f)).
24 * Powers of Attorney.
25(a) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Indenture.
25(b) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Amended
and Restated Declaration of Trust of Huntington
Capital II.
25(c) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Amended
and Restated Declaration of Trust of Huntington
Capital III.
25(d) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Amended
and Restated Declaration of Trust of Huntington
Capital IV.
25(e) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Amended
and Restated Declaration of Trust of Huntington
Capital V.
25(f) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank to act as Trustee under the Amended
and Restated Declaration of Trust of Huntington
Capital VI.
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25(g) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank under the Guarantee for the benefit of
the holders of the Capital Securities of Huntington
Capital II.
25(h) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank under the Guarantee for the benefit of
the holders of the Capital Securities of Huntington
Capital III.
25(i) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank under the Guarantee for the benefit of
the holders of the Capital Securities of Huntington
Capital IV.
25(j) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank under the Guarantee for the benefit of
the holders of the Capital Securities of Huntington
Capital V.
25(k) * Form T-1 Statement of Eligibility of The Chase
Manhattan Bank under the Guarantee for the benefit of
the holders of the Capital Securities of Huntington
Capital VI.
(b) FINANCIAL STATEMENT SCHEDULES
None.
* Previously filed with this Registration Statement.
ITEM 17. UNDERTAKINGS.
Each of the undersigned Registrants hereby undertake:
(1) to file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii)to reflect in the prospectus any facts or events arising
after the effective date of this Registration Statement (or
the most recent post-effective amendment thereto) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in this Registration
Statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in post-effective amendment by
those paragraphs is contained in periodic reports filed by a Registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act
of 1934 that are incorporated by reference in this Registration
Statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof;
II-4
<PAGE> 81
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Columbus, State
of Ohio, on June 4, 1998.
HUNTINGTON BANCSHARES INCORPORATED
By: /s/ Gerald R. Williams
----------------------------------
Gerald R. Williams
Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
*Frank Wobst Chairman and Chief Executive Officer )
- ------------------------- (principal executive officer) )
Frank Wobst )
)
)
*Zuheir Sofia President, Chief Operating Officer )
- ------------------------- Treasurer, and Director )
Zuheir Sofia )
)
)
*Gerald R. Williams Executive Vice President and )
- ------------------------- Chief Financial Officer )
Gerald R. Williams (principal financial officer and )
accounting officer) )
)
)
)
Director )
- ------------------------- )
Don M. Casto, III )
) June 4, 1998
)
*Don Conrad Director )
- ------------------------- )
Don Conrad )
)
)
*Patricia T. Hayot Director )
- ------------------------- )
Patricia T. Hayot )
)
)
*Wm. J. Lhota Director )
- ------------------------- )
Wm. J. Lhota )
)
)
*Robert H. Schottenstein Director )
- ------------------------- )
Robert H. Schottenstein )
)
)
</TABLE>
II-6
<PAGE> 82
<TABLE>
<S> <C> <C>
*George A. Skestos Director )
- ------------------------- )
George A. Skestos )
)
)
*Lewis R. Smoot, Sr. Director )
- ------------------------- )
Lewis R. Smoot, Sr. )
) June 4, 1998
)
*Timothy P. Smucker Director )
- ------------------------- )
Timothy P. Smucker )
)
)
*William J. Williams Director )
- ------------------------- )
William J. Williams )
</TABLE>
*By: /s/ Gerald R. Williams
---------------------------
Gerald R. Williams, attorney in fact
Pursuant to the requirements of the Securities Act of 1933, Huntington
Capital II has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Columbus, State of Ohio, on June 4, 1998.
HUNTINGTON CAPITAL II
By: HUNTINGTON BANCSHARES INCORPORATED
as sponsor
By: /s/ Gerald R. Williams
--------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, Huntington
Capital III has duly caused this Amendment No. 1 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Columbus, State of Ohio, on June 4, 1998.
HUNTINGTON CAPITAL III
By: HUNTINGTON BANCSHARES INCORPORATED
as sponsor
By: /s/ Gerald R. Williams
--------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, Huntington
Capital IV has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Columbus, State of Ohio, on June 4, 1998.
HUNTINGTON CAPITAL IV
By: HUNTINGTON BANCSHARES INCORPORATED
as sponsor
By: /s/ Gerald R. Williams
--------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer
II-7
<PAGE> 83
Pursuant to the requirements of the Securities Act of 1933, Huntington
Capital V has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Columbus, State of Ohio, on June 4, 1998.
HUNTINGTON CAPITAL V
By: HUNTINGTON BANCSHARES INCORPORATED
as sponsor
By: /s/ Gerald R. Williams
--------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, Huntington
Capital VI has duly caused this Amendment No. 1 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Columbus, State of Ohio, on June 4, 1998.
HUNTINGTON CAPITAL VI
By: HUNTINGTON BANCSHARES INCORPORATED
as sponsor
By: /s/ Gerald R. Williams
--------------------------
Gerald R. Williams
Executive Vice President and
Chief Financial Officer
II-8
<PAGE> 1
Exhibit 1
HUNTINGTON CAPITAL II
HUNTINGTON CAPITAL III
HUNTINGTON CAPITAL IV
HUNTINGTON CAPITAL V
HUNTINGTON CAPITAL VI
Preferred Securities
guaranteed to the extent set forth in Guarantees by
HUNTINGTON BANCSHARES INCORPORATED
Underwriting Agreement Standard Provisions
(June ___, 1998)
From time to time, Huntington Capital II, Huntington Capital
III, Huntington Capital IV, Huntington Capital V and Huntington Capital VI, each
a statutory business trust formed under the laws of the State of Delaware (each
a "Trust" and collectively, the "Trusts"), and Huntington Bancshares
Incorporated, a Maryland corporation (the "Company"), as Sponsor of each Trust
and as Guarantor, may enter into one or more Underwriting Agreements (each an
"Underwriting Agreement") in the form of Annex I hereto, with such additions and
deletions as the parties thereto may determine, and, subject to the terms and
conditions stated herein and therein, which shall provide that the Trust
identified in the applicable Underwriting Agreement (such Trust being the
"Designated Trust" with respect to such Underwriting Agreement) shall issue and
sell to the firms named in Schedule I to the applicable Underwriting Agreement
(such firms constituting the "Underwriters" with respect to such Underwriting
Agreement and the securities specified therein) certain of its preferred capital
securities (the "Securities") identified in Schedule I to the applicable
Underwriting Agreement (with respect to such Underwriting Agreement, the
"Designated Securities") representing undivided beneficial interests in the
assets of the Designated Trust. The proceeds of the concurrent sales of the
Designated Securities to the public and of the common securities of the
Designated Trust (the "Common Securities") to the Company are to be invested in
junior subordinated debentures of the Company with respect to such Designated
Securities (with respect to such Underwriting Agreement, the "Subordinated
Debentures"), to be issued pursuant to a junior subordinated indenture dated as
of June 4, 1998, between the Company and The Chase Manhattan Bank, as trustee
(the "Indenture"). The Designated Securities may be exchangeable into
Subordinated Debentures as specified in Schedule II to such Underwriting
Agreement. The Designated Securities will be guaranteed by the Company to the
extent set forth in the Underwriting Agreement with respect to such Designated
Securities (with respect to such Underwriting Agreement, the "Guarantee").
<PAGE> 2
The Company and the Trusts have filed with the Securities and
Exchange Commission (the "Commission") a registration statement, including a
prospectus, relating to the Subordinated Debentures, the Securities and the
Guarantees and have filed with, or transmitted for filing to, or shall promptly
hereafter file with or transmit for filing to, the Commission a prospectus
supplement (the "Prospectus Supplement") pursuant to Rule 424 under the
Securities Act of 1933, as amended (the "Securities Act"), specifically relating
to the Designated Securities, the related Guarantee and the Subordinated
Debentures offered pursuant to this Agreement. The registration statement as
amended at the date of this Agreement, including information, if any, deemed to
be part of the registration statement at the time of effectiveness pursuant to
Rule 430A under the Securities Act is hereinafter referred to as the
"Registration Statement." The term "Basic Prospectus" means the prospectus
included in the Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the Prospectus Supplement. The term "preliminary
prospectus" means a preliminary prospectus supplement specifically relating to
the Designated Securities, together with the Basic Prospectus. As used herein,
the terms "Basic Prospectus", "Prospectus" and "preliminary prospectus" shall
include in each case the documents, if any, incorporated by reference therein.
The terms "supplement", "amendment" and "amend" as used herein shall include all
documents deemed to be incorporated by reference in the Prospectus that are
filed subsequent to the date of the Basic Prospectus by the Company with the
Commission pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The terms and rights of any particular issuance of Designated
Securities shall be as specified in the Underwriting Agreement relating thereto
and in or pursuant to the amended and restated declaration of trust identified
in such Underwriting Agreement (with respect to such Underwriting Agreement, the
"Declaration").
1. The Underwriting. Particular sales of Designated Securities
may be made from time to time to the Underwriters of such Designated Securities,
for whom the firms designated as representatives of the Underwriters of such
Designated Securities in the Underwriting Agreement relating thereto will act as
representatives (the "Representatives"). The term "Representatives" also refers
to a single firm acting as sole representative of the Underwriters and to
Underwriters who act without any firm being designated as their representative.
These Underwriting Agreement Standard Provisions shall not be construed as an
obligation of any Trust to sell any of its preferred securities or as an
obligation of any Underwriters to purchase any of such capital securities. The
obligation of any Trust to issue and sell any of its capital securities and the
obligation of any Underwriters to purchase any of such capital securities shall
be evidenced by the Underwriting Agreement with respect to the Designated
Securities specified therein. Each Underwriting Agreement shall specify the
maximum number of Designated Securities, the initial public offering price of
such Designated Securities or the manner of determining such price, the terms of
the Designated Securities, including the terms on which and terms of the
securities into which the Designated Securities will be exchangeable, the
purchase
-2-
<PAGE> 3
price to the Underwriters of such Designated Securities, the names of the
Underwriters of such Designated Securities, the names of the Representatives of
such Underwriters, the number of such Designated Securities to be purchased by
each Underwriter and the commission, if any, payable to the Underwriters with
respect thereto and shall set forth the date, time and manner of delivery of
such Designated Securities and payment therefor. The Underwriting Agreement
shall also specify (to the extent not set forth in the Declaration with respect
thereto or the Registration Statement and Prospectus as amended or supplemented)
the terms of such Designated Securities. Any Underwriting Agreement shall be in
the form of an executed writing (which may be in counterparts), and may be
evidenced by an exchange of telegraphic communications or any other rapid
transmission device designed to produce a written record of communications
transmitted. The standard provisions set forth herein will be incorporated by
reference in any Underwriting Agreement. The obligations of the Underwriters
under each Underwriting Agreement shall be several and not joint.
2. Representations and Warranties. Each of the Designated
Trust and the Company, jointly and severally, represents and warrants to, and
agrees with, each of the Underwriters that:
(a) The Registration Statement has been declared effective; no
stop order suspending the effectiveness of the Registration Statement
has been issued and no proceeding for that purpose has been initiated
or threatened by the Commission;
(b) The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus or any further
amendment or supplement thereto, when such documents become effective
or are filed with the Commission, as the case may be, will conform in
all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not 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;
provided, however, that this representation and warranty shall not
apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Designated
Trust or the Company by an Underwriter of Designated Securities through
the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Designated Securities;
-3-
<PAGE> 4
(c) The Registration Statement and the Prospectus conform, and
any further amendments or supplements to the Registration Statement or
the Prospectus will conform, in all material respects to the
requirements of the Securities Act and the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the rules and regulations
of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any
amendment thereto and as of the applicable filing date as to the
Prospectus and any amendment or supplement thereto, 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; provided, however, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon
and in conformity with information furnished in writing to the
Designated Trust or the Company by an Underwriter of Designated
Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Designated
Securities or to that part of the Registration Statement which shall
constitute the Statement of Eligibility under the Trust Indenture Act
(Form T-1) of The Chase Manhattan Bank;
(d) The Designated Trust has been duly created and is validly
existing as a business trust in good standing under the Business Trust
Act of the State of Delaware (the Delaware Business Trust Act), with
power and authority (trust and other) to own its property and conduct
its business as described in the Prospectus, and to enter into and
perform its obligations under this Agreement and the Designated
Securities and to consummate the transactions contemplated by the
Underwriting Agreement with respect to such Designated Securities
(including without limitation the provisions hereof incorporated by
reference therein) and the Declaration of the Designated Trust; the
Designated Trust has conducted and will conduct no business other than
the transactions contemplated by the Underwriting Agreement (including
without limitation the provisions hereof incorporated by reference
therein) and described in the Prospectus as amended and supplemented
with respect to the Designated Securities; the Designated Trust is not
a party to or bound by any agreement or instrument other than the
Underwriting Agreement with respect to the sale of such Designated
Securities (including without limitation the provisions hereof
incorporated by reference therein), and the Declaration of the
Designated Trust and the agreements and instruments contemplated by
such Declaration and described in the Prospectus as amended and
supplemented with respect to the Designated Securities; the Designated
Trust has no liabilities or obligations other than those arising out of
the transactions contemplated by the Underwriting Agreement with
respect to such Designated Securities (including without limitation the
provisions hereof incorporated by reference therein) and the
Declaration of the Designated Trust and described in the Prospectus as
amended and supplemented with respect to such Designated Securities;
the Designated Trust is not a party to or subject to any action, suit
or proceeding of any nature;
-4-
<PAGE> 5
the Designated Trust is not, and at the Time of Delivery (as defined in
Section 4 hereof) will not be, classified as an association taxable as
a corporation for United States federal income tax purposes;
(e) The Designated Securities have been duly authorized on
behalf of the Designated Trust by the Company, as sponsor of the
Designated Trust, and, when the Designated Securities are issued and
delivered pursuant to the Underwriting Agreement (including without
limitation the provisions hereof incorporated by reference therein)
with respect to such Designated Securities, will have been duly and
validly issued and fully paid and non-assessable beneficial interests
in the Designated Trust entitled to the benefits provided by the
Declaration which will be substantially in the form filed as an exhibit
to the Registration Statement; and the capital securities of the
Designated Trust conform to the description thereof contained in the
Registration Statement and the Designated Securities will conform to
the description thereof contained in the Prospectus as amended or
supplemented with respect to such Designated Securities;
(f) The holders of the Designated Securities (the
"Securityholders") 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;
the issuance of the Designated Securities is not subject to preemptive
or similar rights;
(g) The Common Securities of the Designated Trust have been
duly authorized on behalf of the Designated Trust by the Company, as
sponsor of the Designated Trust, and upon delivery by the Designated
Trust to the Company against payment therefor as set forth in the
Declaration, will be duly and validly issued, fully paid, beneficial
interests in the Designated Trust and will conform to the description
thereof contained in the Prospectus; the issuance of the Common
Securities is not subject to preemptive or other similar rights; and at
the Time of Delivery, all of the issued and outstanding Common
Securities of the Designated Trust will be directly owned by the
Company free and clear of liens, encumbrances, equities or claims;
(h) The Guarantee, the Declaration, the Subordinated
Debentures, and the Indenture (the Guarantee, the Declaration, the
Subordinated Debentures and the Indenture being collectively referred
to as the "Company Agreements") have each been duly authorized and when
validly executed and delivered by the Company and, in the case of the
Guarantee, by the Guarantee Trustee (as defined in the Guarantee), in
the case of the Declaration, by the Declaration Trustees (as defined in
the Declaration) and, in the case of the Indenture, by the Trustee
named therein (the "Debenture Trustee"), and, in the case of the
Subordinated
-5-
<PAGE> 6
Debentures, when validly issued by the Company and validly
authenticated and delivered by the Debenture Trustee, will constitute
valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles; the Declaration,
the Indenture and the Guarantee have each been duly qualified under the
Trust Indenture Act; the Subordinated Debentures are entitled to the
benefits of the Indenture; and the Company Agreements, which will be in
substantially the form filed as exhibits to the Registration Statement,
will conform to the descriptions thereof in the Prospectus as amended
or supplemented with respect to the Designated Securities to which they
relate;
(i) The execution, delivery and performance of this
Agreement, the Declaration, the Common Securities and the Designated
Securities by the Trust, the issue and sale of the Designated
Securities, the purchase of the Junior Subordinated Debentures by the
Designated Trust from the Company, the distribution of the Junior
Subordinated Debentures upon the liquidation of the Designated Trust
in the circumstances contemplated by the Declaration and described in
the Prospectus, and the consummation of the transactions contemplated
herein and in the Declaration (the "Trust Transactions") or this
Agreement, will not result in any violation of any statute or any
order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Designated Trust, and no consent,
approval, authorization, order, registration or qualification of or
with any court or governmental agency or body is required for the
Trust Transactions except for such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters.
-6-
<PAGE> 7
(j) The execution, delivery and performance of this Agreement,
the Guarantee Agreement, the Indenture and the Junior Subordinated
Debentures, by the Company, the purchase of the Common Securities by
the Company from the Designated Trust, and the consummation by the
Company of the transactions herein (the "Company Transactions") will
not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party or by which the Company is
bound or to which any of the property or assets of the Company is
subject, nor will such Company Transactions result in any violation of
the provisions of the Articles of Incorporation, as amended, or the
By-Laws of the Company or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Company or any of its properties; and no consent, approval,
authorization, order, registration or qualification of or with any
court or governmental agency or body is required for the Company
Transactions except for such consents, approvals, authorizations,
registrations, or qualifications as may be required under the state
securities or Blue Sky laws in connection with the purchase and
distribution of the Designated Securities by the Underwriters.
(k) The Underwriting Agreement with respect to the Designated
Securities (incorporating the provisions hereof) has been duly
authorized, executed and delivered by the Company and the Designated
Trust;
(l) Other than as set forth in the Prospectus, there are no
legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or to which any property of the Company
or any of its subsidiaries is subject, involving potential losses with
a reasonably possible unfavorable final outcome against the Company or
any of its subsidiaries that is expected individually or in the
aggregate, to have a material adverse effect on the consolidated
financial position, shareholders' equity or results of operations of
the Company and its subsidiaries taken as a whole, and, to the best of
the Company's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(m) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and other) to own its properties and conduct its business as described
in the Prospectus, and is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended (the "BHC Act");
-7-
<PAGE> 8
(n) The Company has an authorized capitalization as set forth
in the Prospectus, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully
paid and non-assessable;
(o) Neither the Designated Trust nor the Company is, nor after
giving effect to the offering and sale of the Designated Securities
will either be, an "investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act");
(p) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree otherwise than
as set forth or contemplated in the Prospectus (exclusive of any
amendments or supplement thereto subsequent to the date of the
Agreement); and, since the date as of which information is given in the
Prospectus, there has not been any change in the consolidated
shareholders' equity (other than as a result of earnings to date and
issuances pursuant to the Company's dividend reinvestment plan or under
any employee stock or benefit plan, regular quarterly dividends, and
changes in net unrealized gains (losses) on securities available for
sale) or any material change in long-term debt of the Company and its
subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, or results of
operations of the Company and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Prospectus
(excluding any amendments or supplements thereto subsequent to the date
of this Agreement);
(q) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to
require the Company to include such securities with the securities
registered pursuant to the Registration Statement; and
(r) Each preliminary prospectus filed as part of the
registration statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the Securities Act,
complied when so filed in all material respects with the Securities Act
and the applicable rules and regulations of the Commission thereunder.
3. Public Offering. The Designated Trust and the Company are
advised by the Representative that the Underwriters propose to make a public
offering of
-8-
<PAGE> 9
their respective portions of the Designated Securities as soon after this
Agreement has been entered into as in the Representative's judgment is
advisable. The terms of the public offering of the Designated Securities are set
forth in the Prospectus.
4. Purchase and Delivery. Payment for the Designated
Securities shall be made to the Designated Trust in Federal or other funds
immediately available in New York City at the time and place set forth in the
Underwriting Agreement (the "Time of Delivery"), upon delivery to the
Representative for the respective accounts of the several Underwriters of the
Designated Securities registered in such names and in such denominations or
amounts, as the case may be, as the Representative shall request in writing not
less than one full business day prior to the date of the delivery.
5. Conditions to Closing. The obligations of the Underwriters
of any Designated Securities under the Underwriting Agreement relating to such
Designated Securities shall be subject, in the discretion of the
Representatives, to the condition that all representations and warranties and
other statements of the Designated Trust and the Company in or incorporated by
reference in the Underwriting Agreement relating to such Designated Securities
are, at the Time of Delivery for such Designated Securities, true and correct,
the condition that the Designated Trust and the Company shall have performed all
of their respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) No stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued under
the Securities Act and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for
additional information on the part of the Commission shall have been
complied with to the Representatives' reasonable satisfaction;
(b) If required under the Underwriting Agreement relating to
such Designated Securities, Sullivan & Cromwell, counsel for the
Underwriters, shall have furnished to the Representatives such opinion
or opinions, dated each Time of Delivery for such Designated
Securities, with respect to the incorporation of the Company, the
validity of the Designated Securities, the Subordinated Debentures, the
Guarantee, the Registration Statement, the Prospectus as amended or
supplemented and other related matters as the Representatives may
reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass
upon such matters; in rendering such opinion Sullivan & Cromwell may
rely as to the incorporation of the Company and all other matters of
Maryland law upon the opinion of Porter, Wright, Morris & Arthur
referred to in paragraph [__] hereof and as to all matters of Delaware
law upon the opinion of Richards, Layton & Finger, P.A. referred to in
paragraph [_] hereof;
-9-
<PAGE> 10
(c) With respect to the Designated Securities subsequent to
the execution and delivery of the Underwriting Agreement and prior to
the Closing Date:
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible change
that does not indicate the direction of the possible change,
in the rating accorded any of the securities of the Company or
any of its subsidiaries by any "nationally recognized
statistical rating organization," as such term is defined for
purposes of Rule 436(g)(2) under the Securities Act;
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a
whole, from that set forth in the Prospectus that, in your
judgment, is material and adverse and that makes it, in your
judgment, impracticable to market the Designated Securities on
the terms and in the manner contemplated in the Prospectus;
(d) Porter, Wright, Morris & Arthur, independent counsel to
the Company, shall have furnished to the Representatives their opinion
or opinions, dated each Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Maryland and the Company has the corporate power and
authority to own its properties and conduct its business as
described in the Prospectus as amended or supplemented
relating to the Designated Securities and is duly registered
as a bank holding company under the BHC Act;
(ii) The Huntington National Bank has been duly
organized, is validly existing as a national bank in good
standing under the laws of the United States, has the power
and authority to own its property and to conduct its business
as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or
leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
-10-
<PAGE> 11
(iii) The Company has an authorized capitalization as
set forth in the Prospectus as amended or supplemented thereto
relating to the Designated Securities; and all of the issued
shares of capital stock of The Huntington National Bank have
been duly and validly authorized and issued and are fully paid
and non-assessable (subject to the provisions of 12 U.S.C.
ss.55) and to the best knowledge of such counsel are
beneficially owned, directly or indirectly, by the Company,
subject to no security interest, other encumbrance or adverse
claim, except as otherwise stated in the Prospectus as amended
or supplemented relating to the Designated Securities;
(iv) The Company Agreements each have been duly
authorized, executed and delivered by the Company and
constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective
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; the Company Agreements conform
to the descriptions thereof in the Prospectus as amended or
supplemented; the Subordinated Debentures are entitled to the
benefits provided by the Indenture; and the Declaration, the
Indenture and the Guarantee have each been duly qualified
under the Trust Indenture Act;
(v) The Subordinated Debentures being issued at such
Time of Delivery have been duly authorized in conformity with
the terms of the Indenture, and when such Subordinated
Debentures have been duly executed, authenticated and issued
in conformity with the Indenture and delivered against payment
in accordance with the Underwriting Agreement with respect to
the Designated Securities they will constitute valid and
legally binding obligations of the Company enforceable in
accordance with their 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;
(vi) The Underwriting Agreement with respect to the
Designated Securities has been duly authorized, executed and
delivered by the Company;
(vii) The Designated Securities have been duly
authorized by the Company, as Sponsor, on behalf of the
Designated Trust;
(viii) The Trust is not an "investment company"
within the meaning of the Investment Company Act;
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<PAGE> 12
(ix) The execution, delivery and performance of this
Agreement and the Company Agreements by the Company and the
Designated Trust will not conflict with or result in a breach
or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument known
to such counsel to which the Company and the Designated Trust
is a party or by which the Company or the Designated Trust is
bound or to which any of the property or assets of the Company
or the Designated Trust is subject, nor will such action
result in any violation of the provisions of the Restatement
of Charter, as amended, of the Company or the By-Laws of the
Company or the Declaration of the Designated Trust or any
statute or any order, rule or regulation known to such counsel
of any court or governmental agency or body having
jurisdiction over the Company or any of its properties or the
Designated Trust or any of its property, except for such
violations and defaults as would not have a material adverse
effect on the financial position, results of operations,
business or prospects of the Company and its subsidiaries,
taken as a whole, or the Designated Trust and no consent,
approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is
required for the performance by the Company or the Designated
Trust of its obligations under this Agreement and the Company
Agreements, except such consents, approvals, authorizations,
registrations or qualifications as have been obtained or may
be required under state securities or Blue Sky laws in
connection with the offer and sale of the Designated
Securities;
(x) To the best of such counsel's knowledge and other
than as set forth in the Prospectus as amended or supplemented
thereto relating to the Designated Securities, there are no
legal or governmental proceedings pending to which the Company
or any of its subsidiaries is a party or to which any property
of the Company or any of its subsidiaries is subject,
involving potential losses with a reasonably possible
unfavorable final outcome against the Company or any of its
subsidiaries that is expected, individually or in the
aggregate, to have a material adverse effect on the
consolidated financial position, shareholders' equity or
results of operations of the Company and its subsidiaries
taken as a whole; and to the best of such counsel's knowledge,
no such proceedings are threatened or contemplated by
governmental authorities or threatened by others;
(xi) The statements set forth in the Prospectus under
the captions "Description of the Subordinated Debentures",
"Description of the Capital Securities", "Description of
Guarantees" and "Relationship Among the Capital Securities,
the Corresponding Subordinated Debentures, and the Guarantees"
and in the Prospectus as amended or supplemented under the
captions "Certain Terms of Series B Capital Securities" and
"Certain Terms of the Series B Subordinated Debentures",
insofar as they purport to constitute summaries of certain
terms of the Designated Securities, the Subordinated
Debentures or the Company
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<PAGE> 13
Agreements, in each case constitute accurate summaries of the
terms of the Company Agreements and of such securities, as set
forth in the Company Agreements, in all material respects;
(xii) Such counsel does not know of any contracts or
other documents required to be described or referred to in or
filed or incorporated by reference as an exhibit to the
Registration Statement or the Prospectus other than those
described or referred to therein or filed as an exhibit
thereto;
(xiii) Such counsel (A) is of the opinion that the
Registration Statement and Prospectus (except for financial
statements and schedules and other financial and statistical
data included therein as to which such counsel need not
express any opinion) comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder, (B) has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the
Registration Statement became effective contained any untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading and (C) has no reason to
believe that (except for financial statements and schedules
and other financial and statistical data as to which such
counsel need not express any belief) the Prospectus as of the
date hereof and of the time of delivery contains any untrue
statement of a material fact 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;
(e) Richards, Layton & Finger, P.A., special Delaware Counsel
to the Designated Trust and the Company, shall have furnished to the
Representatives, the Company and the Designated Trust such written
opinion or opinions, dated each Time of Delivery for such Designated
Securities, in form and substance satisfactory to you, to the effect
that:
(i) The Designated Trust has been duly created and is
validly existing in good standing as a business trust under
the Delaware Business Trust Act, and all filings required
under the laws of the State of Delaware with respect to the
creation and valid existence of the Designated Trust as a
business trust have been made;
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<PAGE> 14
(ii) Under the Delaware Business Trust Act and the
Declaration, the Designated Trust has the trust power and
authority to own property and conduct its business, all as
described in the Prospectus;
(iii) The Declaration constitutes a valid and legally
binding obligation of the Company and the Trustees, and is
enforceable against each of the Company and the Trustees, in
accordance with its terms, subject, as to enforcement, to (i)
bankruptcy, insolvency, moratorium, receivership,
reorganization, liquidation, fraudulent conveyance, fraudulent
transfer and other similar laws relating to or affecting the
rights and remedies of creditors generally, (ii) principles of
equity, including applicable law relating to fiduciary duties
(regardless of whether considered and applied in a proceeding
in equity or at law) and (iii) the effect of applicable public
policy on the enforceability of provisions relating to
indemnification or contribution and, once duly and validly
issued, the Designated Securities will entitle Securityholders
to benefits of the Declaration (subject to the terms of the
Declaration);
(iv) Under the Delaware Business Trust Act and the
Declaration, the Designated Trust has the trust power and
authority to (a) execute and deliver the Underwriting
Agreement relating to the Designated Securities (incorporating
by reference the provisions hereof) and perform its
obligations under such Underwriting Agreement; (b) issue and
perform its obligations under the Designated Securities and
the Common Securities; and (c) purchase the Junior
Subordinated Debentures;
(v) Under the Delaware Business Trust Act and the
Declaration, the execution and delivery by the Designated
Trust of the Underwriting Agreement relating to the Designated
Securities (incorporating by reference the provisions hereof),
and the performance by the Designated Trust of its obligations
thereunder, have been duly authorized by all necessary trust
action on the part of the Designated Trust;
(vi) The Designated Securities have been duly
authorized by the Declaration and are duly and validly issued
and, subject to the qualifications set forth herein, fully
paid and nonassessable beneficial interests in the Designated
Trust and are entitled to the benefits provided by the
Declaration; the Securityholders, as beneficial owners of the
Designated 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; provided that such
counsel may note that the Securityholders may be obligated,
pursuant to the Declaration, to (a) provide indemnity and/or
security in connection with
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<PAGE> 15
and pay taxes or governmental charges arising from transfers
or exchanges of certificates representing the Designated
Securities and the issuance of replacement certificates
representing the Designated Securities and (b) provide
security and indemnity in connection with requests of or
directions to the Property Trustee (as defined in the
Declaration) to exercise its rights and remedies under the
Declaration;
(vii) The Common Securities have been duly authorized
by the Declaration and are validly issued and represent
beneficial interests in the Designated Trust;
(viii) Under the Delaware Business Trust Act and the
Declaration, the issuance of the Designated Securities and the
Common Securities is not subject to preemptive rights;
(ix) The issuance and sale by the Designated Trust of
Designated Securities and the Common Securities, the execution
and delivery of the Underwriting Agreement (incorporating by
reference the provisions hereof) with respect to the
Designated Securities and the performance by the Designated
Trust of such Underwriting Agreement, the consummation by the
Designated Trust of the transactions contemplated thereby and
the compliance by the Designated Trust with its obligations
thereunder will not violate (a) any of the provisions of the
Certificate of Trust of the Designated Trust or the
Declaration, or (b) any applicable Delaware law or
administrative regulation;
(x) The issuance, sale and delivery by the Trust of
the Designated Securities, the execution, delivery and
performance by the Trust of the Underwriting Agreement, the
purchase by the Trust of the Debentures to be purchased by it
and the performance by the Trust of its obligations under the
Declaration, the Underwriting Agreement and the Designated
Securities do not result in a violation of the Declaration,
the Certificate or any Delaware law (statutory or decisional)
or Delaware regulation. No authorization, approval, consent or
order of any Delaware court or any Delaware governmental
authority or Delaware agency is required to be obtained by the
Trust solely in connection with the issuance and sale of the
Trust Securities. After due inquiry on ___________, 1998,
limited to, and solely to the extent disclosed thereupon,
court dockets for active cases in the Court of Chancery of the
State of Delaware in and for New Castle County, Delaware, of
the Superior Court of the State of Delaware in and for New
Castle County, Delaware, and of the United States District
Court sitting in the State of Delaware, we are not aware of
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<PAGE> 16
any legal or governmental proceeding pending against the
Designated Trust.
(xi) Assuming that the Designated Trust derives no
income from or connected with sources within the State of
Delaware and has no assets, activities (other than maintaining
the Delaware Trustee and the filing of documents with the
Secretary of State of the State of Delaware) or employees in
the State of Delaware, no authorization, approval, consent or
order of any Delaware court or governmental authority or
agency is required to be obtained by the Designated Trust
solely in connection with the issuance and sale of the
Designated Securities and the Common Securities. In rendering
the opinion expressed in this paragraph (x), such counsel need
express no opinion concerning the securities laws of the State
of Delaware; and
(xii) Assuming that the Designated Trust derives no
income from or connected with services provided within the
State of Delaware and has no assets, activities (other than
maintaining the Delaware Trustee and the filing of documents
with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, the Securityholders (other
than those holders of the Designated Securities who reside or
are domiciled in the State of Delaware) will have no liability
for income taxes imposed by the State of Delaware solely as a
result of their participation in the Designated Trust, and the
Designated Trust will not be liable for any income tax imposed
by the State of Delaware;
(f) Porter, Wright, Morris & Arthur, tax counsel for the
Designated Trust and the Company, shall have furnished to you their
written opinion, dated the respective Time of Delivery, in form and
substance satisfactory to you, to the effect that such firm confirms
its opinion set forth in the Prospectus as amended or supplemented
under the caption "Certain United States Federal Income Tax
Consequences";
(g) The Representatives shall have received, on each of the
date hereof and the Time of Delivery, letters dated the date hereof and
the Time of Delivery, as the case may be, in form and substance
satisfactory to the Representatives, from Ernst & Young LLP,
independent public accountants, and BDO Seidman, LLP, independent
public accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus;
provided that the letter delivered on the Time of Delivery shall use a
"cut-off date" not earlier than the date hereof;
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<PAGE> 17
(h) Since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus as amended and
supplemented with respect to the Designated Securities there shall not
have been any change in the capital stock or long-term debt of the
Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs,
management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set
forth or contemplated in the Prospectus as so amended and supplemented,
the effect of which is in the Representatives' judgment after
consultation with the Company so material and adverse as to make it
impractical or inadvisable to proceed with the public offering of the
Designated Securities on the terms and in the manner contemplated in
the Prospectus as so amended and supplemented;
(i) On or after the date of the Underwriting Agreement
relating to the Designated Securities, there shall not have occurred
any of the following: (i) a suspension or material limitation in
trading in securities generally on the Nasdaq National Market; (ii) a
general moratorium on commercial banking activities declared by either
Federal or Ohio state authorities; or (iii) the outbreak or escalation
of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such
event specified in this subsection (j) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with
the public offering or the delivery of the Designated Securities
on the terms and in the manner contemplated in the Prospectus relating
to the Designated Securities; and
(j) The Designated Trust and the Company shall have furnished
or caused to be furnished to the Representatives at each Time of
Delivery for the Designated Securities certificates of officers of the
Designated Trust and the Company satisfactory to the Representatives as
to the accuracy of the representations and warranties of the Designated
Trust and the Company herein at and as of such Time of Delivery, as to
the performance by each of the Designated Trust and the Company of all
of its obligations hereunder to be performed at or prior to such Time
of Delivery, as to the matters set forth in subsections (a) and (c) of
this Section and as to such other matters as the Representatives may
reasonably request.
6. Reimbursements by the Company. The Company covenants and
agrees with the several Underwriters that the Company will pay or cause to be
paid the following: (i) the fees, disbursements and expenses of the Trusts' and
the Company's counsel and accountants in connection with the registration of the
capital securities of the Trusts and the guarantees and junior subordinated
debentures of the Company under the Securities Act and all other fees or
expenses in connection with the preparation, printing and filing of the
Registration Statement, any Preliminary Prospectus and the
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<PAGE> 18
Prospectus and amendments and supplements thereto and the reasonable mailing and
delivering of copies thereof to the Underwriters and dealers in the reasonable
quantities hereinabove specified; (ii) the cost of printing or producing any
Agreement among Underwriters, these standard provisions, the Underwriting
Agreement, the Declaration, the Indenture, the Guarantee, any Blue Sky or
similar investment surveys or memoranda, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Designated Securities; (iii) all expenses in
connection with the qualification of the Designated Securities, the Guarantee
and the Subordinated Debentures for offering and sale under state securities
laws as provided in Section 5(b) hereof, including the fees and disbursements of
counsel for the Underwriters in connection with such qualification and in
connection with the Blue Sky and Legal Investment surveys; (iv) any fees charged
by securities rating services for rating the Designated Securities and the
Subordinated Debentures; (v) the cost of preparing the Designated Securities and
the Subordinated Debentures; (vi) the fees and expenses of any Trustee,
Debenture Trustee and Guarantee Trustee, and any agent of any trustee and the
fees and disbursements of counsel for any trustee in connection with the
Declaration, the Indenture, the Guarantee and the Designated Securities; (vii)
the cost of qualifying the Designated Securities with The Depository Trust
Company; (viii) fees and expenses in connection with listing the Designated
Securities (and the Subordinated Debentures, if necessary) on the Nasdaq
National Market or such other exchange or market and the cost of registering the
Designated Securities (and the Subordinated Debentures, if necessary) under
Section 12 of the Exchange Act in the event the Designated Securities are listed
on an exchange or market; and (ix) the costs and expenses of the Company
relating to investor presentations on any "road show" undertaken in connection
with the marketing of the offering of the Designated Securities, including,
without limitation, expenses associated with the production of road show slides
and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations with the prior approval of the Company, travel and
lodging expenses of the representatives and officers of the Company and any such
consultants, and the cost of any aircraft chartered in connection with the road
show. It is understood, however, that, except as provided in this Section 6,
Section 7 and Section 10 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees and disbursements of their counsel,
transfer taxes on resale of any of the Designated Securities by them, and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution.
(a) The Company and the Designated Trust will, jointly and
severally indemnify and hold harmless each Underwriter, and each
person, if any, who controls any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act, or is under common control with, or is controlled by, such
Underwriter, from and against any and all losses, claims,
damages and liabilities (including, without limitation, any legal or
other expenses
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<PAGE> 19
reasonably incurred in connection with defending or investigating any
such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement,
any amendment thereof, any preliminary prospectus or the Prospectus (as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are
caused by any such untrue statement or omission or alleged untrue
statement or omission based upon information relating to any
Underwriter furnished to the Company in writing by or on behalf of an
Underwriter through you expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Designated Trust, the Trustees, the
Administrator, the Company, its directors, its officers, and each
person, if any, who controls the Designated Trust or the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the
Designated Trust or the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the
Designated Trust or the Company in writing by an Underwriter through
you expressly for use in the Registration Statement and the Prospectus
or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph 7(a) or 7(b)
above, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the
fees and expenses of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to retain
its own counsel, but the fees and expenses of such counsel shall be at
the expense of such indemnified party unless (i) the indemnifying party
and the indemnified party shall have mutually agreed to the retention
of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the
same counsel would be inappropriate, in the reasonable judgement of the
indemnified party, because of actual or potential differing interests
between them. It is understood that the indemnifying party shall not,
in respect of the legal expenses of any indemnified party in connection
with any proceeding or related
proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in
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<PAGE> 20
addition to any local counsel) for (i) all Underwriters and all
persons, if any, who control any Underwriter within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange
Act and (ii) the Designated Trust, the Trustees, the Company, its
directors, its officers and each person, if any, who controls the
Designated Trust or the Company with the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act, and that all
such fees and expenses shall be reimbursed as they are incurred. In the
case of any such separate firm for the Underwriters and such control
persons of the Underwriters, such firm shall be designated in writing
by the Representatives. In the case of any such separate firm for the
Designated Trust or the Company, and such directors, trustees, officers
and control persons of the Designated Trust or the Company, such firm
shall be designated in writing by the Designated Trust or the Company.
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.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel as contemplated by
the second and third sentences of this paragraph, the indemnifying
party agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement
is entered into more than 30 days after receipt by such indemnifying
party of the aforesaid request and (ii) such indemnifying party shall
not have reimbursed the indemnified party in accordance with such
request prior to the date of such settlement. No indemnifying party
shall, without the prior written consent of the indemnified party,
effect any settlement of any pending or threatened proceeding in
respect of which any indemnified party is or could have been a party
and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such proceeding.
(d) To the extent the indemnification provided for in
paragraph 7(a) or 7(b) is unavailable to an indemnified party or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party under such paragraph,
in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits received
by the indemnifying party or parties on the one hand and the
indemnified party or parties on the other hand from the offering of the
Designated Securities or (ii) if the allocation provided by clause
7(d)(i) above is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to
in clause 7(d)(i) above but also the relative fault of the
indemnifying party or parties on the one hand and of the
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<PAGE> 21
indemnified party or parties on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Designated Trust or the Company
on the one hand and the Underwriters on the other hand in connection
with the offering of the Designated Securities shall be deemed to be in
the same respective proportions as the net proceeds from the offering
of such received by the Underwriters in respect thereof, in each case
as set forth in the Prospectus, bear to the aggregate offering price of
such. The relative fault of the Designated Trust or the Company on the
one hand and of the Underwriters on the other hand shall be determined
by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Designated Trust or the Company or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are
several in proportion to the respective number of Designated Securities
they have purchased hereunder, not joint.
(e) The Company, the Designated Trust and the Underwriters
agree that it would not be just or equitable if contribution pursuant
to this Section 7 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 that does not take account of the equitable
considerations referred to in paragraph (d) of this Section 7. The
amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7,
no Underwriter shall be required to contribute any amount in excess of
the amount by which the total price at which the Designated Securities
underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has
otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution provisions contained in
this Section 7 and the representations, warranties and other statements
of the Designated Trust or the Company contained in this Agreement
shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling such Underwriter or
by or on behalf of the Designated Trust or the Company, its
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<PAGE> 22
officers, trustees or directors or any person controlling the
Designated Trust or the Company and (iii) acceptance of and payment for
any of the Designated Securities. The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any indemnified party at law or in
equity.
8. Defaulting Underwriters. If, at the Time of Delivery, any
one or more of the Underwriters shall fail or refuse to purchase Designated
Securities that it has or they have agreed to purchase hereunder on such date,
and the aggregate principal amount of Designated Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Designated
Securities to be purchased on such date, the other Underwriters shall be
obligated severally in the proportions that the number of Designated Securities
set forth opposite their respective names in the Underwriting Agreement bears to
the aggregate liquidation amount of Designated Securities set forth opposite the
names of all such non-defaulting Underwriters, or in such other proportions as
the Representative may specify, to purchase the Designated Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date; provided that in no event shall the liquidation amount of
Designated Securities that any Underwriter has agreed to purchase pursuant to
this Agreement be increased pursuant to this Section 8 by an amount in excess of
one-ninth of such principal amount of Designated Securities without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Designated Securities and the
aggregate number of Designated Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Designated
Securities to be purchased, and arrangements satisfactory to the Representative
and the Designated Trust and the Company for the purchase of such Designated
Securities are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either the Representative or the Designated Trust and
Company shall have the right to postpone the Closing Date, but in no event for
longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
9. Covenants. Each of the Designated Trust and the Company,
jointly and severally, agrees with each of the Underwriters of any Designated
Securities:
(a) To file the Prospectus as amended or supplemented with
respect to the Designated Securities with the Commission; to file
promptly all reports and any definitive proxy or information statements
required to be filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the
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<PAGE> 23
Exchange Act for so long as the delivery of a prospectus is required in
connection with the offering or sale of such Designated Securities; to
advise the Representatives, promptly after it receives notice thereof,
of the issuance by the Commission of any stop order or of any order
preventing or suspending the use of any prospectus relating to the
Designated Securities, of the suspension of the qualification of such
Designated Securities or the Subordinated Debentures issuable upon
termination of the Designated Trust for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for
any such purpose, or of any request by the Commission for the amending
or supplementing of the Registration Statement or Prospectus or for
additional information; and, in the event of the issuance of any such
stop order or of any such order preventing or suspending the use of any
prospectus relating to the Designated Securities or suspending any such
qualification, promptly to use its best efforts to obtain the
withdrawal of such order;
(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Designated
Securities or the Subordinated Debentures issuable upon termination of
the Designated Trust for offering and sale under the securities laws of
such jurisdictions as the Representatives may request and to comply
with such laws so as to permit the continuance of sales and dealings
therein in such jurisdictions for as long as may be necessary to
complete the distribution of such Designated Securities, provided that
in connection therewith neither the Designated Trust nor the Company
shall be required to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction;
(c) To furnish to the Underwriters, without charge, such
number of signed copies of the Registration Statement (including
exhibits thereto) as the Underwriters may reasonably request and for
delivery to each other Underwriter a conformed copy of the Registration
Statement (without exhibits thereto) and to furnish to you in New York
City, without charge, prior to 10:00 a.m. New York City time on the
business day next succeeding the date of this Agreement and during the
period mentioned in Section 9(e) below, as many copies of the
Prospectus and any supplements and amendments thereto or to the
Registration Statement as you may reasonably request;
(d) Before amending or supplementing the Registration
Statement or the Prospectus, to furnish to you a copy of each such
proposed amendment or supplement and not to file any such proposed
amendment or supplement to which you reasonably object, and to file
with the Commission within the applicable period specified in Rule
424(b) under the Securities Act any prospectus required to be filed
pursuant to such Rule;
-23-
<PAGE> 24
(e) If, during such period after the first date of the public
offering of the Designated Securities as in the opinion of counsel for
the Underwriters the Prospectus is required by law to be delivered in
connection with sales by an Underwriter or dealer, any event shall
occur or condition exist as a result of which it is necessary to amend
or supplement the Prospectus in order to make the statements therein,
in the light of the circumstances when the Prospectus is delivered to a
purchaser, not misleading, or if, in the opinion of counsel for the
Underwriters, it is necessary to amend or supplement the Prospectus to
comply with applicable law, forthwith to prepare, file with the
Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company)
to which Designated Securities may have been sold by you on behalf of
the Underwriters and to any other dealers upon request, 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 when the Prospectus is delivered to a purchaser, be
misleading or so that the Prospectus, as amended or supplemented, will
comply with law;
(f) To endeavor to qualify the Designated Securities for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
you shall reasonably request;
(g) In the case of the Company, to make generally available to
its security holders as soon as practicable, but in any event not later
than eighteen months after the effective date of the Registration
Statement (as defined in Rule 158(c) under the Securities Act), an
earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Securities Act and the
rules and regulations of the Commission thereunder (including, at the
option of the Company, Rule 158);
(h) During the period beginning from the date of the
Underwriting Agreement for such Designated Securities and continuing to
and including the earlier of (i) the termination of trading
restrictions for such Designated Securities, as notified to the Company
by the Representatives and (ii) the Time of Delivery for such
Designated Securities, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder, any capital
securities in any of the Trusts, any other beneficial interests in the
assets of the Designated Trust or any other Trust, or any capital
securities or any other securities of the Designated Trust or the
Company, as the case may be, that are substantially similar to such
Designated Securities (including any guarantee of such securities) or
any securities that are convertible into or exchangeable for, or that
represent the right to receive securities, capital securities or any
such substantially similar securities of either the Designated Trust,
any other Trust or the Company that are subordinated to the
-24-
<PAGE> 25
Senior Indebtedness (as defined in the Indenture) of the Company in a
manner substantially similar to the subordination of the Subordinated
Debentures without the prior written consent of the Representatives;
(i) In the case of the Company, to issue the Guarantee
concurrently with the issue and sale of the Designated Securities as
contemplated in the Underwriting Agreement with respect to the
Designated Securities and in the Prospectus Supplement as amended and
supplemented with respect to the Designated Securities;
(j) To furnish to the holders of the Designated Securities as
soon as practicable after the end of each fiscal year an annual report
(including a balance sheet and statements of income, shareholders'
equity and cash flow of the Company and its consolidated subsidiaries
certified by independent public accountants); and
(k) If the Company and the Designated Trust elect to rely upon
Rule 462(b), the Company and the Designated Trust shall file a Rule
462(b) Registration Statement with the Commission in compliance with
Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of the
Underwriting Agreement with respect to the Designated Securities, and
the Company and the Designated Trust shall at the time of filing either
pay to the Commission the filing fee for the Rule 462(b) Registration
Statement or give irrevocable instructions for the payment of such fee
pursuant to Rule 111(b) under the Securities Act.
10. Survival of Representations, Warranties and Covenants. The
respective indemnities, agreements, representations, warranties and other
statements of the Designated Trust, the Company and the several Underwriters, as
set forth herein or made by or on behalf of them, respectively, pursuant hereto,
shall remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Designated Trust, the Company,
or any officer or director or Trustee or controlling person of the Designated
Trust or the Company, and shall survive delivery of and payment for the
Designated Securities.
11. Expenses. If this Agreement shall be terminated by the
Underwriters, or any of them, because of any failure or refusal on the part of
the Company to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Underwriters or
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.
-25-
<PAGE> 26
12. Representative; Notices. In all dealings hereunder, the
Representatives of the Underwriters of Designated Securities shall act on behalf
of each of such Underwriters, and the parties hereto shall be entitled to act
and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by such Representatives jointly or by such of the
Representatives, if any, as may be designated for such purpose in the
Underwriting Agreement.
All statements, requests, notices and agreements hereunder
shall be in writing, and if to the Underwriters shall be delivered or sent by
mail, telex or facsimile transmission to the address of the Representatives as
set forth in the Underwriting Agreement; and if to the Designated Trust or the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Designated Trust or the Company, as the case may be, set
forth in the Registration Statement, Attention: Secretary. Any such statements,
requests, notices or agreements shall take effect upon receipt thereof.
13. Binding Effect. Each Underwriting Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the
Designated Trust and the Company and, to the extent provided in Section 7 and
Section 10 hereof, the officers and directors of the Designated Trust or the
Company and each person who controls the Designated Trust, the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of any such Underwriting Agreement. No purchaser of any of the Designated
Securities from any Underwriter shall be deemed a successor or assign by reason
merely of such purchase.
14. Timeliness. Time shall be of the essence of each
Underwriting Agreement. As used herein, the term "business day" shall mean any
day when the Commission's office in Washington, D.C. is open for business.
15. Applicable Law. EACH UNDERWRITING AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
16. Counterparts. Each Underwriting Agreement may be executed
by any one or more of the parties thereto in any number of counterparts, each of
which shall be deemed to be an original, but all such respective counterparts
shall together constitute one and the same instrument.
-26-
<PAGE> 27
Very truly yours,
HUNTINGTON BANCSHARES
INCORPORATED
By:
------------------------------------
Name:
Title:
HUNTINGTON CAPITAL
By:
------------------------------------
Name:
Title: Regular Trustee
Accepted as of the date hereof:
[Name(s) of Representative(s)]
As Representatives of the Underwriters
Named in Schedule I hereto
- ------------------------------------
By:
---------------------------------
Name:
Title:
On behalf of each of the Underwriters
named on Schedule I hereto
-27-
<PAGE> 28
Underwriting Agreement
To the Underwriters named in
Schedule I hereto
c/o [Names and Addresses of Representatives]
-------- ---, ----
Dear Sirs:
Huntington Capital __________, a statutory business trust formed under
the laws of the State of Delaware (the "Designated Trust"), and Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), propose,
subject to the terms and conditions stated herein and in the Underwriting
Agreement Standard Provisions (June __, 1998) (the "Standard Provisions"), to
issue and sell to the Underwriters named in Schedule I hereto (the
"Underwriters") the preferred securities of the Designated Trust specified in
Schedule II hereto. The Designated Securities the Underwriters may elect to
purchase are herein referred to as the "Designated Securities." Each of the
provisions of the Standard Provisions is incorporated herein by reference in its
entirety, and shall be deemed to be a part of this Underwriting Agreement to the
same extent as if such provisions had been set forth in full herein; and each of
the representations and warranties set forth therein shall be deemed to have
been made at and as of the date of this Underwriting Agreement. Each reference
to the Representatives herein and in the provisions of the Standard Provisions
so incorporated by reference shall be deemed to refer to you. Unless otherwise
defined herein, terms defined in the Standard Provisions are used herein as
therein defined. The Representatives designated to act on behalf of the
Representatives and on behalf of each of the Underwriters of the Designated
Securities pursuant to Section 12 of the Standard Provisions and the address of
the Representatives referred to in such Section 12 are set forth at the end of
Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Standard Provisions incorporated herein by reference, (a) the Designated Trust
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Designated
Trust, at the time and place and at the purchase price to the
<PAGE> 29
Underwriters set forth in Schedule II hereto, the number of Designated
Securities set forth opposite the name of such Underwriter in Schedule I hereto.
If the foregoing is in accordance with your understanding, please sign
and return to us [ten] counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Standard Provisions incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Designated Trust and the Company. It is understood that your
acceptance of this letter on behalf of each of the Underwriters is or will be
pursuant to the authority set forth in a form of Agreement among Underwriters,
the form of which shall be submitted to the Company for examination upon
request, but without warranty on the part of the Representatives as to the
authority of the signers thereof.
-2-
<PAGE> 30
Very truly yours,
HUNTINGTON BANCSHARES
INCORPORATED
By:
----------------------------------
Name:
Title:
HUNTINGTON CAPITAL
By: Huntington Bancshares
Incorporated, as Sponsor
By:
----------------------------------
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
As Representatives of the Underwriters
Named in Schedule I hereto
- ------------------------------------
By:
---------------------------------
Name:
Title:
On behalf of each of the Underwriters
named on Schedule I hereto
-3-
<PAGE> 31
SCHEDULE I
(TO UNDERWRITING AGREEMENT)
Number of
Designated
Securities to
be Purchased
-------------------
Underwriter
- ---------------
[Names of Representatives]..........................
[Name of Underwriters]..............................
Total
------------------------------
==============================
<PAGE> 32
SCHEDULE II
(TO PRICING AGREEMENT)
DESIGNATED TRUST:
Huntington Capital __________
TITLE OF DESIGNATED SECURITIES:
_____% ________________________ Securities, Series ____
AGGREGATE PRINCIPAL AMOUNT:
[Aggregate liquidation amount] [Number] of Designated Securities:
[$] _____________
INITIAL OFFERING PRICE TO PUBLIC
[$ _____ per Designated Security] [_____% of the principal amount of
the Designated Securities]
PURCHASE PRICE BY UNDERWRITERS:
[$ _____ per Designated Security][_____% of the principal amount of the
Designated Securities]
UNDERWRITERS' COMPENSATION:
$____ per Designated Security
FORM OF DESIGNATED SHARES:
Book-entry only form represented by one or more global securities
deposited with The Depository Trust Company ("DTC") or its designated custodian,
to be made available for checking by the Representatives at least twenty-four
hours prior to the Time of Delivery at the office of DTC.
ACCOUNT FOR PAYMENT OF PURCHASE PRICE:
- -------------------------------------
<PAGE> 33
Declaration:
Amended and Restated Declaration dated _______________, between the
Company and the Trustees named therein.
GUARANTEE:
Guarantee Agreement, dated as of ___________________, between Company,
as guarantor, and Guarantee Trustee.
SUBORDINATED DEBENTURES:
_____% Junior Subordinated Debentures, Series _____
MATURITY:
INTEREST RATE: [Insert Float Rate Terms, if applicable.]
_____%
INTEREST PAYMENT DATES:
EXTENSION PERIOD:
[10 semi-annual periods]
REDEMPTION PROVISIONS:
SINKING FUND PROVISIONS:
No sinking fund provisions.
[LISTING:
The Company and the Designated Trust shall each use its best efforts to
list, subject to notice of issuance, the Designated Securities on the
______________ and, if the Corporation elects to terminate the Designated Trust
and to distribute the Subordinated Debentures to the holders of the Designated
Securities in liquidation of the Designated
-2-
<PAGE> 34
Trust, to use its best efforts to list the Subordinated Debentures, subject to
notice of issuance, on the ___________________, prior to such distribution.]
[ACCOUNTANTS LETTERS AND LEGAL OPINIONS:
At each Time of Delivery, [insert relevant provisions, if required]
TIME OF DELIVERY:
9:00 a.m., New York City time _______ __, ____
NAMES OF UNDERWRITERS AND NUMBER OF DESIGNATED SECURITIES TO
BE PURCHASED:
As described on Schedule I hereto.
CLOSING LOCATION:
[Sullivan & Cromwell
125 Broad Street
New York, New York]
NAMES AND ADDRESSES OF REPRESENTATIVES:
-3-
<PAGE> 1
Exhibit 4(k)
HUNTINGTON BANCSHARES INCORPORATED
TO
THE CHASE MANHATTAN BANK
a New York banking corporation, as Trustee
FORM OF
INDENTURE
Dated as of June 4, 1998
Junior Subordinated Debentures
<PAGE> 2
HUNTINGTON BANCSHARES INCORPORATED
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317,
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1980, are a part of and govern the Indenture whether
or not physically contained therein) and the Junior Subordinated Indenture,
dated as of June 4, 1998.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
----------- -------
<S> <C>
ss. 310 (a)(1), (2) and (5)...............................................609
(a)(3)...............................................Not Applicable
(a)(4)...............................................Not Applicable
(b).............................................................608
............................................................610
(c)..................................................Not Applicable
ss. 311 (a).............................................................613
(b).............................................................613
(b)(2).......................................................703(a)
ss. 312 (a).............................................................701
.........................................................702(a)
(b)..........................................................702(b)
(c)..........................................................702(c)
ss. 313 (a)..........................................................703(a)
(b)..........................................................703(b)
(c).......................................................703(a)(b)
(d)..........................................................703(c)
ss. 314 (a)(1), (2) and (3).............................................704
(a)(4).........................................................1004
(b)..................................................Not Applicable
(c)(1)..........................................................102
(c)(2)..........................................................102
(c)(3)...............................................Not Applicable
(d)..................................................Not Applicable
(e).............................................................102
(f)..................................................Not Applicable
ss. 315 (a).............................................................601
(b).............................................................602
................................................................703
(c).............................................................601
(d).............................................................601
(d)(1)..........................................................601
(d)(2)..........................................................601
(d)(3)..........................................................601
(e).............................................................514
ss. 316 (a).............................................................101
(a)(1)(A).......................................................512
(a)(1)(B).......................................................513
(a)(2)...............................................Not Applicable
(b).............................................................508
(c)..........................................................104(c)
ss. 317 (a)(1)..........................................................503
(a)(2)..........................................................504
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C>
(b)...........................................................1003
ss. 318 (a)............................................................107
</TABLE>
Note: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Junior Subordinated Indenture.
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
<S> <C>
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION .............................1
SECTION 101. Definitions.................................................................... 2
Act ...................................................................................... 2
Additional Interest ..................................................................... 2
Additional Sums ......................................................................... 2
Affiliate ............................................................................... 2
Authenticating Agent .................................................................... 2
Board of Directors ...................................................................... 2
Board Resolution ........................................................................ 2
Business Day ............................................................................ 2
Capital Securities ...................................................................... 2
Capital I Securities .................................................................... 2
Commission .............................................................................. 2
Common Securities ....................................................................... 2
Company ................................................................................. 2
Company Request ......................................................................... 2
Company Order ........................................................................... 2
Corporate Trust Office .................................................................. 2
Covenant Defeasance ..................................................................... 2
Custodian ............................................................................... 3
Declaration ............................................................................. 3
Defaulted Interest ...................................................................... 3
Depositary .............................................................................. 3
Distributions ........................................................................... 3
Dollar or $ ............................................................................. 3
Event of Default ........................................................................ 3
Exchange Act ............................................................................ 3
Extension Period ........................................................................ 3
Federal Reserve ......................................................................... 3
Global Security ......................................................................... 3
Guarantee ............................................................................... 3
Holder.................................................................................. 3
Indenture ............................................................................... 3
Interest Payment Date ................................................................... 3
Investment Company Event ................................................................ 3
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
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<S> <C>
Junior Subordinated Securities ................................................................. 3
Legal Defeasance ............................................................................... 4
Maturity ....................................................................................... 4
Officers' Certificate .......................................................................... 4
Opinion of Counsel ............................................................................. 4
Original Issue Date ............................................................................ 4
Outstanding .................................................................................... 4
Paying Agent ................................................................................... 4
Person ......................................................................................... 5
Predecessor Security ........................................................................... 5
Property Trustee ............................................................................... 5
Redemption Date................................................................................. 5
Redemption Price ............................................................................... 5
Regular Record Date ............................................................................ 5
Regulatory Capital Event ....................................................................... 5
Responsible Officer ............................................................................ 5
Securities ..................................................................................... 5
Securities Act ................................................................................. 5
Security Register .............................................................................. 5
Security Registrar ............................................................................. 5
Senior Indebtedness ............................................................................ 5
Special Event .................................................................................. 6
Special Record Date ............................................................................ 6
Stated Maturity ................................................................................ 6
Subsidiary ..................................................................................... 6
Tax Event ...................................................................................... 6
Trust........................................................................................... 6
Trustee ........................................................................................ 6
Trust Indenture Act ............................................................................ 6
U.S. Government Obligations .................................................................... 7
Vice President ................................................................................. 7
SECTION 102. Compliance Certificates and Opinions; Officers' Certificate of
Evidence............................................................................... 7
SECTION 103. Form of Documents Delivered to Trustee..................................................... 7
SECTION 104. Acts of Holders; Record Dates.............................................................. 7
SECTION 105. Notices, Etc. to Trustee and the Company................................................... 8
SECTION 106. Notice to Holders; Waiver.................................................................. 8
SECTION 107. Conflict With Trust Indenture Act.......................................................... 9
SECTION 108. Effect of Headings and Table of Contents................................................... 9
SECTION 109. Separability Clause ....................................................................... 9
SECTION 110. Benefits of Indenture...................................................................... 9
SECTION 111. GOVERNING LAW ............................................................................. 9
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 112. Legal Holidays .............................................. 9
ARTICLE TWO
SECURITY FORMS ................................................ 10
ARTICLE THREE
THE SECURITIES ................................................ 10
SECTION 301. Title and Terms ............................................. 10
SECTION 302. Denominations ............................................... 13
SECTION 303. Execution, Authentication, Delivery and Dating............... 13
SECTION 304. Temporary Securities......................................... 14
SECTION 305. Registration; Registration of Transfer and Exchange.......... 14
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities............. 15
SECTION 307. Payment of Interest; Interest Rights Preserved............... 15
SECTION 308. Persons Deemed Owners......................................... 16
SECTION 309. Cancellation ................................................ 17
SECTION 310. Computation of Interest...................................... 17
SECTION 311. Right of Set-off ............................................ 17
SECTION 312. CUSIP Numbers ............................................... 18
SECTION 313. Global Securities ........................................... 18
SECTION 314. Special Transfer Provisions ................................. 18
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE....................... 19
SECTION 401. Satisfaction and Discharge of Indenture...................... 19
SECTION 402. Legal Defeasance ............................................ 20
SECTION 403. Covenant Defeasance.......................................... 20
SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance ....... 21
SECTION 405. Application of Trust Money .................................. 21
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
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<S> <C>
SECTION 406. Indemnity for U.S. Government Obligations .................................. 22
ARTICLE FIVE
REMEDIES .................................................................. 22
SECTION 501. Events of Default .......................................................... 22
SECTION 502. Acceleration of Maturity; Rescission and Annulment ......................... 23
SECTION 503. Collection of Senior Indebtedness and Suits for Enforcement by Trustee ..... 23
SECTION 504. Trustee may File Proofs of Claim ........................................... 24
SECTION 505. Trustee may Enforce Claims Without Possession of Securities ............... 24
SECTION 506. Application of Money Collected ............................................ 24
SECTION 507. Limitation on Suits ........................................................ 24
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest;
Capital Security Holders' Rights ......................................... 25
SECTION 509. Restoration of Rights and Remedies ......................................... 25
SECTION 510. Rights and Remedies Cumulative ............................................. 25
SECTION 511. Delay or Omission not Waiver ............................................... 26
SECTION 512. Control by Holders ......................................................... 26
SECTION 513. Waiver of Past Defaults .................................................... 26
SECTION 514. Undertaking for Costs ...................................................... 26
SECTION 515. Waiver of Stay or Extension Laws ........................................... 27
ARTICLE SIX
TRUSTEE .................................................................. 27
SECTION 601. Certain Duties and Responsibilities ........................................ 27
SECTION 602. Notice of Defaults ......................................................... 27
SECTION 603. Certain Rights of Trustee .................................................. 27
SECTION 604. Not Responsible for Recitals or Issuance of Securities ..................... 28
SECTION 605. Trustee and Other Agents may Hold Securities ............................... 29
</TABLE>
v
<PAGE> 7
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 606. Money Held in Trust.. ......................................................29
SECTION 607. Compensation; Reimbursement; and Indemnity................................. 29
SECTION 608. Disqualification; Conflicting Interests ................................... 29
SECTION 609. Corporate Trustee Required; Eligibility.................................... 30
SECTION 610. Resignation and Removal; Appointment of Successor ......................... 30
SECTION 611. Acceptance of Appointment by Successor..................................... 31
SECTION 612. Merger, Conversion, Consolidation or Succession to Business................ 32
SECTION 613. Preferential Collection of Claims Against Company.......................... 32
SECTION 614. Appointment of Authenticating Agent ....................................... 32
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY ............................... 33
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders ................. 33
SECTION 702. Preservation of Information; Communications to Holders .................... 34
SECTION 703. Reports by Trustee......................................................... 34
SECTION 704. Reports by Company......................................................... 34
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ........................... 34
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms ..................... 34
SECTION 802. Successor Person Substituted ............................................. 35
ARTICLE NINE
SUPPLEMENTAL INDENTURES.......................................................... 35
SECTION 901. Supplemental Indentures Without Consent of Holders......................... 35
SECTION 902. Supplemental Indentures With Consent of Holders............................ 36
SECTION 903. Execution of Supplemental Indentures....................................... 37
SECTION 904. Effect of Supplemental Indentures.......................................... 37
SECTION 905. Conformity With Trust Indenture Act........................................ 37
</TABLE>
vi
<PAGE> 8
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 906. Reference in Securities to Supplemental Indentures ........................ 37
ARTICLE TEN
COVENANTS................................................................. 37
SECTION 1001. Payment of Principal and Interest ........................................ 37
SECTION 1002. Maintenance of Office or Agency........................................... 38
SECTION 1003. Money for Security Payments to be Held in Trust........................... 38
SECTION 1004. Statements by Officers as to Default...................................... 39
SECTION 1005. Existence................................................................. 39
SECTION 1006. Maintenance of Properties................................................. 39
SECTION 1007. Payment of Taxes and Other Claims......................................... 39
SECTION 1008. Waiver of Certain Covenants.............................................. 39
SECTION 1009. Payment of the Trust's Costs and Expenses................................ 40
SECTION 1010. Restrictions on Payments and Distributions............................... 40
SECTION 1011. Original Issue Discount.................................................. 41
SECTION 1012. Additional Sums.......................................................... 41
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES................................... 41
SECTION 1101. Securities Subordinate to Senior Indebtedness............................ 41
SECTION 1102. Default on Senior Indebtedness............................................ 42
SECTION 1103. Prior Payment of Senior Indebtedness Upon Acceleration of Securities...... 42
SECTION 1104. Liquidation; Dissolution.................................................. 42
SECTION 1105. Subrogation............................................................... 43
SECTION 1106. Trustee to Effectuate Subordination....................................... 44
SECTION 1107. Notice by the Company .................................................... 44
SECTION 1108. Rights of the Trustee; Holders of Senior Indebtedness.................... 45
</TABLE>
vii
<PAGE> 9
<TABLE>
<CAPTION>
Page
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<S> <C>
SECTION 1109. Subordination May Not Be Impaired......................................... 45
ARTICLE TWELVE
REDEMPTION OF SECURITIES.................................... 45
SECTION 1201. Applicability of Article.................................................. 45
SECTION 1202. Election to Redeem; Notice to Trustee..................................... 46
SECTION 1203. Selection by Trustee of Securities to be Redeemed......................... 46
SECTION 1204. Notice of Redemption...................................................... 46
SECTION 1205. Deposit of Redemption Price............................................... 47
SECTION 1206. Securities Payable on Redemption Date..................................... 47
SECTION 1207. Securities Redeemed in Part............................................... 47
ARTICLE THIRTEEN
SINKING FUND......................................... 48
SECTION 1301. Applicability of Article................................................ 48
SECTION 1302. Satisfaction of Sinking Fund Payments With Securities................... 48
SECTION 1303. Redemption of Securities for Sinking Fund............................... 48
</TABLE>
viii
<PAGE> 10
This INDENTURE is dated as of June 4, 1998, between HUNTINGTON
BANCSHARES INCORPORATED, a Maryland corporation (the "Company"), having its
principal office at the Huntington Center, 41 South High Street, Columbus, Ohio
43287 and THE CHASE MANHATTAN BANK, a New York banking corporation, as Trustee
(the "Trustee").
RECITALS
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to provide for the
issuance from time to time of it unsecured junior subordinated debentures in
series (the "Junior Subordinated Securities" or the "Securities") of
substantially the tenor hereinafter provided, including Securities issued to
evidence loans made to the Company of the proceeds from the issuance from
time to time by one or more statutory business trusts (each a "Trust") of
undivided preferred beneficial interests in the assets of such Trust (the
"Capital Securities") and undivided common beneficial interests in the assets
of such Trust (the "Common Securities" and, collectively with the Capital
Securities, the "Trust Securities"), and to provide the terms and conditions
upon which the Securities are to be authenticated, issued, and declared; and
WHEREAS, all things necessary to make this Indenture a valid
agreement of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the singular
and the masculine as well as the feminine;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(4) the words "hereby," "herein," "hereof," and "hereunder"
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section, or other subdivision;
(5) a reference to any Person shall include its successor and
assigns;
(6) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended, or amended and
restated and in effect from time to time;
(7) a reference to any statute, law, rule, or regulation,
shall include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule, or regulation; and
(8) a reference to any particular rating category shall be
deemed to include any corresponding successor category, or any corresponding
rating category issued by a successor or subsequent rating agency.
<PAGE> 11
"Act," when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Interest" means the interest, if any, that shall
accrue on any interest of any Securities of any series the payment of which has
not been made on the applicable Interest Payment Date and which shall accrue at
the rate per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 1012.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the
Trustee to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board as the context
requires.
"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 or the Executive Committee thereof and to be in full
force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means any day other than a Saturday or Sunday
or a day on which banking institutions in the City of New York or the City of
Columbus are authorized or required by law or executive order to remain closed
or a day on which the Corporate Trust Office of the Trustee, or with respect to
the Securities of a series initially issued to a Trust for so long as such
Securities are held by such Trust, the principal office of the Property Trustee,
under the related Declaration, is closed for business.
"Capital Securities" has the meaning specified in the Recitals
to this instrument.
"Capital I Securities" means the obligations of the Company
associated with the Floating Rate Capital Securities issued by Huntington
Capital I.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties at such time.
"Common Securities" has the meaning specified in the Recitals
to this instrument.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary, and
delivered to the Trustee.
"Corporate Trust Office" means the principal office of the
Trustee in the City of New York, at which at any particular time its corporate
trust business shall be administered and which at the date of this Indenture is
located at 450 West 33rd Street, New York, New York 10001, Attention: Global
Trust Services.
"Covenant Defeasance" has the meaning specified in Section
403.
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<PAGE> 12
"Custodian" means the custodian for the time being of any
Global Security as designated by the Depositary.
"Declaration" means, with respect to any Trust, the
declaration of trust or other governing instrument, as amended, modified, or
supplemented from time to time, of such Trust.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to Securities issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as Depositary for
such Securities.
"Distributions," with respect to the Trust Securities issued
by a Trust, means amounts payable in respect of such Trust Securities as
provided in the related Declaration and referred to therein as Distributions.
"Dollar" or "$" means the currency of the United States of
America that, as at the time of payment, is legal tender for the payment of
public and private debts.
"Event of Default," unless otherwise specified with respect to
a series of Securities as contemplated by Section 301, has the meaning specified
in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor legislation.
"Extension Period" has the meaning specified in Section 311.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System, as from time to time constituted, or if at any time after the
execution of this Indenture the Federal Reserve is not existing and performing
the duties now assigned to it, then the body performing such duties at such
time.
"Global Security" means a Security that evidences all or part
of a series of Securities and is authenticated and delivered to, and registered
in the name of, the Depositary for such Securities or a nominee thereof.
"Guarantee" means, with respect to any Trust, the Guarantee
Agreement made by the Company in favor of The Chase Manhattan Bank as trustee
thereunder for the benefit of the Holders (as defined therein) of the Capital
Securities issued by such Trust and the holder of the Common Securities of such
Trusts, as modified, amended, or supplemented from time to time.
"Holder" means a Person in whose name a Security is registered
in the Security Register.
"Indenture" means this instrument as originally executed or as
it may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively, and shall include the terms of each particular series of
Securities as contemplated by Section 301.
"Interest Payment Date" means, as to each series of
Securities, when used with respect to any installment of interest on a Security,
the date specified in such Security as the fixed date on which an installment of
interest with respect to the Securities is due and payable.
"Investment Company Event" means the receipt by the Trust of
an Opinion of Counsel 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 the
interpretation or application of law or regulations 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 to be registered under the Investment Company Act of 1940,
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<PAGE> 13
as amended, which Change in 1940 Act Law becomes effective on or after the date
of original issuance of the Securities.
"Junior Subordinated Securities" has the meaning specified in
the Recitals to this instrument.
"Legal Defeasance" has the meaning specified in Section 402.
"Maturity", when used with respect to any Security, means the
date on which the principal of such Security becomes due and payable as therein
or herein provided, whether at the Stated Maturity (which may be extended as
therein or herein provided) or by declaration of acceleration, call for
redemption or otherwise.
"Officers' Certificate" means a certificate signed on behalf
of the Company by the Chairman of the Board, a Vice Chairman of the Board, the
President, or a Vice President, and by the Treasurer, an Assistant Treasurer,
the Secretary, or an Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers' Certificate given pursuant to
Section 1004 shall be the principal executive, financial, or accounting officer
of the Company. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers'
Certificate on behalf of the Company has read the covenant or condition and the
definitions relating thereto;
(b) 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
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company (and who may be an employee of the Company). An
opinion of counsel may rely on Officers' Certificates as to matters of fact.
"Original Issue Date" means the date of issuance specified as
such in each Security.
"Outstanding", when used in reference to any Securities,
means, as of the date of determination, all Securities theretofore authenticated
and delivered under this Indenture, except: (i) Securities cancelled by the
Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose
payment or redemption money in the necessary amount has been deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own Paying
Agent) for the Holder of such Securities; provided that, if such Securities are
to be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306, or in exchange or
for in lieu of which other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such Securities in respect of which
there shall have been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose hands such Securities
are valid obligations of the Company; provided, however, that in determining
whether the holders of the requisite principal amount of Outstanding Securities
are present at a meeting of holders of Securities for quorum purposes or have
consented to or voted in favor of any request, demand, authorization, direction,
notice, consent, waiver, amendment or modification hereunder, Securities held
for the account of the Company, any of its subsidiaries or any of its affiliates
shall be disregarded and deemed not to be Outstanding, except that in
determining whether the Trustee shall be protected in making such a
determination or relying upon any such quorum, consent or vote, only Securities
which a Responsible Officer of the Trustee actually knows to be so owned shall
be so disregarded.
"Paying Agent" means any Person authorized by the Company to
pay the principal of or interest on any Securities on behalf of the Company.
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<PAGE> 14
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost, or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost, or stolen Security.
"Property Trustee" means, with respect to any Trust, the
Person identified as the "Property Trustee" in the related Declaration, solely
in its capacity as Property Trustee of such Trust under such Declaration.
"Redemption Date", when used with respect to any Security to
be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"Redemption Price", when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture or the terms of such Security.
"Regular Record Date" for the interest payable on any Interest
Payment Date with respect to the Securities of a series means, unless otherwise
provided pursuant to Section 301 with respect to Securities of such series, the
date this is fifteen days next proceeding such Interest Payment Date.
"Regulatory Capital Event" means that the Company shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) any amendment to or change
(including any announced prospective change) in the laws (or any regulations
thereunder) of the United States or any rules, guidelines, or policies of the
Federal Reserve or (b) any official or administrative pronouncement or action or
judicial decision for interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or decision is announced
on or after the date of original issuance of the Capital Securities, the Capital
Securities do not constitute, or within 90 days of the date thereof, will not
constitute Tier 1 capital (or its then equivalent); provided, however, that the
distribution of the Securities in connection with the liquidation of the Trust
by the Company shall not in and of itself constitute a Regulatory Capital Event
unless such liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.
"Responsible Officer", when used with respect to the Trustee,
means any officer within the Corporate Trust Office, including any Vice
President, Assistant Vice Presidents, the Secretary, any Assistant Secretary, or
any other officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Securities" or "Security" has the meaning specified in the
Recitals to this instrument.
"Securities Act" means the Securities Act of 1933 or any
successor statute thereto, in each case, as amended from time to time.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Indebtedness" means, whether recourse is to all or a
portion of the assets of the Company and whether or not contingent, (i) every
obligation of the Company for money borrowed; (ii) every obligation of the
Company 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 the Company with
respect to letters of credit, bankers' acceptances, or similar facilities issued
for the account of the Company; (iv) every obligation of the Company 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 the Company; (vi) every
obligation of the Company for claims (as defined in Section 101(4) of the United
States Bankruptcy Code of 1978, as amended) in respect of derivative products
such as interest and foreign
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<PAGE> 15
exchange rate contracts, commodity contracts and similar arrangements; and (vii)
every obligation of the type referred to in clauses (i) through (vi) of another
Person and all dividends of another Person the payment of which, in either case,
the Company has guaranteed or is responsible or liable for, directly or
indirectly, as obligor or otherwise; provided that "Senior Indebtedness" shall
not include (a) any obligations which, by their terms, are expressly stated to
rank pari passu in right of payment with, or to not be superior in right of
payment to, the Securities, (b) any indebtedness of the Company which when
incurred was without recourse to the Company, (c) any indebtedness of the
Company to any of its Subsidiaries, (d) any indebtedness to any employee of the
Company, or (e) any indebtedness in respect of debt securities issued to any
trust, or a trustee of such trust, partnership, or other entity affiliated with
the Company that is a financing entity of the Company in connection with the
issuance of such financing entity of securities that are similar to the Capital
Securities, including the obligations associated with the Capital I Securities.
"Special Event" means either an Investment Company Event, a
Regulatory Capital Event, or a Tax Event.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or
any installment of principal thereof (or premium, if any) or interest (including
any Additional Interest) thereon, means the date specified pursuant to the terms
of such Security as the fixed date on which the principal of such Security or
such installment of principal (or premium, if any) or interest (including any
Additional Interest), is due and payable.
"Subsidiary" means a corporation more than 50% of the
outstanding voting stock of which is owned, directly or indirectly, by the
Company or by one or more other Subsidiaries or by the Company and one or more
other Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors, whether
at all times or only so long as no senior class of stock has such voting power
by reason of any contingency.
"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 (a) any amendment to, clarification of, change in, or announced
proposed change in the laws (or any regulations promulgated thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any judicial decision, any official administrative
pronouncement, ruling (including any private letter ruling or technical advice
memorandum or field service advice), revenue agent's report, regulatory
procedure, notice, or pronouncement, including any notice or announcement of
intent to adopt such procedures or regulations (an "Administrative Action"),
regardless of whether such judicial decision or Administrative Action is issued
to or in connection with a proceeding involving the Company or a Trust and
whether or not subject to review or appeal, which amendment, clarification,
change, Administrative Action, or decision is enacted, promulgated, or announced
in each case, is taken on or after the date of original issuance of the Capital
Securities there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of the date of such opinion, subject to United States
federal income tax with respect to income received or accrued on the Securities,
(ii) interest payable by the Company on the Securities is not, or within 90 days
of the date of such opinion, will not be, deductible by the Company, in whole or
in part, for United States federal income tax purposes, or (iii) the Trust is,
or will be within 90 days of the date of such opinion, subject to more than a de
minimis amount of other taxes, duties or other governmental charges.
"Trust" has the meaning specified in the Recitals to this
instrument.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean such successor Trustee, and if at any time there is more than one such
Person, "Trustee" as used with respect to the Securities of any series shall
mean the Trustee with respect to Securities of that series.
"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
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<PAGE> 16
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"U.S. Government Obligations" has the meaning specified in
Section 404.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions; Officers' Certificate of
Evidence.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company shall
furnish to the Trustee such certificates and opinions as may be required under
the Trust Indenture Act. Each such certificate or opinion shall be given in the
form of an Officers' Certificate, if to be given by an officer of the Company,
or an Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
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 omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by an 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 or omitted by it under the provisions of this
Indenture upon the faith thereof.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give, or execute two or
more applications, requests, consents, certificates, statements, opinions, or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direction, notice,
consent, waiver, or other action provided by this Indenture to be given or taken
by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee at the address specified in Section 105 and, where it is hereby
expressly required, to the Company. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and
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<PAGE> 17
(subject to Section 601) conclusive in favor of the Trustee and the Company, if
made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The Company may, in the circumstances permitted by the
Trust Indenture Act, fix any day as the record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to give
or take any request, demand, authorization, direction, notice, consent, waiver,
or other action, or to vote on any action, authorized or permitted to be given
or taken by Holders of Securities of such series. If not set by the Company
prior to the first solicitation of a Holder made by any Person in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 15th day (or, if later, the date
of the most recent list of Holders required to be provided pursuant to Section
701) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders of
Outstanding Securities of relevant series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the relevant action.
(d) The ownership of Securities shall be proved by the
Security Register.
(e) Any request, demand, authorization, direction, notice,
consent, waiver, or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Trustee or
the Company in reliance thereon, whether or not notation of such action is made
upon such Security.
SECTION 105. Notices, Etc. to Trustee and the Company.
Any request, demand, authorization, direction, notice,
consent, waiver, or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished, or filed in
writing to or with the Trustee at its Corporate Trust Office; or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to the Company
addressed to it at the address of its principal office specified in the first
paragraph of this instrument or at any other address previously furnished in
writing to the Trustee by the Company; provided, however, that the Trustee
may provide such information or documents to the Company by facsimile or
overnight courier.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any
event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers of
notice by Holders shall be filed with the Trustee, but such filing shall not be
a condition precedent to the validity of any action taken in reliance upon such
waiver.
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In case by reason of the suspension of regular mail service or
by reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made by telecopier or overnight air
courier guaranteeing next day delivery.
SECTION 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies, or conflicts with a
provision of the Trust Indenture Act that is required under such Act to be a
part of and govern this Indenture, the provision of the Trust Indenture Act
shall control. If any provision of this Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the
latter provision shall be deemed to apply to this Indenture as so modified or so
be excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
SECTION 109. Separability Clause.
In case any provision in this Indenture or in the Securities
shall be invalid, illegal, or unenforceable, the validity, legality, and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the holders of Senior Indebtedness, the holders of Capital
Securities (to the extent provided herein) and the Holders of Securities, any
benefit or any legal or equitable right, remedy, or claim under this Indenture.
SECTION 111. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THIS INDENTURE
IS SUBJECT TO THE PROVISIONS OF THE TRUST INDENTURE ACT THAT ARE REQUIRED TO BE
PART OF THIS INDENTURE AND SHALL, TO THE EXTENT APPLICABLE, BE GOVERNED BY SUCH
PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal of the Securities need not be made on such
date, but may be made on the next succeeding Business Day (except that, if such
Business Day is in the next succeeding calendar year, such Interest Payment
Date, Redemption Date, or Stated Maturity, as the case may be, shall be the
immediately preceding Business Day) with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity,
provided that no interest shall accrue for the period from and after such
Interest Payment Date, Redemption Date, or Stated Maturity, as the case may be.
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ARTICLE TWO
SECURITY FORMS
The Securities of each series and the Trustee's certificate of
authentication in definitive form shall be substantially in the form attached
hereto as Exhibit A or such other form or forms as shall be established by or
pursuant to a Board Resolution or in one or more indentures supplemental hereto.
If the Securities of a series are distributed to the holders
of Capital Securities and Common Securities, the record holder (including any
Depositary) of any Capital Securities or Common Securities shall be issued such
Securities in definitive, fully registered form without interest coupons,
substantially in the form of Exhibit A hereto, with the legends, if any, in
substantially the form of the legends existing on the security representing the
Capital Securities or Common Securities to be exchanged (with such changes
thereto as the officers executing such Securities determine to be necessary or
appropriate, as evidenced by their execution of the Securities) and such other
legends as may be applicable thereto, duly executed by the Company and
authenticated (upon receipt of a Company Order for the authentication) by the
Trustee or the Authenticating Agent as provided herein, which Securities, if to
be held in global form by any Depositary, may be deposited on behalf of the
holders of the Securities represented thereby with the Trustee, as custodian for
the Depositary, and registered in the name of a nominee of the Depositary.
Any Global Security shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee or the Custodian, at
the direction of the Trustee, in such manner and upon written instructions given
by the holder of such Securities in accordance with the Indenture. Payment of
principal, interest, and premium, if any, on any Global Security shall be made
to the holder of such Global Security.
The Securities of each series shall have such appropriate
insertions, omissions, substitutions, and other variations as are required or
permitted by this Indenture, and may have such letters, numbers, or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the applicable tax laws or the rules of any securities
exchange or as may, consistently herewith, be determined by the officers
executing such Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed, lithographed, or
engraved or produced by any combination of these or other methods, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There
shall be established in or pursuant to a Board Resolution and, subject to
Section 303, set forth or determined in the manner provided in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
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(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any upon the aggregate principal amount of
the Securities of such series that may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon registration
of transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 304, 305, 306, 906, or 1207 and except for any
Securities that, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder); provided, however, that the authorized
aggregate principal amount of such series may be increased above such amount by
a Board Resolution to such effect;
(c) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that security
(or one or more Predecessor Securities) is registered at the close of business
on the Regular Record Date for such interest;
(d) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of determination
thereof, and any dates on which or circumstances under which, the Company shall
have the right to extend or shorten such Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such
series shall bear interest, if any, the rate or rates and extent to which
Additional Interest, if any, shall be payable in respect of any Securities of
such series, the date or dates from which any such interest or Additional
Interest shall accrue, the Interest Payment Dates on which such interest shall
be payable, the right, pursuant to Section 311 or as otherwise set forth
therein, of the Company to defer or extend an Interest Payment Date, and the
Regular Record Date for the interest payable on any Interest Payment Date or the
method by which any of the foregoing shall be determined;
(f) the place or places where the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
such series shall be payable, the place or places where the Securities of such
series may be presented for registration of transfer or exchange, any
restrictions that may be applicable to any such transfer or exchange in addition
to or in lieu of those set forth herein, and the place or places where notices
and demands to or upon the Company in respect of the Securities of such series
may be made;
(g) the period or periods within or the date or dates on
which, if any, the prices or prices at which and the terms and conditions upon
which the Securities of such series may be redeemed, in whole or in part, at the
option of the Company, and if other than by a Board Resolution, the manner in
which any election by the Company to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Company to
redeem, repay, or purchase the Securities of such series pursuant to any sinking
fund, amortization, or analogous provisions, or at the option of a Holder
thereof, and the period or periods within which, the price or prices at which,
the currency or currencies (including currency unit or units) in which, and the
other terms and conditions upon which Securities of the series shall be
redeemed, repaid, or purchased, in whole or in part, pursuant to such
obligation;
(i) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1000 and any integral
multiple thereof;
(j) if other than U.S. currency, the currency or currencies
(including any currency unit or units) in which the principal of (and premium,
if any) and interest and Additional Interest, if any, on the Securities of the
series shall be payable, or in which the Securities of the series shall be
denominated and the manner of determining the equivalent thereof in Dollars for
purposes of the definition of Outstanding;
(k) the additions, modifications, or deletions, if any, in the
Events of Default or covenants of the Company set forth herein with respect to
the Securities of such series;
(l) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or more
dates prior to the Stated Maturity, the amount which shall be deemed to be the
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principal amount of such securities as of any such date for any purpose
thereunder or hereunder, including the principal amount thereof which shall be
due and payable upon any Maturity other than the Stated Maturity or which shall
be deemed to be Outstanding as of any date prior to the Stated Maturity (or, in
any such case, the manner in which such amount deemed to be the principal amount
shall be determined);
(m) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to permit or
facilitate the issuance of the Securities of such series in bearer form,
registrable or not registrable as to principal, and with or without interest
coupons;
(n) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Securities of such series
or the manner in which such amounts will be determined;
(o) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global Securities and,
in such case, the respective Depositaries for such Global Securities, the form
of any legend or legends that shall be borne by any such Global Security in
addition to or in lieu of that referred to in Article Two and any circumstances
in addition to or in lieu of those set forth in section 305 in which any such
Global Security may be exchanged in whole or in part for Securities registered,
and any transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such Global
Security or a nominee thereof;
(p) the appointment of any Paying Agent or agents for the
Securities of such series;
(q) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the Company, and the
additions or changes, if any, to this Indenture with respect to the Securities
of such series to permit or facilitate such conversion or exchange;
(r) if such Securities are to be issued to a Trust, the form
or forms of the Declaration and Guarantee relating thereto;
(s) if other than as set forth herein, the relative degree, if
any, to which the Securities of the series shall be senior to or be subordinated
to other series of Securities in right of payment, whether such other series of
Securities are Outstanding or not;
(t) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of the
Trustee or the requisite Holders of such Securities to declare the principal
amount thereof due and payable pursuant to Section 502;
(u) any addition to or change in the covenants set forth in
Article Ten which applies to Securities of the series; and
(v) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture, except as
permitted by Section 901(6)).
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise be provided
herein or in or pursuant to such Board Resolution as set forth, or determined in
the manner provided, in such Officers' Certificate or in any Indenture
Supplemental hereto.
The Securities shall be subordinated in right of payment to
Senior Indebtedness as provided in Article Eleven.
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The Securities shall be redeemable as provided in Article
Twelve.
SECTION 302. Denominations.
The Securities of each series shall be issuable only in
registered form, without coupons, and only in denominations of $1,000 and any
integral multiple thereof, unless otherwise specified as contemplated by
Section 301.
SECTION 303. Execution, Authentication, Delivery, and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its President, or
one of its Vice Presidents. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of any series
executed by the Company to the Trustee for authentication, together with a
Company Order for the authentication and delivery of such Securities and the
Trustee in accordance with such Company Order shall authenticate and make
available for delivery such Securities as in this Indenture provided and not
otherwise. If the form or terms of the Securities of the series have been
established by or pursuant to one or more Board Resolutions as permitted by
Section 301, 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 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution, that such form has been established in conformity
with the provisions of this Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 301, that such terms
have been established in conformity with the provisions of this Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, 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.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will affect the Trustee's own rights,
duties, or immunities under the Securities and this Indenture or otherwise in a
manner that is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and of the
preceding paragraph, if all Securities of a series are not to be originally
issued at one time, it shall not be necessary to deliver the Officers'
Certificate otherwise required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such preceding paragraph at or
prior to the authentication of each Security of such series if such documents
are delivered at or prior to the authentication upon original issuance of the
first Security of such series to be issued.
Each Security shall be dated the date of its authentication.
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No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided for
herein executed by the Trustee by manual signature, and such certificate upon
any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder. Notwithstanding
the foregoing, if any Security shall have been authenticated and delivered
hereunder but never issued and sold by the Company, and the Company shall
deliver such Security to the Trustee for cancellation as provided in Section
309, for all purposes of this Indenture such Security shall be deemed never to
have been authenticated and delivered hereunder and shall never be entitled to
the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any
series, the Company may execute, and upon Company Order the Trustee shall
authenticate and make available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed, or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Securities
of such series in lieu of which they are issued and with such appropriate
insertions, omissions, substitutions, and other variations as the officers
executing such Securities may determine, as evidenced by their execution of such
Securities.
If temporary Securities of any series are issued, the Company
will cause definitive Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive Securities, the
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at any office or agency of the Company
designated pursuant to Section 1002, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the Company
shall execute and the Trustee shall authenticate, upon receipt of a Company
Order for the authentication, and make available for delivery in exchange
therefor a like principal amount of definitive Securities of the same series of
authorized denominations having the same Original Issue Date and Stated Maturity
and having the same terms of such temporary Securities. Until so exchanged, the
temporary Securities of any series shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities of such series.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust
Office of the Trustee, a register (the register maintained in such office and in
any other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at
an office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall, upon receipt of a
Company Order for authentication, authenticate and make available for delivery,
in the name of the designated transferee or transferees, one or more new
Securities of the same series of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Securities may be exchanged for
other Securities of the same series of any authorized denominations and of a
like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered
for exchange, the Company shall execute, and the Trustee, upon receipt of a
Company Order for authentication, shall authenticate and make available for
delivery, the Securities which the Holder making the exchange is entitled to
receive.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
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Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Company, duly executed by the Holder thereof or his attorney duly authorized
in writing.
No service charge shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities other
than exchanges pursuant to Sections 304, 906, or 1207 not involving any
transfer.
If the Securities are to be redeemed in part, the Company
shall not be required (A) to issue, register the transfer of, or exchange any
Security of any series during a period beginning at the opening of business 15
days before the day of the mailing of a notice of redemption of any such
Securities selected for redemption under Section 1204 and ending at the close of
business on the day of such mailing, or (B) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost, and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute and the Trustee, upon receipt of a Company Order for the
authentication, shall authenticate and make available for delivery in exchange
therefor a new Security of the same series of like tenor and principal amount
and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss, or theft of any
Security and (ii) such security or indemnity as may be required by them to save
each of them and any agent of either of them harmless, then, in the absence of
notice to the Company or the Trustee that such Security of the same series has
been acquired by a bona fide purchaser, the Company shall execute and the
Trustee shall, upon receipt of a Company Order for the authentication,
authenticate and make available for delivery, in lieu of any such destroyed,
lost, or stolen Security, a new Security of the same series of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost, or stolen
Security has become or is about to become due and payable, the Company in its
discretion may, subject to the preceding paragraph, pay such Security instead of
issuing a new Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and its agents and
counsel) connected therewith.
Every new Security issued pursuant to this Section in lieu of
any destroyed, lost, or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost, or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of the same series duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost, or stolen Securities.
SECTION 307. Payment of Interest and Additional Interest; Interest Rights
Preserved.
Interest and Additional Interest on any Security of any series
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is registered at the close of business on the
Regular Record Date for such interest in respect of Securities of such series,
except that, unless otherwise provided in the Securities of such series,
interest and any Additional Interest payable on the Stated Maturity of the
principal of a Security shall be paid to the Person to whom principal is paid.
The initial payment of interest on any security of any series that is issued
between a
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Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the Board Resolution pursuant to Section 301
with respect to the related series of Securities.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on a Special
Record Date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Security and the date
of the proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest which
shall be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder at his address as it appears in the Security Register, not less
than 10 days prior to such Special Record Date. Notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Securities of such series (or their respective Predecessor Securities) are
registered at the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series may be listed, and if so listed,
upon such notice as may be required by such exchange, if, after written notice
given by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee in its
sole discretion.
Subject to the foregoing provisions of this Section, each
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue which, which were carried by such other
Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
shall treat the Person in whose name any Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and (subject
to Section 307) interest on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any officer, director, employee, or agent of the Company or the Trustee
shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security
held on behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, the Trustee, and any agent of the Company or the Trustee as the owner
of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee, or any agent
of the Company or the Trustee from giving effect to any written certification,
proxy, or other authorization furnished by a Depositary or impair, as between a
Depositary and such holders of beneficial interest, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of any Security.
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SECTION 309. Cancellation.
All Securities surrendered for payment, redemption,
registration of transfer, or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities cancelled as provided in this
Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of in a manner customary to the
Trustee, provided, however, that the Trustee may but shall not be required to
destroy such Securities. If the Company shall 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
surrendered to the Trustee for cancellation.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301
for Securities of any series, interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve 30-day
months and the actual number of days elapsed in any partial month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing the rate per annum by the number of interest periods that
together constitute a full twelve months.
SECTION 311. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 301 with respect to
the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Company shall have the right, at any time during
the term of such series, from time to time to defer the payment of interest on
such Securities for such period or periods as may be specified as contemplated
by Section 301 (each, an "Extension Period"), during which Extension Periods the
Company shall, if so specified as contemplated by Section 301, have the right to
make partial payments of interest on any Interest Payment Date. No Extension
Period shall end on a date other than an Interest Payment Date. At the end of
any such Extension Period the Company shall pay all interest then accrued and
unpaid on the Securities (together with Additional Interest thereon, if any, at
the rate specified for the Securities of such series to the extent permitted by
applicable law); provided, however, that no Extension Period shall extend beyond
the Stated Maturity of the principal of the Securities of such series; and
provided further however that during any such Extension Period, the Company
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Company's capital stock, (ii) make any payment of principal of or interest or
premium, if any, on or repay, repurchase, or redeem any debt securities of the
Company that rank pari passu in all respects with or junior in interest to the
Securities of such series or (iii) make any guarantee payment 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 to the Securities of
such series (other than (a) repurchases, redemptions, or other acquisitions of
shares of capital stock of the Company in connection with any employment
contract, benefit plan, or other similar arrangement with or for the benefit of
any one or more employees, officers, directors, or consultants, in connection
with a dividend reinvestment or stockholder stock purchase plan or in connection
with the issuance of capital stock of the Company (or securities convertible
into or exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
other class or series of the Company's capital stock or of any class or series
of the Company's indebtedness for any class or series of the Company's capital
stock, (c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any rights plan, or the issuance of rights, stock,
or other property under any rights plan, or the redemption or repurchase of
rights pursuant thereto, or (e) any dividend in the form of stock, warrants,
options, or other rights where the dividend stock or the stock issuable upon
exercise of such warrants, options, or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such
stock). Prior to the termination of any such Extension Period, the Company may
further defer the payment of interest, provided that no Extension Period shall
exceed the period or periods specified in such Securities, extend beyond the
Stated Maturity of the principal of such Securities, or end on a date
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other than an Interest Payment Date. Upon the termination of any such Extension
Period and upon the payment of all accrued and unpaid interest and any
Additional Interest then due on any Interest Payment Date, the Company may elect
to begin a new Extension Period, subject to the above conditions. No interest or
Additional Interest shall be due and payable during an Extension Period, except
at the end thereof, but each installment of interest that would otherwise have
been due and payable during such Extension Period shall bear Additional Interest
as and to the extent as may be specified as contemplated by Section 301. The
Company shall give the Holders of the Securities of such series and the Trustee
written notice of its election to begin any such Extension Period at least one
Business Day prior to the next succeeding Interest Payment Date on which
interest on Securities of such series would be payable but for such deferral or,
with respect to any Securities of a series issued to a Trust, so long as any
such Securities are held by such Trust, at least one Business Day prior to the
earlier of (i) the next succeeding date on which distributions on the Capital
Securities of such Trust would be payable but for such deferral, and (ii) the
date on which the Property Trustee of such Trust is required to give notice to
any securities exchange or other applicable self-regulatory organization or to
holders of such Capital Securities of the record date or the date such
Distributions are payable.
SECTION 312. Right of Set-off.
With respect to the Securities of a series initially issued to
a Trust, notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
thereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a related payment under the Guarantee relating
to such Security or to a holder of Capital Securities pursuant to an election
undertaken pursuant to this Indenture.
Each Security issued hereunder shall provide that the Company
and, by its acceptance of a Security or a beneficial interest therein, the
Holder of, and any Person that acquires a beneficial interest in, such Security
agree that for United States federal, state, and local tax purposes it is
intended that such Security constitutes indebtedness.
SECTION 313. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers
(if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the "CUSIP" numbers.
SECTION 314. Global Securities.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Company for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary advises the Trustee in writing that
such Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Company is unable to locate a qualified successor, (ii) the Company executes and
delivers to the Trustee a Company Order stating that the Company elects to
terminate the book-entry system through the Depositary, or (iii) there shall
have occurred and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other
Securities or cancelled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Securities Registrar for exchange or
cancellation as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged for other Securities or cancelled in part, or if another
Security is to be
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exchanged in whole or in part for a beneficial interest in any Global Security,
then either (i) such Global Security shall be so surrendered for exchange or
cancellation as provided in this Article Three or (ii) the principal amount
thereof shall be reduced, subject to Section 305, or increased by an amount
equal to the portion thereof to be so exchanged or cancelled, or equal to the
principal amount of such other Security to be so exchanged for a beneficial
interest therein, as the case may be, by means of an appropriate adjustment made
on the records of the Securities Registrar, whereupon the Trustee, in accordance
with the applicable procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
written registration instructions, the Trustee shall, subject to Section 314(b)
and as otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange written for such Global Security (or any portion
thereof) in accordance with the written instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Article Three, Section 906, or
1207, or otherwise, shall be authenticated and delivered in the form of, and
shall be, a Global Security, unless such Security is registered in the name of a
Person other than the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of book-entry Capital
Securities upon the dissolution of a Trust shall be distributed in the form of
one or more Global Securities registered in the name of a Depositary or its
nominee, and deposited with the Securities Registrar, as custodian for such
Depositary, or with such Depositary, for credit by the Depositary to the
respective accounts of the beneficial owners of the Securities represented
thereby (or such other accounts as they may direct). Securities distributed to
holders of Capital Securities other than book-entry Capital Securities upon the
dissolution of a Trust shall not be issued in the form of a Global Security or
any other form intended to facilitate book-entry trading in beneficial interests
in such Securities.
(f) The Depositary or its nominee, as the registered owner of
a Global Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the applicable procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its participants. Neither
the Trustee nor the Securities Registrar shall have any liability in respect of
any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global
Security shall be exercised only through the Depositary and shall be limited to
those established by law and agreements between such owners and the Depositary
and/or its participants.
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on written demand of and at the
expense of the Company, shall execute instruments supplied by the Company
acknowledging satisfaction and discharge of this Indenture, when (1) either (A)
all Securities theretofore authenticated and delivered (other than (i)
Securities which have been destroyed, lost, or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Securities for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the Trustee for
cancellation; or (B) all such Securities not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Maturity within one year, or (iii) if redeemable at the
option of the Company, are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the
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expense, of the Company and the Company, in the case of subclause (B) (i), (ii)
or (iii) above, has deposited or caused to be deposited with the Trustee as
funds in trust for the purpose an amount sufficient to pay and discharge the
entire indebtedness on such Securities of such series not theretofore delivered
to the Trustee for cancellation, for principal and interest to the date of such
deposit (in the case of Securities which have become due and payable) or to the
Maturity or Redemption Date, as the case may be; (2) the Company has paid or
caused to be paid all other sums payable hereunder by the Company; and (3) the
Company has delivered to the Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section
401, in the case of any Securities of a series with respect to which the exact
amount described in subparagraph (a) of Section 404 can be determined at the
time of making the deposit referred to in such subparagraph (a), the Company
shall be deemed to have paid and discharged the entire indebtedness on all such
Securities as provided in this Section on and after the date the conditions set
forth in Section 404 are satisfied, and the provisions of this Indenture with
respect to the Securities shall no longer be in effect (except as to (i) rights
of registration of transfer and exchange of Securities, (ii) substitution of
mutilated, defaced, destroyed, lost, or stolen Securities, (iii) maintenance of
a Paying Agent, (iv) rights of Holders of Securities to receive, solely from the
trust fund described in subparagraph (a) of Section 404, payments of principal
thereof and interest, if any, thereon upon the original stated due dates
therefor (but not upon acceleration), (v) the rights, obligations, duties, and
immunities of the Trustee hereunder, (vi) this Section 402, and (vii) the rights
of the Holders of Securities as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them)
(hereinafter called "Legal Defeasance"), and the Trustee, at the cost and
expense of the Company, shall acknowledge the same.
SECTION 403. Covenant Defeasance.
In the case of any Securities of a series with respect to
which the exact amount described in subparagraph (a) of Section 404 can be
determined at the time of making the deposit referred to in such subparagraph
(a), (x) the Company shall be released from its obligations under any covenants
specified in or pursuant to this Indenture (except as to (i) rights of
registration of transfer and exchange of Securities, (ii) substitution of
mutilated, defaced, destroyed, lost, or stolen Securities, (iii) maintenance of
a Paying Agent, (iv) rights of Holders of Securities to receive, from the
Company pursuant to Section 1001, payments of principal thereof and interest, if
any, thereon upon the original stated due dates therefor (but not upon
acceleration), (v) the rights, obligations, duties, and immunities of the
Trustee hereunder, and (vi) the rights of the Holders of Securities as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them), and (y) the occurrence of any event specified in
Section 501(3) (with respect to any of the covenants specified in or pursuant to
this Indenture) shall be deemed not to be or result in an Event of Default, in
each case with respect to the Outstanding Securities as provided in this Section
on and after the date the conditions set forth in Section 404 are satisfied
(hereinafter called "Covenant Defeasance"), and the Trustee, at the cost and
expense of the Company, shall acknowledge the same. For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition, or limitation set forth in
any such covenant (to the extent so specified in the case of Section 501(3)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such covenant or by reason of any reference in any such covenant to any
other provision herein or in any other document, but the remainder of this
Indenture and the Securities shall be unaffected thereby.
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SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 402 or 403 to the Outstanding Securities:
(a) with reference to Section 402 or 403, the Company has
irrevocably deposited or caused to be irrevocably deposited with the
Trustee as funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of Securities (i) cash
in an amount, (ii) direct obligations of the United States of America,
backed by its full faith and credit ("U.S. Government Obligations"),
maturing as to principal and interest, if any, at such times and in
such amounts as will ensure the availability of cash, (iii) obligations
of a Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the timely payment of
which is unconditionally guaranteed as a full faith and credit
obligation by the United States of America, or (iv) a combination
thereof, in each case sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge the principal of and interest, if any, on all Securities on
each date that such principal or interest, if any, is due and payable;
(b) in the case of Legal Defeasance under Section 402, the
Company has delivered to the Trustee an Opinion of Counsel based on the
fact that (x) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (y), since the
date hereof, there has been a change in the applicable United States
federal income tax law, in either case to the effect that, and such
opinion shall confirm that, the Holders of the Securities of such
series will not recognize income, gain, or loss for federal income tax
purposes as a result of such deposit and Legal Defeasance and will be
subject to federal income tax on the same amount and in the same manner
and at the same times as would have been the case if such deposit and
Legal Defeasance had not occurred;
(c) in the case of Covenant Defeasance under Section 403, the
Company has delivered to the Trustee an Opinion of Counsel to the
effect that, and such opinion shall confirm that, the Holders of the
Securities will not recognize income, gain, or loss for federal income
tax purposes as a result of such deposit and Covenant Defeasance and
will be subject to federal income tax on the same amount in the same
manner and at the same times as would have been the case if such
deposit and Covenant Defeasance had not occurred;
(d) such Legal Defeasance or Covenant Defeasance will not
result in a breach or violation of, or constitute a default under, any
agreement or instrument to which the Company is a party or by which it
is bound; and
(e) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions precedent contemplated by this provision have been complied
with.
SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
1003, all money and U.S. Government Obligations deposited with the Trustee
pursuant to Section 401 shall be held in trust and such money and all money from
such U.S. Government Obligations shall be applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly
or through any Paying Agent (including the Company acting as its own Paying
Agent), as the Trustee may determine in its sole discretion, to the Persons
entitled thereto, of the principal and interest (including any Additional
Interest) for whose payment such money and U.S. Government Obligations has been
deposited with the Trustee.
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SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee and its
officers, directors, employees, and agents against any tax, fee, or other charge
imposed on or assessed against the U.S. Government Obligations deposited
pursuant to Section 404 or the principal or interest received in respect of such
obligations other than any such tax, fee, or other charge that by law is for the
account of the Holders of Outstanding Securities.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default" wherever used herein with respect to the
Securities of any series, means any one of the following events that has
occurred and is continuing (whatever the reason for such Event of Default and
whether it shall be 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 except as may be
specified pursuant to Section 301):
(1) failure for 30 days to pay any interest, including any
Additional Interest in respect thereof, on the Securities when due (subject to
the deferral of any due date in the case of an Extension Period); or
(2) failure to pay any principal (or premium, if any) of any
Security of that series when due, whether at Maturity, upon redemption, or
otherwise;
(3) failure on the part of the Company to observe or perform
in any material respect any other covenant herein or in the Securities of that
series that continues 90 days after written notice to the Company from the
Trustee or the holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series; or
(4) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment, or composition of or in respect of the Company under any applicable
federal or state bankruptcy, insolvency, reorganization, or other similar law,
or appointing a receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Company or of any substantial part of its property or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 90 consecutive
days;
(5) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of
bankruptcy or insolvency proceedings against it, or the filing by it of a
petition or answer or consent seeking reorganization or relief under any
applicable federal or state bankruptcy, insolvency, reorganization, or other
similar law, or the consent by it to the filing of any such petition or to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Company or of any substantial part of its property, or
the making by it of an assignment for the benefit for creditors, or the
admission by it in writing of its inability to pay its debts generally as they
become due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by the Company in furtherance of any such action; or
(6) any other Event of Default provided with respect to
Securities of that series.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs with respect to Securities of
any series at the time Outstanding and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities may declare the principal of and the
interest on all the Securities of that series and any other amounts payable
hereunder to be due and payable immediately, provided, however, that if upon an
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Event of Default, the Trustee or the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series fail to declare
the payment of all amounts on the Securities to be immediately due and payable,
the holders of at least 25% in aggregate liquidation amount of the related
series of Capital Securities issued by such Trust then outstanding shall have
such right, by a notice in writing to the Company (and to the Trustee if given
by Holders or the holders of Capital Securities) and upon any such declaration
such principal and all accrued interest (including any Additional Interest)
shall become immediately due and payable.
At any time after such a declaration of acceleration has been
made and before a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter provided in this Article, the Holders of
a majority in aggregate principal amount of the Outstanding Securities of that
series, by written notice to the Company and the Trustee, may rescind and annul
such declaration and its consequences if (1) the Company has paid or deposited
with the Trustee a sum sufficient to pay (A) all overdue interest on all
Securities, (B) any accrued Additional Interest on all Securities of such series
to the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Securities, (C) the principal of (and premium,
if any, on) any Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at the rate borne by the
Securities, and (D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements, and advances of the Trustee,
its agents, and counsel; and (2) all Events of Default with respect to
Securities of that series, other than the non-payment of the principal of
Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513. In the case of Securities
of a series initially issued to a Trust, if the Holders of such Securities fail
to annul such declaration and waive such default, the holders of a majority in
aggregate liquidation amount of the related series of Capital Securities issued
by such Trust then outstanding shall have such right. No such rescission shall
affect any subsequent default or impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any interest (including
any Additional Interest) on any Security of any series when such interest
becomes due and payable and such default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (and
premium, if any, on) any Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment thereof
shall be legally enforceable, interest on any overdue principal and on any
overdue interest, at the rate borne by the Securities, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements, and
advances of the Trustee, its agents, and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, and may prosecute such proceeding to judgment or final decree, and may
enforce the same against the Company or any other obligor upon such Securities
and collect the monies adjusted or decreed to be payable in the manner provided
by law out of the property of the Company or any other obligator upon the
Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee
may in its discretion proceed to protect and enforce its rights and the rights
of the Holders by such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or to enforce any other proper remedy.
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SECTION 504. Trustee may File Proofs of Claim.
In case of any receivership, insolvency, liquidation,
arrangement, adjustment, composition, or other similar judicial proceeding
relative to the Company (or any other obligor upon the Securities), its
property, or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any and all actions
authorized under the Trust Indenture Act in order to have claims of the Holders
and the Trustee allowed in any such proceeding. In particular, the Trustee shall
be authorized to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator, or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements, and
advances of the Trustee, its agents, and counsel, and any other amounts due the
Trustee under Section 607. No provision of this Indenture shall be deemed to
authorize the Trustee to authorize or consent to or accept or adopt on behalf of
any Holder any plan of reorganization, arrangement, adjustment, or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee may Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of any express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements, and advances of the Trustee, its agents, and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money collected by the Trustee
with respect to a series of Securities pursuant to this Article shall be applied
in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such money on account of principal, upon presentation of
the Securities and the notation thereon of the payment, if only partially paid,
and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable as such series of
Securities for principal and interest (including any Additional Interest),
respectively; and
THIRD: To the Company, if any balance shall remain.
SECTION 507. Limitation on Suits.
Subject to Section 508, no Holder of any Securities of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity satisfactory to it against the costs, expenses, and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request, and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Securities of that series; it being
understood and intended that no one or more Holders shall have any right in any
manner whatever by virtue of, or by availing of, any provision of this Indenture
to affect, disturb, or prejudice the rights of any other Holders, or to obtain
or to seek to obtain priority or preference over any other Holders, or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal and ratable benefit of all the Holders.
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest;
Capital Security Holders' Rights.
Notwithstanding any other provision in this Indenture, the
Holder of any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of and (subject to Section
307) interest (including any Additional Interest) on such Security on the
respective Stated Maturity expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit for the enforcement of
any such payment, and such rights shall not be impaired without the consent of
such Holder.
In the case of Securities of a series issued to a Trust, any
registered holder of the series of Capital Securities issued by such Trust shall
have the right, upon the occurrence of an Event of Default, to institute a
proceeding for enforcement of payment to such holder directly of the principal
of or interest on the Securities having a principal amount equal to the
aggregate liquidation amount of the Capital Securities as such holder on or
after the respective due date specified in the Securities. The Company may not
amend this Section without the prior written consent of the holders of all of
the Capital Securities. Notwithstanding any payment made to such holder of
Capital Securities by the Company in connection with such a Direct Action (as
defined in the Declaration), the Company shall remain obligated to pay the
principal of or interest on the Securities held by the Trustee or the Property
Trustee and the Company shall be subrogated to the rights of the holder of such
Capital Securities with respect to payments on the Capital Securities to the
extent of any payments made by the Company to such holder in any Direct Action
(as defined in the Declaration). A holder of Capital Securities will not be able
to exercise directly any other remedy available to the Holders of the
Securities.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee, any Holder, or any holder of Capital
Securities issued by any Trust has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder or holder of Capital Securities, then and in every such case,
subject to any determination in such proceeding, the Company, the Trustee, and
the Holders or holder of Capital Securities shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders or holder of Capital Securities shall
continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement
or payment of mutilated, destroyed, lost, or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 511. Delay or Omission not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security with respect to Securities of the related series or any holder of
Capital Securities to exercise any right or remedy accruing upon any Event of
Default with respect to the Securities of the related series shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders and the right and remedy given to holders of
Capital Securities may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders or holders of the Capital
Securities, as the case may be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the
Outstanding Securities of any series shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture; and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1008 hereof, the Holders of not
less than a majority in principal amount of the Outstanding Securities of any
series affected thereby may on behalf of the Holders of all the Securities waive
any past default hereunder and its consequences, except a default:
(1) in the payment of the principal of (or premium, if any) or
interest (including any Additional Interest) on any Security of such series
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Trustee); or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected;
provided, however, that such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation amount of Capital
Securities shall have consented to such waiver or modification to such waiver;
provided further, that if the consent of the Holder of each of the Outstanding
Securities is required, such waiver shall not be effective until each holder of
the Capital Securities shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist,
effective as of the date specified in such waiver (and effective retroactively
to the date of default, if so specified) and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered, or omitted by it as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent provided
in the Trust Indenture Act; provided, that neither this Section nor the Trust
Indenture Act shall be deemed to authorize any court to require such an
undertaking or to make such an assessment in any suit instituted by the Company
or the Trustee or in any suit for the enforcement of the right to receive the
principal of and interest on any Security.
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SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
wherever enacted, now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law and covenants that it will not hinder, delay, or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
ARTICLE SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as
provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision
of this Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it. Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
The Trustee shall not be liable for any error or judgment made
in good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts.
The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities of a series, relating to the time, method, and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any trust
or power conferred upon the Trustee, under this Indenture with respect to the
Securities of a series.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default known
to it hereunder as and to the extent provided by the Trust Indenture Act;
provided, however, that except in the case of a default in the payment of the
principal of 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 directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of Securities of
such series; provided, further, that in the case of any default of the character
specified in Section 501(3), no such notice to Holders shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default" means any event which is, or after notice or lapse of time or
both would become, an Event of Default with respect to Securities of such
series. For purposes of this Section, the Trustee shall not be deemed to have
knowledge of a default unless a Responsible Officer of the Trustee has actual
knowledge of such default or has received written notice of such default in the
manner contemplated by Section 105.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
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order, bond, debenture, note, other evidence of indebtedness, or other paper or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors shall be sufficiently evidenced by a Board
Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering, or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its choice (and
such counsel may be counsel to the Company or any of its Affiliates and may
include any of its employees) and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered, or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such Holders
shall have offered to the Trustee reasonable security or indemnity satisfactory
to it against the costs, expenses, and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness, or other paper or document, but
the Trustee, in its sole discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records, and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney appointed with due care by it
hereunder; and
(h) any application by the Trustee for written instructions
from the Company may, at the option of the Trustee, set forth in writing any
action proposed to be taken or omitted by the Trustee under this Indenture and
the date on and/or after which such action shall be taken or such omission shall
be effective. The Trustee shall not be liable to the Company for any action
taken by, or omission of, the Trustee in accordance with a proposal included in
such application on or after the date specified in such application (which date
shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to any earlier date) unless prior to taking any such action
(or the effective date in the case of an omission), the Trustee shall have
received written instructions in response to such application specifying the
action to be taken or omitted.
(i) in the event that the Trustee is also acting as Paying
Agent, Security Registrar, or transfer agent hereunder, the rights and
protections afforded to the Trustee pursuant to this Article Six shall also be
afforded to such Paying Agent, Security Registrar, or transfer agent.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except
the Trustee's certificates of authentication, shall be taken as the statements
of the Company, and neither the Trustee, nor any Authenticating Agent assumes
any responsibility for their correctness. The Trustee makes no representations
as to the validity or sufficiency of this Indenture or of the Securities,
neither the Trustee nor any Authenticating Agent shall be accountable for the
use or application by the Company of Securities or the proceeds thereof.
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SECTION 605. Trustee and Other Agents may Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar, or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar, or such other agent. Money held by the Trustee in trust
hereunder shall not be invested by the Trustee pending distribution thereof to
the holders of the Securities.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 607. Compensation; Reimbursement; and Indemnity.
The Company, as issuer of the Securities, agrees:
(1) to pay to the Trustee from time to time such reasonable
compensation as the Company and the Trustee shall from time to time agree in
writing for all services rendered by it hereunder (which compensation shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(2) except as otherwise expressly provided herein, to
reimburse the Trustee upon its request for all reasonable expenses,
disbursements, and advances incurred or made by the Trustee in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except any such expense,
disbursement, or advance as may be attributable to its negligence or bad faith;
and
(3) to indemnify each of the Trustee and any predecessor
Trustee and their respective officers, directors, employees, and agents, for,
and to hold it harmless against, any and all loss, damage, claim, liability, or
expense, including taxes (other than taxes based on the income, revenues, or
gross receipts of the Trustee) incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this trust or the trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to
compensate the Trustee, to pay or reimburse the Trustee for expenses,
disbursements, and advances, and to indemnify and hold harmless the Trustee
shall constitute additional indebtedness hereunder and shall survive the
satisfaction and discharge of this Indenture. As security for the performance of
such obligations of the Company, the Trustee shall have a lien prior to the
Securities upon all property and lands held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premiums, if
any, on) or interest (including any Additional Interest) on particular
Securities.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 501(4) or Section
501(5), the expenses (including the reasonable charges and expenses of its
agents and counsel) and the compensation for the services are intended to
constitute expenses of administration under any applicable federal or state
liquidation, insolvency, or other similar law.
The provisions of this Section shall survive the termination
of this Indenture or the resignation or removal of the Trustee.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
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SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and has its Corporate
Trust Office in New York, New York. If such Person publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such Person shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section, it shall resign immediately in the manner
and with the effect hereinafter specified in this Article.
Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company shall serve
as Trustee for the Securities of any series issued hereunder.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 611.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of one or more series by Act of the Holders of a majority in
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of removal, the removed Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation, or liquidation, then, in any such case,
(i) the Company by a Board Resolution may remove the Trustee with
respect to the Securities of all series issued hereunder, or (ii)
subject to Section 514, any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee with respect to the Securities of all
series issued hereunder and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed, or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to Securities of one or more series, the Company, by a
Board Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal, or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment, become
the successor Trustee with respect to such
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series and supersede the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any series shall have been
so appointed by the Company or the Holders and accepted appointment in the
manner hereinafter provided, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
to all Holders in the manner provided in Section 106. Each notice shall include
the name of the successor Trustee with respect to the Securities of such series
and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) Every successor Trustee appointed hereunder with respect
to all Securities shall execute, acknowledge, and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed, or conveyance, shall become
vested with all the rights, powers, trusts, and duties of the retiring Trustee;
provided that, on request of the Company or the successor Trustee, such retiring
Trustee shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers, and trusts of the
retiring Trustee and shall duly assign, transfer, and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each successor Trustee with respect to the
Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and conform to, and to vest in, each successor Trustee all the
rights, powers, trusts, and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts, and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trust hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Truster
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed, or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer, and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
or such successor Trustee relates.
(c) Upon acceptance of appointment by a successor Trustee as
provided in this Section 611, the Company shall mail notice of the succession of
such Trustee hereunder to the Holders of the Securities as they appear on the
Security Register. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers, and trusts
referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless
at the time of such acceptance such successor Trustee shall be qualified and
eligible under this Article. The Trustee shall not be liable for the acts or
omissions of any successor Trustee. The Trustee shall be paid all amounts owed
to it upon its resignation or removal.
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SECTION 612. Merger, Conversion, Consolidation, or Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion, or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Securities shall have been
authenticated, but not made available for delivery, by the Trustee then in
office, any successor by merger, conversion, or consolidation to such
authenticating Trustee may adopt such authentication and make available for
delivery the Securities so authenticated with the same effect as if such
successor Trustee had itself authenticated such Securities.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or becomes a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities, which shall be authorized to act on
behalf of the Trustee to authenticate Securities or such series issued upon
original issue and upon exchange, registration of transfer, or partial
redemption thereof, or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Securities by the Trustee or the Trustee's certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States of America, or of any State
or Territory thereof, or the District of Columbia, authorized under such laws to
act as Authenticating Agent, having a combined capital and surplus of not less
than $50,000,000 and subject to supervision or examination by federal or state
authority. If such Authenticating Agent publishes reports of condition at least
annually, pursuant to law or to the requirements of such supervising or
examining authority, then for the purposes of this Section the combined capital
and surplus of such Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in the Section.
Any corporation into which an Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion, or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of an Authenticating Agent
shall be the successor Authenticating Agent hereunder, provided such corporation
shall be otherwise eligible under this Section, without the execution or filing
of any paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustees and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent, which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 106 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers, and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provision of this Section.
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The Company agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its service under this Section.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in certificate of authentication in the following form:
This is one of the Securities of the series designed therein
referred to in the within mentioned Indenture.
Dated: The Chase Manhattan Bank,
As Trustee
By:
-------------------------------
As Authenticating Agent
By:
---------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee (a) semi-annually, not later than June 30 and December 31 in each year,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders to the extent the Company has knowledge thereof as of a
date not more than 15 days prior to the delivery thereof, and (b) at such other
times as the Trustee may request in writing, within 30 days after the receipt by
the Company of any such request, a list of similar form and content as of a date
not more than 15 days prior to the time such list is furnished, excluding from
any such list names and addresses received by the Trustee in its capacity as
Security Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701, and the names
and addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any officer, director, employee, or agent of either of them shall be
held accountable by reason of any disclosure of information as to names and
addresses of Holders made pursuant to the Trust Indenture Act.
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SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders no later than 60
days after May 15 of each year commencing in 1999 such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee, in writing, when the Securities are listed on
any stock exchange.
SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents, and other reports, and
such summaries thereof, as may be required pursuant to the Trust Indenture Act
at the times and in the manner provided pursuant to such Act; provided that any
such information, documents, or reports required to be filed with the Commission
pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934
shall be filed with the Trustee within 15 days after the same is so required to
be filed with the Commission. Delivery of such reports, information, and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER, OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
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, unless:
(1) the Person formed by such consolidation or into which the
Company is merged or the Person that acquires by conveyance or
transfer, or which leases, the properties and assets of the Company
substantially as an entirety shall be a corporation, partnership, or
trust, shall be organized and existing under the laws of the United
States of America or any State or the District of Columbia, and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and
interest (including any Additional Interest) on all the Securities and
the performance of every covenant of this Indenture on the part of the
Company to be performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event which, after notice or lapse of time, or
both, would become an Event of Default, shall have happened and be
continuing;
(3) for so long as Securities registered on the Securities
Register in the name of the Trust (or the Property Trustee) are
outstanding, such consolidation, merger, conveyance, transfer, or lease
is permitted under the Declaration and the Guarantee and does not give
rise to any breach or violation of the Declaration or the Guarantee;
(4) any such lease shall provide that it will remain in effect
so long as any Securities of a series are Outstanding; and
(5) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer, or lease and any such
supplemental
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indenture complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied
with; and the Trustee, subject to Section 601, may rely upon such
Officers' Certificate and Opinion of Counsel as conclusive evidence
that such transaction complies with this Section 801.
SECTION 802. Successor Person Substituted.
Upon any consolidation or merger by the Company with or into
any other Person, or any conveyance, transfer, or lease by the Company of its
properties and assets substantially as an entirety to any Person in accordance
with Section 801, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer, or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein; and, in the event of any
such conveyance, transfer, or lease the Company shall be discharged from all
obligations and covenants under the Indenture and the Securities and may be
dissolved and liquidated.
Such successor Person may cause to be signed, and may issue
either in its own name or in the name of the Company, any or all of the
Securities issuable hereunder which theretofore shall not have been signed by
the Company and delivered to the Trustee; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions, and
limitations in this Indenture prescribed, the Trustee shall authenticate, upon
receipt of a Company Order for the authentication, and shall make available for
delivery any Securities which previously shall have been signed and delivered by
the officers of the Company to the Trustee for authentication pursuant to such
provisions and any Securities which such successor Person thereafter shall cause
to be signed and delivered to the Trustee on its behalf for the purpose pursuant
to such provisions. All the Securities so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Securities theretofore
or thereafter issued in accordance with the terms of this Indenture as though
all of such Securities had been issued at the date of the execution hereof.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the
Company and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to convey, transfer, assign, mortgage, or pledge any
property to or with the Trustee or to surrender any right or power herein
conferred upon the Company; or
(3) to establish the form and terms of Securities of any
series as permitted by Article Two or Section 301; or
(4) to add to the covenants of the Company for the benefit of
the Holders of all or any series of the Securities (and if such covenants are to
be for the benefit of less than all series of Securities, stating that such
covenants are expressly being included solely for the benefit of the series
specified), or to surrender any right or power herein conferred upon the
Company; or
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(5) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional Events of
Default are to be for the benefit of less than all series of Securities, stating
that such additional Events of Default are expressly being included solely for
the benefit of the series specified); or
(6) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall (a) become
effective only when there is no Security Outstanding of any series created prior
to the execution of such supplemental indenture that is entitled to the benefit
of such provision or (b) not apply to any Outstanding Securities; or
(7) to cure any ambiguity or defect, to correct or supplement
any provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture which shall not be inconsistent with the provisions of this
Indenture, provided that such action pursuant to this clause (7) shall not
adversely affect the interests of the Holders of the Securities of any series
or, so long as any of the corresponding series of Capital Securities shall
remain Outstanding, the holders of the Capital Securities; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of Section
611(b); or
(9) to comply with any requirement of the Commission in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental Indenture, by Act of said Holders delivered to the Company and the
Trustee, the Company, when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or of modifying in any manner the rights of the
Holders of such series of Securities under this Indenture; provided, however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Security of each series affected thereby,
(1) change the Stated Maturity of, the principal of, or any
installment of interest (including any Additional Interest) on, any Security, or
reduce the principal amount thereof or the rate of interest thereon or extend
the time of payment of interest thereon (except such extension as is
contemplated hereby), or change the place of payment where, or the coin or
currency in which, any Security or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption, on or after the
Redemption Date), or modify the provisions of this Indenture with respect to the
subordination of the Securities in a manner adverse to the Holders,
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is required
for any such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513
or Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Security affected thereby;
provided, that, so long as any of the Capital Securities of a series issued to a
Trust remains outstanding, no such amendment shall be made that adversely
affects the holders of the Capital Securities in any material respect, and no
termination of this Indenture shall occur, and no waiver of any Event of Default
or compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of at least a majority of the aggregate
liquidation preference of such outstanding Capital
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Securities unless and until the principal of and any premium on the Securities
of such series and all accrued and unpaid interest (including any Additional
Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any
covenant or other provisions of this Indenture that has expressly been included
solely for the benefit of one or more particular series of Securities or any
corresponding series of Capital Securities of a Trust that holds the securities
of any series, or that modifies the rights of the Holders of Securities of such
series or holders of such Capital Securities of such corresponding series with
respect to such covenant or other provision, shall be deemed not to affect the
rights under this Indenture of the Holders of Securities of any other series or
holders of Capital Securities of any other such corresponding series.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trust created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into such supplemental indenture which affects the Trustee's
own rights, duties, or immunities under this Indenture or otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 905. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture may be prepared and
executed by the Company and authenticated, upon receipt of a Company Order for
the authentication, and made available for delivery by the Trustee in exchange
for Outstanding Securities of such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture
and comply with all other terms and conditions and agreements contained herein.
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SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in the City of New York for any
series of Securities an office or agency where Securities of that series may be
presented or surrendered for registration of transfer or exchange, where
Securities may be surrendered for conversion and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in location, of such office or agency. If at any time
the Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices, and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the Trustee as its agent
to receive all such presentations, surrenders, notices, and demands.
The Company may also from time to time designate one or more
other offices or agencies in the United States where the Securities may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Company of its obligation to maintain
an office or agency in the United States for Securities of any series for such
purposes. The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on, or at the option of the
Company, before each due date of the principal of (and premium, if any) or
interest on any of the Securities of such series, segregate and hold in trust
for the benefit of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
will promptly notify the Trustee, in writing, of its action or failure so to
act. In such case the Company shall not invest the amount so segregated and held
in trust pending the distribution thereof.
Whenever the Company shall have one or more Paying Agents, it
will, on or prior to each due date of the principal of (and premium, if any) or
interest (including any Additional Interest) on any Securities, deposit with a
Paying Agent a sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee, in writing, of its action
or failure so to act; provided, however, that any such deposit on a due date
shall be made no later than 10:00 a.m. (New York time) on the due date in
same-day funds.
The Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provisions of this Section,
that such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect to any Security of a series, upon the written
request of the Trustee, forthwith pay to the Trustee all sums held in trust by
such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
the trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal or interest
(including any Additional Interest) or any Security that has become due and
payable shall be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust, if such principal or interest has
not been claimed by the Holder of the Security upon which such payments are due
with in one year of the date such principal and interest became due and payable;
and the Holder of such Security shall thereafter, as an unsecured general
creditor, look only to the Company for payment thereof, and
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all liability of the Trustee and its officers, directors, employees, and agents
or such Paying Agent and its officers, directors, employees, and agents with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such publication, any unclaimed
balance of such money then remaining will be repaid to the Company.
SECTION 1004. Statements by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the material terms, provisions, and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder) and,
if the Company shall be in default, specifying all such defaults and the nature
and status thereof of which they may have knowledge.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
existence, rights (charter and statutory), and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors shall determine that the preservation thereof is no
longer desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders and, while
any Capital Securities are Outstanding, the holders of the Capital Securities.
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair, and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterment, and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company from
discontinuing the operation or maintenance of any such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes, assessments,
and governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits, or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials, and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary that
comprise more than 10% of the assets of the Company and its Subsidiaries, taken
as a whole; provided, however, that the Company shall not be required to pay or
discharge or cause to be paid or discharged any such tax, assessment, charge, or
claim whose amount, applicability, or validity is being contested in good faith
by appropriate proceedings.
SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified or as contemplated by Section
301 for Securities, the Company may, with respect to the Securities, omit in any
particular instance to comply with any term, provision, or condition set forth
in any covenant provided pursuant to Section 901(3) or 901(4) for the benefit of
the Holders if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities shall, by Act
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of such Holders, either waive such compliance in such instance or generally
waive compliance with such term, provision, or condition, but no waiver shall
extend to or affect such term, provision, or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision, or condition shall remain in full force and effect.
SECTION 1009. Payment of the Trust's Costs and Expenses.
Since the Trust is being formed solely to facilitate an
investment in the Securities, the Company, as borrower, hereby covenants to pay
all debts and obligations (other than with respect to the Capital Securities and
Common Securities) and all costs and expenses of the Trust (including, but not
limited to, all costs and expenses relating to the organization of the Trust,
the fees and expenses of the Trustees and their agents and counsel, and all
costs and expenses relating to the operation of the Trust) and to pay any and
all taxes, duties, assessments, or governmental charges of whatever nature
(other than withholding taxes) imposed on the Trust by the United States, or any
other taxing authority, so that the net amounts received and retained by the
Trust and the Property Trustee after paying such expenses will be equal to the
amounts the Trust and the Property Trustee would have received had no such costs
or expenses been incurred by or imposed on the Trust, provided that the Trust is
the holder of the Junior Subordinated Debentures. The foregoing obligations of
the Company are for the benefit of, and shall be enforceable by, any person to
whom any such debts, obligations, costs, expenses, and taxes are owed (each, a
"Creditor") whether or not such Creditor has received notice thereof. Any such
Creditor may enforce such obligations of the Company directly against the
Company, and the Company irrevocably waives any right or remedy to require that
any such Creditor take any action against the Trust or any other person before
proceeding against the Company. The Company shall execute such additional
agreements as may be necessary or desirable to give full effect to the
foregoing.
SECTION 1010. Restrictions on Payments and Distributions.
The Company covenants and agrees with each Holder of
Securities of each series that it will not, and will not permit any Subsidiary
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, (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 Securities, or (iii) make any
guarantee payments with respect to any guarantee by the Company of the debt
securities of any Subsidiary if such guarantee ranks pari passu with or junior
in interest to the Securities (other than (a) repurchases, redemptions, or other
acquisitions of shares of capital stock of the Company in connection with any
employment contract, benefit plan, or other similar arrangement with or for the
benefit of any one or more employees, officers, directors, or consultants or in
connection with a dividend reinvestment or stockholder stock purchase plan or in
connection with the issuance of common stock (or securities convertible into or
exchangeable for common stock) as consideration in an acquisition transaction
that was entered into prior to the commencement of an Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Company's
capital stock (or any capital stock of a subsidiary of the Company) for any
class or series of the Company's capital stock or of any class or series of the
Company's indebtedness for any class or series of the Company's capital stock,
(c) the purchase of fractional interests in shares of the Company's capital
stock pursuant to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock,
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options, or other rights where the dividend stock or stock issuable
upon exercise of such warrants, options, or other rights is the same stock as
that on which the dividend is being paid or ranks pari passu with or junior to
such stock) if at such time (x) there shall have occurred any event of which the
Company has actual knowledge that (I) with the giving of notice or the lapse of
time, or both, would constitute an Event of Default and (II) in respect of which
the Company shall not have taken reasonable steps to cure, (y) the Company shall
be in default with respect to its payment of any obligations under the Guarantee
or (z) the Company shall have given notice of its election of an Extension
Period as provided herein and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a
series issued to a Trust (i) to hold, directly or indirectly, 100% of the Common
Securities of such Trust, provided that any permitted successor of the Company
hereunder may succeed to the Company's ownership of such Common Securities, (ii)
as holder of such
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Common Securities, not to voluntarily terminate, wind-up, or liquidate such
Trust, other than (a) in connection with a distribution of the Securities of
such series to the holders of the related Capital Securities in liquidation of
such Trust, or (b) in connection with certain mergers, consolidations, or
amalgamation permitted by the related Declaration, and (iii) to use its
reasonable efforts, consistent with the terms and provisions of such
Declaration, to cause such Trust to continue not to be taxable as a company for
United States federal income tax purposes.
SECTION 1011. Original Issue Discount.
For each year during which any Securities that were issued
with original issue discount are Outstanding, the Company shall furnish to each
Paying Agent in a timely fashion, but no later than fifteen (15) days prior to
the date on which the Paying Agent is required to file Internal Revenue Service
Forms 1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of
1986, as amended, such information as may be requested by each Paying Agent in
order that each Paying Agent may prepare the information which it is required to
report for such year on Internal Revenue Service Forms 1096 and 1099 pursuant to
Section 6049 of the Internal Revenue Code of 1986, as amended. Such information
shall include the amount of original issue discount includible in income for
each $1,000 of principal amount at Stated Maturity of Outstanding Securities
during such year.
SECTION 1012. Additional Sums.
In the case of the Securities of a series initially issued to
a Trust, so long as no Event of Default has occurred and is continuing and
except as otherwise specified as contemplated by Section 301, if (i) a Trust is
the Holder of all the Outstanding Securities of such series, and (ii) a Tax
Event has occurred and is continuing in respect of such Trust, the Company shall
pay to such Trust (and its permitted successors or assigns under the related
Declaration) for so long as such Trust (or its permitted successor or assignee)
is the registered holder of the Outstanding Securities of such series, such
additional sums as may be necessary in order that the amount of Distributions
(including any Additional Amounts (as defined in such Declaration)) then due and
payable by such Trust on the related Capital Securities and Common Securities
that at any time remain outstanding in accordance with the terms thereof shall
not be reduced as a result of any Additional Taxes arising from such Tax Event
(the "Additional Sum"). Whenever in this Indenture or the Securities there is a
reference in any context to the payment of principal of or interest on the
Securities, such mention shall be deemed to include mention of the payments of
the Additional Sums provided for in this paragraph to the extent that, in such
context, Additional Sums are, were, or would be payable in respect thereof
pursuant to the provisions of this paragraph and express mention of the payment
of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 311 or the Securities shall not defer the
payment of any Additional Sums that may be due and payable.
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a
Security, by his acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article (subject to
Article Four), the payment of the principal of and interest on each and all of
the Securities of each and every series are hereby expressly made subordinate
and subject in right of payment to the prior payment in full in cash of all
Senior Indebtedness.
The provisions of this Article Eleven are made for the benefit
of the holders of Senior Indebtedness and such holders are made obligee
hereunder and any one or more of them may enforce such provisions. Holders of
Senior Indebtedness need not prove reliance on the subordination provisions
hereof.
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SECTION 1102. Default on Senior Indebtedness.
In the event and during the continuation of any default in the
payment of principal, premium, interest, or any other payment due on any Senior
Indebtedness, or in the event that any event of default with respect to any
Senior Indebtedness shall have occurred and be continuing and shall have
resulted in such Senior Indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable
(unless and until such event of default shall have been cured or waived or shall
have ceased to exist and such acceleration shall have been rescinded or
annulled) or in the event any judicial proceeding shall be pending with respect
to any such default in payment or such event of default, then no payment shall
be made by the Company with respect to the principal (including redemption
payments) of, or interest on, any of the Securities.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by the preceding paragraph of this Section 1102, 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, 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.
SECTION 1103. Prior Payment of Senior Indebtedness Upon Acceleration of
Securities.
In the event that the Securities are declared due and payable
before their Stated Maturity, then and in such event the holders of the Senior
Indebtedness outstanding at the time such Securities so become due and payable
shall be entitled to receive payment in full of all amounts then due on or in
respect of such Senior Indebtedness (including any amounts due upon
acceleration), or provision shall be made for such payment in cash or cash
equivalents or otherwise in a manner satisfactory to the holders of Senior
Indebtedness, before the Holders of the Securities are entitled to receive any
payment or distribution of any kind or character, whether in cash, properties or
securities, by the Company on account of the principal of or interest on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary; provided, however, that holders of Senior
Indebtedness shall not be entitled to receive payment of any such amounts to the
extent that such holders would be required by the subordination provisions of
such Senior Indebtedness to pay such amounts over to the obligee on trade
accounts payable or other liabilities arising in the ordinary course of the
Company's business.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee or any Holder when such payment is prohibited
by the preceding paragraph of this Section 1103, 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, 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.
SECTION 1104. Liquidation; Dissolution.
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 insolvency, receivership,
or other proceedings, all principal of, and premium, if any, and interest due or
to become due upon all Senior Indebtedness (including interest after the
commencement of any insolvency, receivership, or other proceedings at the rate
specified in the applicable Senior Indebtedness, whether or not such interest is
an allowable claim in any such proceeding) shall first be paid in full, or
payment thereof provided for in money in accordance with its terms, before any
payment is made on account of the principal or interest on the Securities; and
upon any such dissolution or winding-up or liquidation or reorganization any
payment by the Company, or distribution of substantially all of the assets of
the Company of any kind or character, whether in cash, property, or securities,
to which the Holders of the Securities or the Trustee
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would be entitled, except for the provisions of this Article Eleven, shall be
paid by the Company or by any receiver, liquidating trustee, agent, or other
Person making such payment or distribution, or by the Holders of the Securities
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness (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 any
Senior Indebtedness may have been issued, as their respective interests may
appear, to the extent necessary to pay all Senior Indebtedness in full
(including interest after the commencement of any insolvency, receivership, or
other proceedings at the rate specified in the applicable Senior Indebtedness,
whether or not such interest is in an allowable claim in any such proceeding) or
to provide for such payment in money in accordance with its terms, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the Holders of
Securities or to the Trustee or the Property Trustee on behalf of the Holders of
Capital Securities; provided, however, that such holders of Senior Indebtedness
shall not be entitled to receive payment of any such amounts to the extent that
such holders would be required by the subordination provisions of such Senior
Indebtedness to pay such amounts over to the obligee on trade accounts payable
or other liabilities arising in the ordinary course of the Company's business.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property, or securities, prohibited by the foregoing, shall be received by
the Trustee or the Holders of the Securities before all Senior Indebtedness is
paid in full (including interest after commencement of any insolvency,
receivership, or other proceedings at the rate specified in the applicable
Senior Indebtedness, whether or not such interest is an allowable claim in any
such proceeding), or provision is made for such payment in money in accordance
with its terms, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Any holder of Senior Indebtedness may file any proof of claim
or similar instrument on behalf of the Trustee and the Holders if such
instrument has not been filed by the date which is 30 days prior to the date
specified for filing thereof.
For purposes of this Article Eleven, 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
company provided for by a plan of reorganization or readjustment, the payment of
which is subordinated at least to the extent provided in this Article Eleven
with respect to the Securities to the payment of all Senior Indebtedness that
may at the time be outstanding, provided, however, that (i) the Senior
Indebtedness is assumed by the new company, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of the Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or merger
of the Company into, another company 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 company upon the terms and conditions
provided for in Article Eight hereof shall not be deemed a dissolution,
winding-up, liquidation, or reorganization for the purposes of this Section 1104
if such other company shall, as a part of such consolidation, merger,
conveyance, or transfer, comply with the conditions stated in Article Eight
hereof. Nothing in Section 1103 or in this Section 1104 shall apply to claims
of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1105. Subrogation.
Subject to the payment in full of all Senior Indebtedness to
the extent provided in Sections 1103 and 1104, the rights of the Holders of the
Securities shall be subrogated to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property, or
securities of the Company applicable to the Senior Indebtedness until the
principal of (and premium, if any) and interest on the Securities shall be paid
in full; and, for the purposes of such subrogation, no payments or distributions
to the holders of the Senior Indebtedness of any cash,
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property, or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article Eleven, shall, as
between the Company, its creditors other than holders of Senior Indebtedness,
and the Holders of the Securities, be deemed to be a payment by the Company to
or on account of the Senior Indebtedness. It is understood that the provisions
of this Article Eleven are and are intended solely for the purposes of defining
the relative rights of the Holders of the Securities, on the one hand, and the
holders of the Senior Indebtedness on the other hand.
Nothing contained in this Article Eleven or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior Indebtedness, and the
Holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest on the Securities as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Securities and creditors
of the Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the Holder of any Security
from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article Eleven
of the holders of Senior Indebtedness in respect of cash, property, or
securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article Eleven, the Trustee, subject to the provisions of
Section 601, and the Holders of the Securities, shall be entitled to rely
conclusively 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,
liquidation trustee, agent, or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of the Securities, for the purposes
of ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon, and all other facts pertinent thereto or to this Article Eleven.
SECTION 1106. Trustee to Effectuate Subordination.
Each Holder of a Security by acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate in the sole and absolute discretion of the Trustee to
effectuate the subordination provided in this Article Eleven and appoints the
Trustee such Holder's attorney-in-fact for any and all such purposes.
SECTION 1107. Notice by the Company.
The Company shall give prompt written notice to a Responsible
Officer of the Trustee of any fact known to the Company that would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article Eleven. Notwithstanding
the provisions of this Article Eleven 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 Securities pursuant to the provisions of this Article Eleven,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office of the Trustee from the
Company or a holder or holders of Senior Indebtedness or from any trustee
therefor; and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 601, 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 1107 at least three
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 Security), then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to receive such money and to apply the same to the
purposes for which they were received, and shall not be affected by any notice
to the contrary that may be received by it within three Business Days prior to
such date.
The Trustee, subject to the provisions of Section 601, shall
be entitled to rely conclusively on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
on behalf of such holder) to establish that such notice has been given by a
holder of Senior Indebtedness or a trustee
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on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article Eleven, the Trustee may request
such Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of Senior Indebtedness held by such Person, the extent to which
such Person is entitled to participate in such payment or distribution and any
other facts pertinent to the rights of such Person under this Article Eleven,
and if such evidence is not furnished the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 1108. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article Eleven 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.
With respect to the holders of Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article Eleven, and no implied
covenants or obligations with respect to the holders of 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 Senior Indebtedness and,
subject to the provisions of Section 601, the Trustee shall not be liable to any
holder of Senior Indebtedness if it shall pay over or deliver to holders of
Securities, the Company, or any other Person money or assets to which any holder
of Senior Indebtedness shall be entitled by virtue of this Article Eleven or
otherwise.
SECTION 1109. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Company 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.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place, or terms of payment or extend the time of payment of, or renew or alter,
Senior Indebtedness or otherwise amend or supplement in any manner Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (ii) sell, exchange, release, or otherwise
deal with any property pledged, mortgaged, or otherwise securing Senior
Indebtedness; (iii) release any Person liable in any manner for the collection
of Senior Indebtedness; and (iv) exercise or refrain from exercising any rights
against the Company and any other Person.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Applicability of this Article.
Redemption of Securities of any series (whether by operation
of a sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of such form
of Security shall conflict with any provision of this Article, the provision of
such form of Security shall govern. Except as otherwise set forth in the form of
Security for such series, each Security of a series shall be subject to partial
redemption only in the amount of $1,000 or any integral multiple thereof.
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SECTION 1202. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities of a
series shall be evidenced by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 45 days
(unless a shorter notice shall be satisfactory to the Trustee) and no more than
60 days prior to the Redemption Date fixed by the Company, notify the Trustee
and, in the case of Securities of a series held by a Trust, the Property Trustee
under the related Declaration, in writing, of such Redemption Date and of the
principal amount of Securities of the applicable series to be redeemed and
provide a copy of the notice of redemption given to Holders of Securities to be
redeemed pursuant to Section 1204. In the case of any redemption of Securities
prior to the expiration of any restriction on such redemption provided in the
terms of such Securities, the Company shall furnish the Trustee with an
Officers' Certificate and an Opinion of Counsel evidencing compliance with such
restriction.
SECTION 1203. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities of any series are to be
redeemed, the particular Securities to be redeemed shall be selected by lot (or
such other method of selection as the Trustee may customarily employ) not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption.
The Trustee shall promptly notify the Company in writing of
the Securities selected for redemption as aforesaid and, in case of any
Securities selected for partial redemption as aforesaid, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Securities which has been
or is to be redeemed.
SECTION 1204. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 (provided that the Trustee shall itself
have received notice not less than 45 days prior to the Redemption Date) nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to
be redeemed, at his address appearing in the Security Register.
All notices of redemption shall identify the Securities of
such series to be redeemed (including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price together with a statement that it is
an estimate and that the actual Redemption Price will be calculated on
the third Business Day prior to the Redemption Date (and if an
estimated is provided, a further notice shall be sent of the actual
Redemption Price on the date that such Redemption Price is calculated),
(3) if less than all Outstanding Securities of such particular
series are to be redeemed, the identification (and in the case of a
partial redemption, the respective principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed or
portion thereof and that interest thereon (including Additional
Interest) will cease to accrue on and after such date,
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price,
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(6) that the redemption is for a sinking fund, if such is the
case, and
(7) such other provisions as may be required in respect of the
terms of a particular series of Securities.
Notice of redemption of Securities to be redeemed at the
election of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company and shall
be irrevocable. The notice if mailed in the manner provided above shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 1205. Deposit of Redemption Price.
On or prior to the Redemption Date specified in the notice of
redemption given as provided in Section 1204, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest (including any
Additional Interest) on, all the Securities which are to be redeemed on that
date; provided, however, that any such deposit on a Redemption Date shall be
initiated no later than 11:00 a.m. (New York time) in same-day funds.
SECTION 1206. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest (including any Additional Interest)) such Securities shall
cease to bear interest. Upon surrender of any such Security for redemption in
accordance with such notice, such Security shall be paid by the Company at the
Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate borne by the Security.
SECTION 1207. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at a place of payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
therefor or his attorney duly authorized in writing), and the Company shall
execute, and the Trustee shall authenticate, upon receipt of a Company Order for
the authentication, and deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
In case of the Securities of a series initially issued to a
Trust, except as otherwise specified as contemplated by Section 301, the
Company, at its option and subject to receipt of prior approval by the Federal
Reserve if such approval is then required under applicable capital guidelines or
policies, may redeem such Securities (i) on or after the date specified in such
Security, in whole at any time or in part from time to time, or (ii) upon the
occurrence and during the continuation of a Special Event, at any time within 90
days following the occurrence and during the continuation of such Special Event,
in whole (but not in part), in each case at a Redemption Price of 100% unless
specified in such Security, together with accrued and unpaid interest (including
any Additional Interest) to the Redemption Date.
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If less than all the Securities of any such series are to be
redeemed, the aggregate principal amount of such Securities remaining
Outstanding after giving effect to such redemption shall be sufficient to
satisfy any provisions of the Declaration related to the Trust to which such
Securities were issued, including any requirement in such Declaration as to the
minimum Liquidation Amount (as defined in such Declaration) of Capital
Securities that may be held by a holder of Capital Securities thereunder.
ARTICLE THIRTEEN
SINKING FUNDS
SECTION 1301. Applicability of Article.
The provisions of this Article shall be applicable to any
sinking fund for the retirement of Securities of any series except as otherwise
specified as contemplated by Section 301 for such Securities.
The minimum amount of any sinking fund payment provided for by
the terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 1302. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 1302. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund
payment with respect to any Securities of a series in cash, the Company may at
it option, at any time no more than 16 months and no less than 45 days prior to
the date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Company, except Securities of such series that have been redeemed through the
application of mandatory or optional sinking fund payments pursuant to the terms
of the Securities of such series, accompanied by a Company Order instructing the
Trustee to credit such obligations and stating that the Securities of such
series were originally issued by the Company by way of bona fide sale or other
negotiation for value; provided that the Securities to be so credited have not
been previously so credited. The Securities to be so credited shall be received
and credited for such purpose by the Trustee at the redemption price for such
Securities, as specified in the Securities so to be redeemed, for redemption
through operation of the sinking fund and the amount of such sinking fund
payment shall be reduced accordingly.
SECTION 1303. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date
for any series of Securities, the Company will deliver to the Trustee an
Officers' Certificate specifying the amount of the next ensuing sinking fund
payment for such Securities pursuant to the terms of such Securities, the
portion thereof, if any, which is to be satisfied by payment of cash in the
currency in which the Securities of such series are payable (except as provided
pursuant to Section 301) and the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities pursuant to Section 1302 and
will also deliver to the Trustee any Securities to be so delivered. Such
Officers' Certificate shall be irrevocable and upon its delivery the Company
shall be obligated to make the cash payment or payments therein referred to, if
any, on or before the succeeding sinking fund payment date. In the case of the
failure of the Company to deliver such Officers' Certificate (or, as required by
this Indenture, the Securities and coupons, if any, specified in such Officers'
Certificate) by the due date hereof, the sinking fund payment due on the
succeeding sinking fund payment date for such series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of the Securities of
such series subject to a mandatory sinking fund payment without the right to
deliver or credit securities as provided in Section 1302 and without the right
to make the optional sinking fund payment with respect to such series at such
time.
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Any sinking fund payment or payments (mandatory or optional)
made in cash plus any unused balance of any preceding sinking fund payments made
with respect to the Securities of any particular series which unused balance
shall not include funds allocated to a preceding sinking fund for which the
related Securities have not been presented for payment shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the Redemption Price specified in such Securities with respect
to the sinking fund. Any and all sinking fund moneys with respect to the
Securities of any particular series held by the Trustee (or if the Company is
acting as its own Paying Agent, segregated and held in trust as provided in
Section 1003) on the last sinking fund payment date with respect to Securities
of such series and not held for the payment or redemption of particular
Securities of such series shall be applied by the Trustee (or by the Company if
the Company is acting as its own Paying Agent), together with other moneys, if
necessary, to be deposited (or segregated) sufficient for the purpose, to the
payment of the principal of the Securities of such series at Maturity. The
Trustee shall select the Securities to be redeemed upon such sinking fund
payment date in the manner specified in Section 1203 and cause notice of the
redemption thereof to be given in the name of and at the expense of the Company
in the manner provided in Section 1204. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1206 and 1207. On or before each sinking fund payment date,
the Company shall pay to the Trustee (or, if the Company is acting as its own
Paying Agent, the Company shall segregate and hold in trust as provided in
Section 1003) in cash a sum in the currency in which Securities of such series
are payable (except as provided pursuant to Section 301) equal to the principal
(and premium, if any) and any interest (including any Additional Interest)
accrued to the Redemption Date for Securities or portions thereof to be redeemed
on such sinking fund payment date pursuant to this Section 1303.
Neither the Trustee nor the Company shall redeem any
Securities of a series with sinking fund moneys or mail any notice of redemption
of Securities of such series by operation of the sinking fund for such series
during the continuance of a default in payment of interest, if any, on any
Securities of such series or of any Event of Default (other than an Event of
Default occurring as a consequence of this paragraph) with respect to the
Securities of such series OF WHICH A RESPONSIBLE OFFICER OF THE TRUSTEE HAS
ACTUAL KNOWLEDGE, except that if the notice of redemption shall have been
provided in accordance with the provisions hereof, the Trustee (or the Company,
if the Company is then acting as its own Paying Agent) shall redeem such
Securities if cash sufficient for that purpose shall be deposited with the
Trustee (or segregated by the Company) for that purpose in accordance with the
terms of this Article Thirteen. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur and any moneys thereafter paid into such sinking fund shall, during the
continuance of such default or Event of Default, be held as security for the
payment of the Securities and coupons, if any, of such series; provided,
however, that in case such default or Event of Default shall have been cured or
waived herein, such moneys shall thereafter be applied on the next sinking fund
payment date for the Securities of such series on which such moneys may be
applied pursuant to the provisions of this Section 1303.
This instrument may be executed in any number of counterparts,
each of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
49
<PAGE> 59
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, all as of the day and year first above written.
HUNTINGTON BANCSHARES INCORPORATED
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
not in its individual
capacity, but solely as Trustee
By:
------------------------------------
Name:
Title:
50
<PAGE> 60
Exhibit A
HUNTINGTON BANCSHARES INCORPORATED
JUNIOR SUBORDINATED DEBENTURE DUE _____
$---------------
NO. ____
HUNTINGTON BANCSHARES INCORPORATED, a corporation duly
organized and existing under the laws of the State of Maryland (herein called
the "Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay to The
Chase Manhattan Bank, as Trustee, or registered assigns, the principal sum of
_____________________ ($_____________) on ____________, 20___, [if the Security
is a Global Security, then insert, if applicable --, or such other principal
amount represented hereby as may be set forth in the records of the Security
Registrar hereinafter referred to in accordance with the Indenture.] The
Corporation further promises to pay interest on said principal sum from ______,
19___, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, [monthly/ quarterly/ semi-annually] [if applicable,
insert -- (subject to deferral as set forth herein)] in arrears on [insert
applicable Interest Payment Dates] of each year, commencing ________, 19__, at
[a variable annual rate equal to _______ plus .___%/the annual rate of ___%] [if
applicable, insert -- together with Additional Sums, if any, as provided in the
Indenture until the principal hereof is paid or duly provided for or made
available for payment] [ if applicable, insert -- ; provided that any overdue
principal, premium, or Additional Sums and any overdue installment of interest
shall bear Additional Interest at [a variable annual rate equal to _______ plus
.___%/the annual rate of ___%] (to the extent that the payment of such interest
shall be legally enforceable)], compounded [monthly/ quarterly/ semi-annually],
from the dates such amounts are due until they are paid or made available for
payment, and such interest shall be payable on demand. The amount of interest
payable will be computed on the basis of [a 360-day/the actual number of days
elapsed in a] year of twelve 30-day months.
In the event that any date on which interest is payable on this
Security is not a Business Day, then a payment of the 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), except
that, if such Business Day is the next succeeding calendar year, such payment of
the interest payable shall be on the immediately proceeding Business Day, with
the same force and effect as if made on the date the 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 the Securities (or one or more Predecessor
Securities, as defined in the Indenture) is registered at the close of
51
<PAGE> 61
business on the Regular Record Date for such interest installment, which shall
be the fifteenth day of the month of such Interest Payment Date. Any such
interest installment not so punctually paid or duly provided for shall forthwith
cease to be payable to the Holder on such Regular Record Date and may either be
paid to the Person in whose name the Securities for one or more Predecessor
Securities is registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
So long as no Event of Default has occurred and is continuing,
the Company shall have the right at any time during the term of this Security,
from time to time, to defer payment of interest on such Security for up to __
consecutive _________ periods (each, an "Extension Period"), provided that no
Extension Period may extend past the Maturity of this Security. There may be
multiple Extension Periods of varying lengths during the term of this Security.
At the end of each Extension Period, if any, the Company shall pay all interest
then accrued and unpaid, together with interest thereon, compounded _________ at
the rate specified on this Security to the extent permitted by applicable law.
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, (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 Securities, or (iii) make any guarantee payments with respect to any
guarantee by the Company of the debt securities of any subsidiary of the Company
if such guarantee ranks pari passu or junior in interest to the Securities
(other than (a) repurchases, redemptions, or other acquisitions of shares of
capital stock of the Company in connection with any employment contract, benefit
plan, or other similar arrangement with or for the benefit of any one or more
employees, officers, directors, or consultants or in connection with a dividend
reinvestment or stockholder stock purchase plan or in connection with the
issuance of common stock (or securities convertible into or exchangeable for
common stock) as consideration in an acquisition transaction that was entered
into prior to the commencement of such Extension Period), (b) as a result of an
exchange or conversion of any class or series of the Company's capital stock (or
any capital stock of a subsidiary of the Company) for any other class or series
of the Company's capital stock or of any class or series of the Company's
indebtedness for any class or series of the Company's capital stock, (c) the
purchase of fractional interests in shares of the Company's capital stock
pursuant to the conversion or exchange provisions of such capital stock or the
security being converted or exchanged, (d) any declaration of a dividend in
connection with any stockholder's rights plan, or the issuance of rights, stock,
or other property under any stockholder's rights plan, or the redemption or
repurchase of rights pursuant thereto, or (e) any dividend in the form of stock,
warrants, options, or other rights where the dividend stock or the stock
issuable upon exercise of such warrants, options, or other rights is the same
stock as that on which the dividend is being paid or ranks pari passu with or
junior to such stock).
52
<PAGE> 62
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 __ consecutive _________ periods or extend beyond the Stated Maturity
of the Securities. 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 shall give the Trustee notice of its election of such
Extension Period at least one Business Day prior to the record date for the
related interest payment.
Payment of the principal of and interest on this Security will
be made at the office or agency of the Paying Agent maintained for that purpose,
in such coin or currency of the United States of America as at the time of
payment is legal tender for payment of public and private debts; provided,
however, that at the option of the Company, payment of interest may be made (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Security Register or (ii) for Holders of Securities within
an aggregate principal amount of at least $1,000,000, by wire transfer in
immediately available funds at such place and to such account as may be
designated by the Person entitled thereto as specified in the Security Register.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full of all Senior Indebtedness and pari passu with all other
series of Subordinated Debentures issued under the Indenture and the $200
million of obligations of the Company associated with the Outstanding Capital
Securities, and this Security is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Security, 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 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, waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Indebtedness, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of this
Security summarized on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been
executed by the Trustee referred to on the reverse hereof by manual signature,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
53
<PAGE> 63
IN WITNESS WHEREOF, Huntington Bancshares Incorporated has
caused this instrument to be duly executed.
Dated: ____________, ______
HUNTINGTON BANCSHARES INCORPORATED
By:
-----------------------------------
Name:
Title:
54
<PAGE> 64
This Security is one of a duly authorized issue of securities (the
"Securities") of Huntington Bancshares Incorporated (the "Company") issued and
to be issued in one or more series under the Indenture, dated as of June 4, 1998
(the "Indenture"), between the Company and The Chase Manhattan Bank, a New York
banking corporation, as Trustee (the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties, and immunities thereunder of the Trustee,
the Company, the holders of Senior Indebtedness, and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof [if applicable, insert -- limited in principal amount of $____.]
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
At any time on or after ____________, 20__, the Company shall have the
right, subject to the terms and conditions of Article Twelve of the Indenture,
to redeem this Security at the option of the Company, in whole or in part, at a
Redemption Price equal to [100% of the principal amount of such Subordinated
Debenture plus any accrued interest (including any Additional Interest) to but
excluding the Redemption Date/ the following prices, expressed as percentages of
the principal amount thereof, together with accrued interest (including any
Additional Interest) to but excluding the Redemption Date, if redeemed during
the twelve-month period beginning ________________:
Year Redemption Price
---- ----------------
and 100% on or after _________________.]
If a Special Event (as defined in the Indenture) shall occur and be
continuing, the Company shall have the right, subject to the terms and
conditions of Article Twelve of the Indenture, to redeem this Security at the
option of the Company, without premium or penalty, in whole but not in part, at
a Redemption Price equal to 100% of the principal amount so redeemed plus
accrued but unpaid interest (including any Additional Interest) to the
Redemption Date. Any redemption pursuant to this paragraph will be made upon not
less than 30 nor more than 60 days notice, at the Redemption Price. If the
Securities of this series are only partially redeemed by the Company, such
Securities will be redeemed by lot (or such other method of selection as the
Trustee may customarily employ). In the event of redemption of this Security in
part only, a new Security or Securities of this series for the unredeemed
portion hereof will be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default with respect to the Securities shall occur and
be continuing, the principal of the Securities may be declared due and payable
in the manner, with the effect, and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge or
legal defeasance of the entire indebtedness of this Security and for the
defeasance of certain covenants under the Indenture at any time upon compliance
by the Company with certain conditions set forth in the Indenture.
55
<PAGE> 65
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and the of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, insert -- As provided in
and subject to the provisions of the Indenture, if an Event of Default with
respect to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare the principal amount of all the Securities of this series to
be due and payable immediately, by giving notice in writing to the Company (and
to the Trustee if given by Holders) [if applicable, insert -- , provided that,
if upon an Event of Default, the Trustee or such Holders fail to declare the
principal of all Outstanding Securities of this series to be immediately due and
payable, the holders of at least 25% in aggregate liquidation amount of the
related Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee]; and upon any
such declaration the principal amount of and accrued interest (including any
Additional Interest) on all the Securities of this series shall become
immediately due and payable, provided that the payment of principal and interest
on such Securities shall remain subordinated to the extent provided in Article
XI of the Indenture.]
[If the Security is a Discount Security, insert --] As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every case the Trustee or the Holders of not less than
25% in aggregate principal amount of the Outstanding Securities of this series
may declare an amount of principal of the Securities of this series to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders) [if applicable, insert -- , provided that, if upon
an Event of Default, the Trustee or such Holders fail to declare the principal
amount of all the Outstanding Securities of this series to be immediately due
and payable, the holders of at least 25% in aggregate liquidation amount of the
related Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Company and the Trustee.] The
principal amount payable upon such acceleration shall be equal to [-- insert
formula for determining amount.] Upon any such declaration, such amount of the
principal of and accrued interest (including any Additional Interest) on all the
Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest on such Securities shall remain
subordinated to the extent provided in Article XI of the Indenture. Upon payment
(i) of the amount of principal so declared due and payable and (ii) of interest
on any overdue principal, premium, and interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all
56
<PAGE> 66
of the Company's obligations in respect of the payment of the principal of and
premium and interest, if any, on this Security shall terminate.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and interest on this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture (and subject to certain limitations
therein set forth), the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in New York, New York, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees. No service
charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee, nor any such agent shall be affected by notice to the contrary.
The Securities are issuable only in registered form without coupons in
denominations of $______ and any integral multiple of $____ in excess thereof.
As provided in the Indenture and subject to certain limitations therein set
forth, Securities in this series are exchangeable for a like aggregate principal
amount of Securities of this series of a different authorized denomination, as
requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States federal, state, and
local tax purposes, it is intended that this Security constitute indebtedness.
THE SECURITIES AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
57
<PAGE> 67
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------
Authorized Signatory
Dated: ____________, ______
58
<PAGE> 1
Exhibit 4(l)
FORM OF
AMENDED AND RESTATED DECLARATION OF TRUST
HUNTINGTON CAPITAL _______
Dated as of _________________, 19__
<PAGE> 2
HUNTINGTON CAPITAL _______
Certain Sections of this Declaration of Trust relating to Sections 310
through 318 of the Trust Indenture Act of 1939:
Trust Indenture Declaration
Act Section Section
----------- -------
Section 310 (a)(1), .................................................6.3(a)(iii)
(a)(2) ..................................................6.3(a)(iii)
(a)(3) ..........................................................6.9
(a)(4) ..........................................................3.6
(b)...........................................................6.3(c)
Section 311 (a)...........................................................2.2(b)
(b)...........................................................2.2(b)
Section 312 (a)...........................................................2.2(b)
(b)..............................................................2.2
(c)..............................................................2.2
Section 313 (a)..............................................................2.3
(a)(4)...........................................................2.3
(b)..............................................................2.3
(c)..............................................................2.3
(d)..............................................................2.3
Section 314 (a)..............................................................2.4
(b)...................................................Not Applicable
(c)(1)...........................................................2.5
(c)(2)...........................................................2.5
(c)(3)................................................Not Applicable
(d)...................................................Not Applicable
(e).........................................................1.1, 2.4
Section 315 (a)..............................................................3.6
(b)..............................................................3.6
(c)..............................................................3.6
(d)..............................................................3.6
(e)...................................................Not Applicable
Section 316 (a)...................................................Not Applicable
(a)(1)(A).............................................Not Applicable
(a)(1)(B).............................................Not Applicable
(a)(2)................................................Not Applicable
(b)..............................................................2.1
(c)...........................................................3.6(e)
Section 317 (a)(1)................................................Not Applicable
(a)(2)................................................Not Applicable
(b)......................................................3.8(g), (h)
Section 318 (a)..............................................................2.1
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Declaration of Trust.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE 1
INTERPRETATION AND DEFINITIONS............................................................1
Section 1.1 Interpretation and Definitions................................................1
Administrative Action............................................................2
Affiliate........................................................................2
Authorized Officer...............................................................2
Business Day.....................................................................2
Business Trust Act...............................................................2
Capital Security.................................................................2
Capital Security Beneficial Owner................................................2
Capital Security Certificate.....................................................2
Certificate......................................................................2
Certificate of Trust.............................................................2
Closing Date.....................................................................2
Code.............................................................................2
Commission.......................................................................3
Common Securities Holder.........................................................3
Common Security..................................................................3
Common Security Certificate......................................................3
Compounded Distributions.........................................................3
Corporate Trust Office...........................................................3
Covered Person...................................................................3
Custodian........................................................................3
Debenture Issuer.................................................................3
Debenture Issuer Indemnified Person..............................................3
Debenture Trustee................................................................3
Debentures.......................................................................4
Declaration Trustees.............................................................4
Delaware Trustee.................................................................4
Depository.......................................................................4
Direct Action....................................................................4
Distribution.....................................................................4
Exchange Act.....................................................................4
Federal Reserve..................................................................4
Fiduciary Indemnified Person.....................................................4
Fiscal Year......................................................................4
Global Security..................................................................5
Guarantee........................................................................5
Holder...........................................................................5
Indemnified Person...............................................................5
Indenture........................................................................5
Indenture Event of Default.......................................................5
Investment Company...............................................................5
Investment Company Act...........................................................6
Investment Company Event.........................................................6
Legal Action.....................................................................6
Like Amount......................................................................6
List of Holders..................................................................6
Liquidation Amount...............................................................6
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Liquidation Distribution.........................................................6
Majority in Liquidation Amount...................................................6
Officers' Certificate............................................................6
Paying Agent.....................................................................6
Payment Amount...................................................................6
Person...........................................................................6
Property Account.................................................................7
Property Trustee.................................................................7
Pro Rata.........................................................................7
Quorum...........................................................................7
Redemption/Distribution Notice...................................................8
Redemption Price.................................................................8
Regular Trustee..................................................................9
Regulatory Capital Event........................................................10
Related Party...................................................................10
Responsible Officer.............................................................11
Rule 3a-7.......................................................................14
Securities......................................................................17
Securities Act..................................................................20
Security Register...............................................................20
Security Registrar..............................................................20
Special Event...................................................................20
Sponsor .......................................................................22
Successor Delaware Trustee......................................................22
Successor Entity................................................................23
Successor Property Trustee......................................................23
Successor Security..............................................................24
Super Majority..................................................................24
Tax Event.......................................................................25
10% in Liquidation Amount.......................................................25
10% in Liquidation Value........................................................26
Treasury Regulations............................................................26
Trust Enforcement Event.........................................................27
Trust Indenture Act.............................................................27
Trustee" or "Trustees...........................................................28
Trustees' Authorization Certificate.............................................29
ARTICLE 2
TRUST INDENTURE ACT......................................................................30
Section 2.1 Trust Indenture Act; Application............................................32
Section 2.2 Lists of Holders of Securities..............................................33
Section 2.3 Reports by the Property Trustee.............................................33
Section 2.4 Periodic Reports to the Property Trustee....................................34
Section 2.5 Evidence of Compliance with Conditions Precedent............................34
Section 2.6 Trust Enforcement Events; Waiver............................................34
Section 2.7 Trust Enforcement Event; Notice.............................................36
ARTICLE 3
ORGANIZATION.............................................................................36
Section 3.1 Name and Organization.......................................................37
Section 3.2 Office......................................................................37
Section 3.3 Purpose.....................................................................37
</TABLE>
<PAGE> 5
<TABLE>
<S> <C>
Section 3.4 Authority...................................................................38
Section 3.5 Title to Property of the Trust..............................................38
Section 3.6 Powers and Duties of the Regular Trustees...................................39
Section 3.7 Prohibition of Actions by the Trust and the Trustees........................40
Section 3.8 Powers and Duties of the Property Trustee...................................41
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.................41
Section 3.10 Certain Rights of Property Trustee.........................................41
Section 3.11 Delaware Trustee...........................................................41
Section 3.12 Execution of Documents.....................................................41
Section 3.13 Not Responsible for Recitals or Issuance of Securities.....................42
Section 3.14 Duration of Trust..........................................................42
Section 3.15 Mergers....................................................................43
Section 3.16 Property Trustee May File Proofs of Claim..................................45
ARTICLE 4
SPONSOR..................................................................................45
Section 4.1 Responsibilities of the Sponsor.............................................45
Section 4.2 Compensation, Indemnification, and Expenses of the Trustee..................46
ARTICLE 5
TRUST COMMON SECURITIES HOLDER...........................................................46
Section 5.1 Debenture Issuer's Purchase of Common Securities............................47
Section 5.2 Covenants of the Common Securities Holder...................................47
ARTICLE 6
TRUSTEES.................................................................................47
Section 6.1 Number of Trustees..........................................................47
Section 6.2 Delaware Trustee............................................................47
Section 6.3 Property Trustee; Eligibility...............................................47
Section 6.4 Qualifications of Regular Trustees and Delaware Trustee Generally...........47
Section 6.5 Initial Regular Trustees....................................................25
Section 6.6 Appointment, Removal, and Resignation of Trustees...........................25
Section 6.7 Vacancies among Trustees....................................................26
Section 6.8 Effect of Vacancies.........................................................26
Section 6.9 Delegation of Power.........................................................26
Section 6.10 Merger, Conversion, Consolidation, or Succession to Business...............27
ARTICLE 7
THE SECURITIES...........................................................................27
Section 7.1 General Provisions Regarding Securities.....................................27
Section 7.2 Distributions...............................................................28
Section 7.3 Redemption of Securities; Distribution of Debenture.........................29
Section 7.4 Redemption Procedures.......................................................29
Section 7.5 Voting Rights of Capital Securities.........................................30
Section 7.6 Voting Rights of Common Securities..........................................32
Section 7.7 Paying Agent................................................................33
Section 7.8 Transfer of Securities. ...................................................33
Section 7.9 Mutilated, Destroyed, Lost, or Stolen Certificates..........................34
Section 7.10 Deemed Security Holders....................................................34
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
Section 7.11 Global Securities..........................................................34
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST.....................................................36
Section 8.1 Dissolution and Termination of Trust........................................36
Section 8.2 Liquidation Distribution Upon Termination and Dissolution of the Trust......37
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES, OR OTHERS
Section 9.1 Liability...................................................................37
Section 9.2 Exculpation.................................................................38
Section 9.3 Fiduciary Duty..............................................................38
Section 9.4 Indemnification.............................................................39
Section 9.5 Outside Businesses..........................................................40
ARTICLE 10
ACCOUNTING
Section 10.1 Fiscal Year................................................................41
Section 10.2 Certain Accounting Matters.................................................41
Section 10.3 Banking....................................................................41
Section 10.4 Withholding................................................................41
ARTICLE 11
AMENDMENTS AND MEETINGS..................................................................42
Section 11.1 Amendments.................................................................42
Section 11.2 Meetings of the Holders of Securities; Action by Written Consent...........43
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE.....................................................................45
Section 12.1 Representations and Warranties of the Property Trustee.....................45
Section 12.2 Representations and Warranties of the Delaware Trustee.....................45
ARTICLE 13
MISCELLANEOUS............................................................................46
Section 13.1 Notices....................................................................46
Section 13.2 Governing Law..............................................................47
Section 13.3 Intention of the Parties...................................................47
Section 13.4 Headings...................................................................47
Section 13.5 Successors and Assigns.....................................................47
Section 13.6 Partial Enforceability.....................................................47
Section 13.7 Counterparts...............................................................47
Section 13.8 Undertaking for Costs......................................................47
</TABLE>
<PAGE> 7
AMENDED AND RESTATED DECLARATION OF TRUST
OF HUNTINGTON CAPITAL ____
THIS AMENDED AND RESTATED DECLARATION OF TRUST
("Declaration"), dated as of ____________, 19__, among HUNTINGTON BANCSHARES
INCORPORATED, a Maryland corporation, as Sponsor, and Milton D. Baughman, Beth
A. Russell, and Paul V. Sebert, as the initial Regular Trustees, THE CHASE
MANHATTAN BANK, a New York banking corporation, as the initial Property Trustee,
and CHASE MANHATTAN BANK DELAWARE as the initial Delaware Trustee, not in their
individual capacities but solely as Trustees, and the holders, from time to
time, of undivided beneficial ownership interests in the assets of the Trust to
be issued pursuant to this Declaration.
WHEREAS, the Sponsor, the Delaware Trustee, and a Regular
Trustee established Huntington Capital ____ (the "Trust"), a business trust
under the Business Trust Act (as defined, together with other capitalized terms,
herein) pursuant to a Declaration of Trust, dated as of May 21, 1998 (the
"Original Declaration"), and a Certificate of Trust (the "Certificate of Trust")
filed with the Secretary of State of the State of Delaware on May 21, 1998; and
WHEREAS, the sole purpose of the Trust shall be to issue and
sell certain securities representing undivided beneficial ownership interests in
the assets of the Trust, to invest the proceeds from such sales in the
Debentures issued by the Debenture Issuer and to engage in only those activities
necessary or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration.
NOW, THEREFORE, it being the intention of the parties hereto
that the Trust constitute a business trust under the Business Trust Act, the
Trustees hereby declare that all assets contributed to the Trust be held in
trust for the benefit of the Holders, from time to time, of the Securities
representing undivided beneficial ownership interests in the assets of the Trust
issued hereunder, subject to the provisions of this Declaration.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
Section 1.1 Interpretation and Definitions.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined
in the preamble above have the respective meanings assigned to them in this
Section;
(b) a term defined anywhere in this Declaration has the same
meaning throughout;
(c) all references to "the Declaration" or "this Declaration"
are to this Declaration as modified, supplemented, or amended from time to time;
(d) all references in this Declaration to Articles and Sections
are to Articles and Sections of this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa and a reference to any masculine form of a term shall include the feminine
form of a term, as applicable.
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"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means the Chairman of the
Board, a Vice Chairman of the Board, the Chief Executive Officer, the President,
a Vice President, the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary, or an Assistant Secretary of the company.
"Business Day" means any day other than a Saturday or Sunday or
a day on which banking institutions in the City of New York or the City of
Columbus 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 is closed
for business.
"Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. ss. 3801, et seq., as it may be amended from time to
time, or any successor legislation.
"Capital Security" has the meaning specified in Section 7.1(a).
"Capital Security Beneficial Owner" means, with respect to any
beneficial interest in a Global Security, ownership and transfers of which shall
be maintained and made through book entries by a Depository, a Person who is the
beneficial owner of such beneficial interest, as reflected on the books of the
Depository, or on the books of a Person maintaining an account with such
Depository (as a direct or indirect participant, in each case in accordance with
the rules of such Depository).
"Capital Security Certificate" means a certificate representing
a Capital Security.
"Certificate" means a Common Security Certificate or a Capital
Security Certificate.
"Certificate of Trust" has the meaning specified in the
recitals hereto.
"Closing Date" means the date or dates on which the Capital
Securities are issued and sold.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, or any successor legislation. A reference to a specific section of
the Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Securities Holder" means Huntington Bancshares
Incorporated in its capacity as purchaser and holder of all of the Common
Securities issued by the Trust.
"Common Security" has the meaning specified in Section 7.1(a).
"Common Security Certificate" means a definitive certificate in
fully registered form representing a Common Security.
"Compounded Distributions" has the meaning specified in Section
7.2(a).
"Corporate Trust Office" means the office of the Property
Trustee at which the corporate trust business of the Property Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Declaration is located at 450 West 33rd Street, New York, New
York 10001, Attention: Global Trust Services.
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"Covered Person" means (a) any trustee, officer, director,
shareholder, partner, member, representative, employee, or agent of (i) the
Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Custodian" means The Chase Manhattan Bank.
"Debenture Issuer" means Huntington Bancshares Incorporated in
its capacity as issuer of the Debentures under the Indenture.
"Debenture Issuer Indemnified Person" means (a) any Regular
Trustee; (b) any Affiliate of any Regular Trustee; (c) any officer, director,
shareholder, member, partner, employee, representative, or agent of any Regular
Trustee or any Affiliate thereof; or (d) any officer, employee, or agent of the
Trust or its Affiliates.
"Debenture Trustee" means The Chase Manhattan Bank, in its
capacity as trustee under the Indenture until a successor is appointed
thereunder, and thereafter means such successor trustee.
"Debentures" means the Securities (as defined in the Indenture)
to be issued by the Debenture Issuer and to be held by the Property Trustee.
"Declaration Trustees" means collectively, the Regular
Trustees, Property Trustee, and the Delaware Trustee.
"Delaware Trustee" has the meaning set forth in Section 6.2.
"Depository" means, with respect to Securities issuable in
whole or in part in the form of one or more Global Securities, a clearing agency
registered under the Exchange Act that is designated to act as depository for
such Securities.
"Direct Action" has the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 7.2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System, as from time to time constituted, or if at any time after the
execution of this Indenture the Federal Reserve is not existing and performing
the duties now assigned to it, then the body performing such duties at such
time.
"Fiduciary Indemnified Person" has the meaning set forth in
Section 94.4(b).
"Fiscal Year" has the meaning set forth in Section 10.1.
"Global Security" has the meaning set forth in Section 7.11.
"Guarantee" means the guarantee agreement of the Sponsor in
respect of the Capital Securities and the Common Securities.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act; provided, however, that in
determining whether the Holders of the requisite liquidation amount of Capital
Securities have voted on any matter provided for in this Declaration, then for
the purpose of such determination only (and not for any other purpose
hereunder), if the Capital Securities remain in the form of one or more Global
Securities, the term "Holders" shall mean the holder of the Global Security
acting at the direction of the beneficial owners of the Capital Securities.
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"Indemnified Person" means a Debenture Issuer Indemnified
Person or a Fiduciary Indemnified Person.
"Indenture" means the Indenture, dated as of June 4, 1998,
between the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Investment Company" means an investment company as defined in
the Investment Company Act and the regulations promulgated thereunder.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"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 to be registered under the Investment Company Act, which Change
in 1940 Act Law becomes effective on or after the Closing Date.
"Legal Action" has the meaning set forth in Section 3.6(g).
"Like Amount" means (a) with respect to a redemption of
Securities, Securities having a Liquidation Amount equal to the principal amount
of corresponding Debentures to be contemporaneously redeemed in accordance with
the Indenture, the proceeds of which will be used to pay the Redemption Price of
such Securities, and (b) with respect to a Distribution of corresponding
Debentures to Holders of any Securities in connection with a dissolution or
liquidation of the Trust, corresponding Debentures having a principal amount
equal to the Liquidation Amount of the Securities in respect of which a
Distribution is made.
"List of Holders" has the meaning specified in Section 2.2(a).
"Liquidation Amount" or "Liquidation Value" means the stated
amount of $_____ per Security.
"Liquidation Distribution" has the meaning specified in Section
8.2(a).
"Majority in Liquidation Amount" or "Majority in Liquidation
Value" means, except as provided in the terms of the Capital Securities or by
the Trust Indenture Act, Holder(s) of outstanding Securities, voting together as
a single class, or, as the context may require, Holders of outstanding Capital
Securities or Holders of outstanding Common Securities, voting separately as a
class, who are the record owners of more than 50% of the aggregate Liquidation
Amount (including the stated amount that would be paid on redemption,
liquidation or otherwise, plus accrued and unpaid Distributions to the date upon
which the voting percentages are determined) of all outstanding Securities of
the relevant class.
"Officers' Certificate" means, with respect to any Person
(other than Regular Trustees who are natural persons), a certificate signed by
two Authorized Officers of such Person on behalf of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions relating
thereto;
(b) a 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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(c) a statement as to whether, in the opinion of each such
officer and on behalf of such Person, such condition or covenant has been
complied with; provided, that the term "Officers' Certificate", when used with
reference to Regular Trustees who are natural persons shall mean a certificate
signed by two of the Regular Trustees which otherwise satisfies the foregoing
requirements.
"Paying Agent" has the meaning specified in Section 7.7.
"Payment Amount" has the meaning specified in Section 7.2(a).
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Property Account" has the meaning specified in Section 3.8(c).
"Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3.
"Pro Rata" means pro rata to each Holder of Securities
according to the aggregate Liquidation Amount of the Securities held by the
relevant Holder in relation to the aggregate Liquidation Amount of all
Securities outstanding.
"Quorum" means a majority of the Regular Trustees or, if there
are only two Regular Trustees, both of them.
"Redemption/Distribution Notice" has the meaning specified in
Section 7.4.
"Redemption Price" has the meaning specified in Section 7.3(a).
"Regular Trustee" means any Trustee other than the Property
Trustee and the Delaware Trustee.
"Regulatory Capital Event" means that the Debenture Issuer
shall have received an opinion of independent bank regulatory counsel
experienced in such matters to the effect that, as a result of (a) any amendment
to or change (including any announced prospective change) in the laws (or any
regulations thereunder) of the United States or any rules, guidelines, or
policies of the Federal Reserve or (b) any official or administrative
pronouncement or action or judicial decision for interpreting or applying such
laws or regulations, which amendment or change is effective or such
pronouncement or decision is announced on or after the date of original issuance
of the Capital Securities, the Capital Securities do not constitute, or within
90 days of the date thereof, will not constitute Tier 1 capital (or its then
equivalent); provided, however, that the distribution of the Debentures in
connection with the liquidation of the Trust by the Debenture Issuer shall not
in and of itself constitute a Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event or an Investment Company
Event.
"Related Party" means, with respect to the Sponsor, any direct
or wholly owned subsidiary of the Sponsor.
"Responsible Officer", when used with respect to the Property
Trustee, means any officer within the Corporate Trust Office, including any
Vice-President, any Assistant Vice-President, the Secretary, any Assistant
Secretary or any other officer of the Property Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act or
any successor rule thereunder.
"Securities" means the Common Securities and the Capital
Securities.
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"Securities Act" means the Securities Act of 1933, as amended
from time to time, or any successor legislation.
"Security Register" has the meaning specified in Section
7.8(a).
"Security Registrar" has the meaning specified in Section
7.8(a).
"Special Event" means a Tax Event, a Regulatory Capital Event
or an Investment Company Event.
"Sponsor" means Huntington Bancshares Incorporated, a Maryland
corporation, or any successor entity in a merger, consolidation, or
amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning specified in
Section 6.6(b).
"Successor Entity" has the meaning specified in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning specified in
Section 6.6(b).
"Successor Security" has the meaning specified in Section
3.15(b)(i)b.
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"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 (a) any amendment to, clarification of, change in, or announced
proposed change in the laws (or any regulations promulgated thereunder) of the
United States or any political subdivision or taxing authority thereof or
therein, or (b) any judicial decision, any official administrative
pronouncement, ruling (including any private letter ruling or technical advice
memorandum or field service advice), revenue agent's report, regulatory
procedure, notice, or pronouncement, including any notice or announcement of
intent to adopt such procedures or regulation (an "Administrative Action"),
regardless of whether such judicial decision or Administrative Action is issued
to or in connection with a proceeding involving the Company or a Trust and
whether or not subject to review or appeal, which amendment, clarification,
change, Administrative Action, or decision is enacted, promulgated, or announced
in each case, is taken on or after the date of original issuance of the Capital
Securities, there is more than an insubstantial risk that (i) the Trust is, or
will be within 90 days of such opinion, subject to the United States federal
income tax with respect to income received or accrued on the Securities, (ii)
interest payable by the Company on the Securities is not, or within 90 days of
the date of such opinion, will not be deductible by the Company, in whole or in
part, for United States federal income tax purposes, or (iii) the Trust is, or
will be within 90 days of the date of such opinion, subject to more than a de
minimus amount of other taxes, duties, or other governmental charges.
"10% in Liquidation Amount" or "10% in Liquidation Value"
means, except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, Holder(s) of outstanding Securities, voting together as a single
class, or, as the context may require, Holders of outstanding Capital Securities
or Holders of outstanding Common Securities, voting separately as a class, who
are the record owners of 10% or more of the aggregate Liquidation Amount
(including the stated amount that would be paid on redemption, liquidation, or
otherwise, plus accrued and unpaid Distributions to the date upon which the
voting percentages are determined) of all outstanding Securities of the relevant
class.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Enforcement Event" in respect of the Securities means an
Indenture Event of Default has occurred and is continuing in respect of the
Debentures.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
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"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trustees' Authorization Certificate" means a written
certificate signed by two of the Regular Trustees for the purpose of
establishing the terms and form of the Capital Securities and the Common
Securities as determined by the Regular Trustees.
ARTICLE 2
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the Trust's classification as a grantor trust for
United States federal income tax purposes and shall not affect the nature of the
Securities as equity securities representing undivided beneficial ownership
interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Regular Trustees on behalf of
the Trust shall provide the Property Trustee with a list, in such form as the
Property Trustee may reasonably require, of the names and addresses of the
Holders of the Securities ("List of Holders"), (i) not later than June 30 and
December 31 of each year and current as of such date, and (ii) at any other
time, within 30 days of receipt by the Trust of a written request from the
Property Trustee for a List of Holders as of a date no more than 15 days before
such List of Holders is given to the Property Trustee; provided that neither the
Sponsor nor the Regular Trustees on behalf of the Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not differ
from the most recent List of Holders given to the Property Trustee by the
Sponsor and the Regular Trustees on behalf of the Trust. The Property Trustee
shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity), provided that the
Property Trustee may, but shall not be obligated to, destroy any List of Holders
previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations
under, and shall be entitled to the benefits of, Sections 311(a), 311(b) and
312(b) of the Trust Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year (commencing in the
year of the first anniversary of the issuance of the Capital Securities), the
Property Trustee shall provide to the Holders of the Capital Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Property Trustee shall also comply with the requirements of Section 313(d)
of the Trust Indenture Act.
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Section 2.4 Periodic Reports to the Property Trustee.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner and at the times required by Section 314 of the Trust
Indenture Act and an Officer's Certificate as to its compliance with all
conditions and covenants under this Declaration on an annual basis on or before
120 days after the end of each fiscal year of the Sponsor.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Regular Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration that relate to
any of the matters set forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer pursuant to Section
314(c)(1) shall be given in the form of an Officers' Certificate.
Section 2.6 Trust Enforcement Events; Waiver.
(a) The Holders of a Majority in Liquidation Amount of the
Capital Securities may, by vote or written consent, on behalf of the Holders of
all of the Capital Securities, waive any past Trust Enforcement Event in respect
of the Capital Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, the Trust
Enforcement Event under the Declaration shall also
not be waivable; or
(ii) requires the consent or vote of greater than a
majority in principal amount of the holders of the
Debentures (a "Super Majority") to be waived under
the Indenture, the Trust Enforcement Event under the
Declaration may only be waived by the vote or written
consent of the Holders of at least the proportion in
liquidation amount of the Capital Securities that the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in
lieu of Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from this
Declaration and the Securities, as permitted by the Trust Indenture Act. Upon
such waiver, any such default shall cease to exist, and any Trust Enforcement
Event with respect to the Capital Securities arising therefrom shall be deemed
to have been cured, for every purpose of this Declaration and the Capital
Securities, but no such waiver shall extend to any subsequent or other Trust
Enforcement Event with respect to the Capital Securities or impair any right
consequent thereon. Any waiver by the Holders of the Capital Securities of a
Trust Enforcement Event with respect to the Capital Securities shall also be
deemed to constitute a waiver by the Holders of the Common Securities of any
such Trust Enforcement Event with respect to the Common Securities for all
purposes of this Declaration without any further act, vote, or consent of the
Holders of the Common Securities.
(b) The Holders of a Majority in Liquidation Amount of the
Capital Securities will have the right to direct the time, method, and place of
conducting any proceeding of any remedy available to the Property Trustee or to
direct the exercise of any trust or power conferred upon the Property Trustee,
including the right to direct the Property Trustee to exercise the remedies
available to it as Holder of the Debentures.
(c) The Holders of a Majority in Liquidation Amount of the
Common Securities may, by vote or written consent, on behalf of the Holders of
all of the Common Securities, waive any past Trust Enforcement Event in respect
of the Common Securities and its consequences, provided that, if the underlying
Indenture Event of Default:
(i) is not waivable under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Trust Enforcement Event under the
Declaration as provided below in this Section
2.6(c), the Trust Enforcement Event under the
Declaration shall also not be waivable; or
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(ii) requires the consent or vote of a Super Majority to
be waived under the Indenture, except where the
Holders of the Common Securities are deemed to have
waived such Trust Enforcement Event under the
Declaration as provided below in this Section
2.6(c), the Trust Enforcement Event under the
Declaration may only be waived by the vote or written
consent of the Holders of at least the proportion in
liquidation amount of the Common Securities that the
relevant Super Majority represents of the aggregate
principal amount of the Debentures outstanding;
provided further, each Holder of Common Securities will be deemed to have waived
any Trust Enforcement Event and all Trust Enforcement Events with respect to the
Common Securities and the consequences thereof until all Trust Enforcement
Events with respect to the Capital Securities have been cured, waived, or
otherwise eliminated, and until such Trust Enforcement Events with respect to
the Capital Securities have been so cured, waived, or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(c) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby
expressly excluded from this Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section
2.6(c), upon such waiver, any such default shall cease to exist and any Trust
Enforcement Event with respect to the Common Securities arising therefrom shall
be deemed to have been cured for every purpose of this Declaration, but no such
waiver shall extend to any subsequent or other Trust Enforcement Event with
respect to the Common Securities or impair any right consequent thereon.
(d) A waiver of an Indenture Event of Default by the Property
Trustee at the direction of the Holders of the Capital Securities constitutes a
waiver of the corresponding Trust Enforcement Event with respect to the Capital
Securities under this Declaration. The foregoing provisions of this Section
2.6(c)(ii) shall be in lieu of Section 316(a)(1)(B) of the Trust Indenture Act
and such Section 316(a)(1)(B) of the Trust Indenture Act is hereby expressly
excluded from this Declaration and the Securities, as permitted by the Trust
Indenture Act.
Section 2.7 Trust Enforcement Event; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of a Trust Enforcement Event, transmit by mail, first class postage
prepaid, to the Holders of the Securities, notices of all defaults with respect
to the Securities actually known to a Responsible Officer of the Property
Trustee, unless such defaults have been cured before the giving of such notice
(the term "defaults" for the purposes of this Section 2.7(a) being hereby
defined to be an Indenture Event of Default, not including any periods of grace
provided for therein and irrespective of the giving of any notice provided
therein); provided that, except for a default in the payment of principal of (or
premium, if any) or interest on any of the Debentures, the Property Trustee
shall be fully protected in withholding such notice if and so long as a
Responsible Officer of the Property Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders of the Securities.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 501(1) and 501(2) of the
Indenture; or
(ii) any default as to which the Property Trustee shall
have received written notice or of which a
Responsible Officer of the Property Trustee charged
with the administration of this Declaration shall
have actual knowledge.
ARTICLE 3
ORGANIZATION
Section 3.1 Name and Organization.
The Trust hereby continued is named "Huntington Capital ___" as
such name may be modified from time to time by the Regular Trustees following
written notice to the Holders of Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Regular Trustees.
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Section 3.2 Office.
The address of the principal executive office of the Trust is
c/o Huntington Bancshares Incorporated, Huntington Center, 41 South High Street,
Columbus, Ohio 43287, Attn: Judith D. Fisher. On 10 Business Days' written
notice to the Holders of Securities, the Regular Trustees may designate another
principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to
issue and sell the Securities and use the gross proceeds from such sale to
acquire the Debentures, and (b) except as otherwise limited herein, to engage in
only those other activities necessary or incidental thereto. The Trust shall not
borrow money, issue debt, or reinvest proceeds derived from investments,
mortgage, pledge any of its assets, or otherwise undertake (or permit to be
undertaken) any activity that would cause the Trust not to be classified as a
grantor trust for United States federal income tax purposes.
By the acceptance of this Trust, none of the Trustees, the
Sponsor, the Holders of the Capital Securities or Common Securities, or the
Capital Security Beneficial Owners will take any position which is contrary to
the classification of the Trust as a grantor trust for United States federal
income tax purposes.
Section 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Regular Trustees shall have
exclusive authority to carry out the purposes of the Trust. An action taken by
the Regular Trustees in accordance with their powers shall constitute the act of
and serve to bind the Trust and an action taken by the Property Trustee on
behalf of the Trust in accordance with its powers shall constitute the act of
and serve to bind the Trust. In dealing with the Trustees acting on behalf of
the Trust, no person shall be required to inquire into the authority of the
Trustees to bind the Trust. Persons dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set forth in this
Declaration.
(a) Except as expressly set forth in this Declaration and
except if a meeting of the Regular Trustees is called with respect to any matter
over which the Regular Trustees have power to act, any power of the Regular
Trustees may be exercised by, or with the consent of, any one such Regular
Trustee.
(b) Unless otherwise determined by the Regular Trustees, and
except as otherwise required by the Business Trust Act or applicable law, any
Regular Trustee is authorized to execute on behalf of the Trust any documents
which the Regular Trustees have the power and authority to cause the Trust to
execute pursuant to Section 3.6(b); and
(c) A Regular Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Regular Trustees
have power and authority to cause the Trust to execute pursuant to Section 3.6.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Account or as otherwise provided in this
Declaration, legal title to all assets of the Trust shall be vested in the
Trust. The Holders shall not have legal title to any part of the assets of the
Trust, but shall have an undivided beneficial ownership interest in the assets
of the Trust.
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Section 3.6 Powers and Duties of the Regular Trustees.
The Regular Trustees shall have the power, duty and authority
to cause the Trust to engage in the following activities, subject to the
limitations and restrictions of applicable laws:
(a) to establish the terms and form of the Capital Securities
and the Common Securities in the manner specified in Section 7.1 and issue and
sell the Capital Securities and the Common Securities in accordance with this
Declaration; provided, that there shall be no interests in the Trust other than
the Securities, and no more than one series of Common Securities and one series
of Capital Securities;
(b) in connection with the issue and sale of the Capital
Securities, at the direction of the Sponsor, to:
(i) (A) assist in the preparation and filing with the
Commission of a registration statement, relating to
the registration of the Capital Securities under
Section 12(b) or 12(g) of the Exchange Act, (B)
assist in the preparation of an underwriting
agreement providing for the sale of the Capital
Securities, on such terms as the Sponsor deems
appropriate, and (C) assist in the preparation and
filing of an application, to the New York Stock
Exchange or any other national stock exchange or the
Nasdaq National Market or any foreign national stock
exchange for listing of any Capital Securities, the
Guarantee and the Debentures;
(ii) execute and file any documents prepared by the
Sponsor, or take any acts as determined by the
Sponsor to be necessary, in order to qualify or
register all or part of the Capital Securities in
any State in which the Sponsor has determined to
qualify or register such Capital Securities for
sale; and
(iii) execute and deliver letters or documents to, or
instruments with, the Depository relating to the
Capital Securities.
(c) to acquire the Debentures with the proceeds of the sale of
the Capital Securities and the Common Securities; provided, however, that the
Regular Trustees shall cause legal title to the Debentures to be held of record
in the name of the Property Trustee for the benefit of the Holders of the
Capital Securities and the Holders of the Common Securities;
(d) to give the Sponsor and the Property Trustee prompt written
notice of the occurrence of a Special Event; provided that the Regular Trustees
shall consult with the Sponsor and the Property Trustee before taking or
refraining from taking any action in relation to any such Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions, and exchanges, and to issue relevant
notices to the Holders of Capital Securities and Holders of Common Securities as
to such actions and applicable record dates;
(f) to take all actions and perform such duties as may be
required of the Regular Trustees pursuant to the terms of this Declaration and
the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate,
resort to legal action, or otherwise adjust claims or demands of or against the
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Property Trustee
has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may
be designated as officers with titles) and managers, contractors, advisors, and
consultants to conduct only those services that the Regular Trustees have
authority to conduct directly, and to and pay reasonable compensation for such
services;
(i) to incur expenses that are necessary or incidental to carry
out any of the purposes of the Trust;
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(j) to act as, or appoint another Person to act as, registrar,
paying agent, and transfer agent for the Securities;
(k) to give prompt written notice to the Holders of the
Securities of any notice received from the Debenture Issuer of its election to
defer payments of interest on the Debentures by extending the interest payment
period under the Debentures as authorized by the Indenture;
(l) to take all action that may be necessary or appropriate for
the preservation and the continuation of the Trust's valid existence, rights,
franchises, and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for which the Trust was
created;
(m) to take any action, not inconsistent with applicable law,
that the Regular Trustees determine in their discretion to be necessary or
desirable in carrying out the purposes and functions of the Trust as set out in
Section 3.3 or the activities of the Trust as set out in this Section 3.6,
including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under
the Investment Company Act;
(ii) causing the Trust to be classified as a grantor
trust for United States federal income tax purposes;
and
(iii) cooperating with the Debenture Issuer to ensure that
the Debentures will be treated as indebtedness of
the Debenture Issuer for United States federal
income tax purposes.
(n) to take all action necessary to cause all applicable tax
returns and tax information reports that are required to be filed with respect
to the Trust to be duly prepared and filed by the Regular Trustees, on behalf of
the Trust; and
(o) to execute all documents or instruments, perform all duties
and powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
No provision of this Declaration shall be construed to
relieve a Regular Trustee from liability for his own negligent action, his own
negligent failure to act, or his own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement
Event and after the curing or waiving of such Trust
Enforcement Event that may have occurred:
(A) the duties and obligations of the Regular
Trustees shall be determined solely by the
express provisions of this Declaration and the
Regular Trustees shall not be liable except for
the performance of such duties and obligations
as are specifically set forth in this
Declaration, and no implied covenants or
obligations shall be read into this Declaration
against the Regular Trustees; and
(B) in the absence of bad faith on the part of a
Regular Trustee, such Regular 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 such Regular Trustee and
conforming to the requirements of this
Declaration; but in the case of any such
certificates or opinions that by any provision
hereof are specifically required to be furnished
to such Regular Trustee, such Regular Trustee
shall be under a duty to examine the same to
determine whether or not they substantially
conform to the requirements of this Declaration;
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(ii) a Regular Trustee shall not be liable for any error
of judgment made in good faith unless it shall be
proved that such Regular Trustee was negligent in
ascertaining the pertinent facts;
(iii) no provision of this Declaration shall require a
Regular Trustee to expend or risk his own funds or
otherwise incur personal financial liability in the
performance of any of his duties or in the exercise
of any of his rights or powers, if he shall have
reasonable grounds for believing that the repayment
of such funds or liability is not reasonably
assured to him under the terms of this Declaration
or indemnity reasonably satisfactory to such
Regular Trustee against such risk or liability is
not reasonably assured to him;
(iv) a Regular Trustee shall not be responsible for
monitoring the compliance by the Property Trustee
or the Sponsor with their respective duties under
this Declaration, nor shall such Regular Trustee be
liable for any default or misconduct of the
Property Trustee or the Sponsor;
(v) a Regular Trustee may conclusively rely and shall
be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness, or other paper or
document believed by him to be genuine and to have
been signed, sent, or presented by the proper party
or parties;
(vi) a Regular Trustee shall have no duty to see to any
recording, filing, or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities
laws) or any rerecording, refiling, or registration
thereof;
(vii) the Regular Trustees may consult with counsel or
other experts of their selection and the advice or
opinion of such counsel and experts with respect to
legal matters or advice within the scope of such
experts' area of expertise shall be full and
complete authorization and protection in respect of
any action taken, suffered, or omitted by them
hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to
the Sponsor or any of its Affiliates, and may
include any of its employees. The Regular Trustees
shall have the right at any time to seek
instructions concerning the administration of this
Declaration from any court of competent
jurisdiction;
(viii) the Regular Trustees shall be under no obligation
to exercise any of the rights or powers vested in
them by this Declaration at the request or
direction of any Holder, unless such Holder shall
have provided to the Regular Trustees security and
indemnity, reasonably satisfactory to the Regular
Trustees, against the costs, expenses (including
attorneys' fees and expenses), and liabilities that
might be incurred by them in complying with such
request or direction, including such reasonable
advances as may be requested by them;
(ix) a Regular Trustee shall not be bound to make any
investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other
evidence of indebtedness, or other paper or
document, but he, in his discretion, may make such
further inquiry or investigation into such facts or
matters as he may see fit;
(x) a Regular Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents,
custodians, nominees, or attorneys and such Regular
Trustee shall not be responsible for any misconduct
or negligence on the part of any agent or attorney
appointed with due care by him hereunder;
(xi) any action taken by a Regular Trustee or his agents
hereunder shall bind the Trust and the Holders of
the Securities, and the signature of such Regular
Trustee or his agents alone shall be sufficient and
effective to perform any such action and no third
party shall be required
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to inquire as to the authority of such Regular
Trustee to so act or as to his compliance with any
of the terms and provisions of this Declaration,
both of which shall be conclusively evidenced by
such Regular Trustee's or his agent's taking such
action;
(xii) except as otherwise expressly provided by this
Declaration, a Regular Trustee shall not be under
any obligation to take any action that is
discretionary under the provisions of this
Declaration; and
(xiii) a Regular Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by
it in good faith and reasonably believed by it to
be authorized or within the discretion or rights or
powers conferred upon it by this Declaration.
The Regular Trustees shall exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Regular Trustees shall have no power to,
and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set forth in Section 3.3 or that is inconsistent with or
in contravention of any applicable law.
Subject to this Section 3.6, the Regular Trustees shall have
none of the powers or the authority of the Property Trustee set forth in Section
3.8.
Any expenses incurred by the Regular Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
Section 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including the
Property Trustee) shall cause the Trust not to, engage in any activity other
than as required or authorized by this Declaration. In particular, the Trust
shall not and the Trustees (including the Property Trustee) shall cause the
Trust not to:
(i) invest any proceeds received by the Trust from
holding the Debentures, but shall distribute all
such proceeds to Holders of Securities pursuant to
the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than the Debentures (and
any interest or proceeds received thereon) and the
Guarantee (and the proceeds received thereon or
with respect thereto);
(iii) possess Trust property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets;
(vi) possess any power or otherwise act in such a way as
to vary the terms of the Securities in any way
whatsoever (except to the extent expressly
authorized in this Declaration or by the terms of
the Securities);
(vii) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in,
the Trust other than the Securities; or
(viii) other than as provided in this Declaration or by
the terms of the Securities, (A) direct the time,
method, and place of exercising any trust or power
conferred upon the Debenture Trustee with respect
to the Debentures, (B) waive any past default that
is waivable under the Indenture, (C) exercise any
right to rescind or annul any declaration that the
principal of all the Debentures shall be due and
payable, or (D) consent to any amendment,
modification,
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or termination of the Indenture or the Debentures
where such consent shall be required unless, in
each case, the Trust shall have received (A) the
prior approval of the Majority in Liquidation
Amount of the Capital Securities; provided,
however, that where a consent or action under the
Indenture would require the consent or act of the
holders of more than a majority of the aggregate
liquidation amount of Debentures affected thereby,
only the Holders of the percentage of the aggregate
stated liquidation amount of the Capital Securities
which is at least equal to the percentage required
under the Indenture may direct the Property Trustee
to give such consent to take such action and (B) an
opinion of counsel to the effect that such
modification will not cause more than an
insubstantial risk that the Trust will be deemed an
Investment Company required to be registered under
the Investment Company Act, or the Trust will not
be classified as a grantor trust for United States
federal income tax purposes; or
(ix) take any action inconsistent with the status of the
Trust as a grantor trust for United States federal
income tax purposes; or
(x) revoke any action previously authorized or approved
by a vote of the Holders of the Capital Securities
except pursuant to a subsequent vote of the Holders
of the Capital Securities.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Trust and the Holders of the Securities. The right, title, and interest of
the Property Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Property Trustee in accordance with Section
6.6. Such vesting and cessation of title shall be effective whether or not
conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Property Trustee shall not transfer its right, title,
and interest in the Debentures to the Regular Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Account") in
the name of and under the exclusive control of the
Property Trustee on behalf of the Holders of the
Securities and, upon the receipt of payments of
funds made in respect of the Debentures held by the
Property Trustee, deposit such funds into the
Property Account and make payments to the Holders
of the Capital Securities and Holders of the Common
Securities from the Property Account in accordance
with Section 7.2. Funds in the Property Account
shall be held uninvested until disbursed in
accordance with this Declaration. The Property
Account shall be an account that is maintained with
a banking institution the rating on whose long-term
unsecured indebtedness is at least equal to the
rating assigned to the Capital Securities by a
"nationally recognized statistical rating
organization," as that term is defined for purposes
of Rule 436(g)(2) under the Securities Act;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption
of the Capital Securities and the Common Securities
to the extent the Debentures are redeemed or
mature; and
(iii) upon written notice of distribution issued by the
Regular Trustees in accordance with the terms of
the Securities, engage in such ministerial
activities as so directed and as shall be necessary
or appropriate to effect the distribution of the
Debentures to Holders of Securities upon the
occurrence of a Special Event.
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<PAGE> 22
(d) The Property Trustee shall take all actions and perform
such duties as may be specifically required of the Property Trustee pursuant to
the terms of this Declaration and the Securities.
(e) The Property Trustee shall take any Legal Action which
arises out of or in connection with a Trust Enforcement Event of which a
Responsible Officer of the Property Trustee has actual knowledge or the Property
Trustee's duties and obligations under this Declaration or the Trust Indenture
Act; provided, however, that if a Trust Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay interest or principal (or premium, if any) on the Debentures on the date
such interest or principal (or premium, if any) is otherwise payable (or in the
case of redemption, on the redemption date), then a Holder of Capital Securities
may, to the fullest extent permitted by law, directly institute a proceeding for
enforcement of payment to such Holder of the principal of (or premium, if any)
or interest on the Debentures having a principal amount equal to the aggregate
Liquidation Amount of the Capital Security of such Holder (a "Direct Action"),
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Holders of the Common Securities will
be subrogated to the rights of such Holder of Capital Securities to the extent
of any payment made by the Debenture Issuer to such Holder of Capital Securities
in such Direct Action; provided, however, that no Holder of the Common
Securities may exercise any such right of subrogation so long as an Trust
Enforcement Event with respect to the Capital Securities has occurred and is
continuing. Except as provided in the preceding sentences, the Holders of
Capital Securities will not be able to exercise directly any other remedy
available to the Holders of the Debentures.
(f) The Property Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders
of Securities pursuant to the terms of the Securities;
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section
6.6; or
(iii) the Property Trustee has resigned in accordance with
Section 6.6.
(g) Subject to such limitations as are necessary to insure
compliance with Section 3.3, the Property Trustee shall have the legal power to
exercise all of the rights, powers, and privileges of a holder of Debentures
under the Indenture and, if a Trust Enforcement Event actually known to a
Responsible Officer of the Property Trustee occurs and is continuing, the
Property Trustee shall, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to the terms of such Securities.
(h) The Property Trustee may authorize one or more Paying
Agents to pay Distributions, redemption payments, or liquidation payments on
behalf of the Trust with respect to all Securities and any such Paying Agent
shall comply with Section 317(b) of the Trust Indenture Act. Any Paying Agent
may be removed by the Property Trustee at any time and a successor Paying Agent
or additional Paying Agents may be appointed at any time by the Property
Trustee. In the event the Capital Securities do not remain in the form of one or
more Global Securities, the Property Trustee will act as Paying Agent. The
Property Trustee may designate additional or substitute Paying Agents at any
time.
(i) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers, or authority of the Regular
Trustees set forth in Section 3.6.
The Property Trustee shall exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes and functions
of the Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Property Trustee shall have no power to,
and shall not, take any action that is inconsistent with the purposes and
functions of the Trust set out in Section 3.3.
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Section 3.9 Certain Duties and Responsibilities of the Property
Trustee.
(a) The Property Trustee, before the occurrence of any Trust
Enforcement Event and after the curing of all Trust Enforcement Events that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Property Trustee. In case a Trust Enforcement Event has
occurred (that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Property Trustee has actual knowledge, the Property
Trustee shall exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) No provision of this Declaration shall be construed to
relieve the Property Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of a Trust Enforcement Event
and after the curing or waiving of all such Trust
Enforcement Events that may have occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the
express provisions of this Declaration and
the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in
this Declaration, and no implied covenants or
obligations shall be read into this
Declaration against the Property Trustee; and
(B) in the absence of bad faith on the part of
the Property Trustee, the Property Trustee
may conclusively rely, as to the truth of the
statements and the correctness of the
opinions expressed therein, upon any
certificates or opinions furnished to the
Property Trustee and conforming to the
requirements of this Declaration; but in the
case of any such certificates or opinions
that by any provision hereof are specifically
required to be furnished to the Property
Trustee, the Property Trustee shall be under
a duty to examine the same to determine
whether or not they substantially conform to
the requirements of this Declaration;
(ii) the Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer
of the Property Trustee, unless it shall be proved that
the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect
to any action taken or omitted to be taken by it
without negligence, in good faith in accordance with
the direction of the Holders of not less than a
Majority in Liquidation Amount of the Securities
relating to the time, method, and place of conducting
any proceeding for any remedy available to the Property
Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of
any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Declaration or indemnity
reasonably satisfactory to the Property Trustee against
such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the
custody, safe-keeping, and physical preservation of the
Debentures and the Property Account shall be to deal
with such property in a similar manner as the Property
Trustee deals with similar property for its own
account, subject to the protections and limitations on
liability afforded to the Property Trustee under this
Declaration and the Trust Indenture Act;
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(vi) the Property Trustee shall have no duty or liability
for or with respect to the value, genuineness,
existence, or sufficiency of the Debentures or the
payment of any taxes or assessments levied thereon or
in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Sponsor in writing. Money held
by the Property Trustee need not be segregated from
other funds held by it except in relation to the
Property Account maintained by the Property Trustee
pursuant to Section 3.8(c)(i) and except to the extent
otherwise required by law;
(viii) the Property Trustee shall not be responsible for
monitoring the compliance by the Regular Trustees or
the Sponsor with their respective duties under this
Declaration, nor shall the Property Trustee be liable
for any default or misconduct of the Regular Trustees
or the Sponsor; and
(ix) The Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise
agreed in writing with the Debenture Issuer.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness, or other paper or document
believed by it to be genuine and to have been signed,
sent, or presented by the proper party or parties;
(ii) any direction or act of the Sponsor or the Regular
Trustees contemplated by this Declaration shall be
sufficiently evidenced by an Officers' Certificate (or,
with respect to the establishment of the terms and form
of the Securities by the Regular Trustees, by a
Trustees' Authorization Certificate);
(iii) whenever in the administration of this Declaration,
the Property Trustee shall deem it desirable that a
matter be proved or established before taking,
suffering, or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad
faith on its part, request and conclusively rely upon
an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or
the Regular Trustees;
(iv) the Property Trustee shall have no duty to see to any
recording, filing, or registration of any instrument
(including any financing or continuation statement or
any filing under tax or securities laws) or any
rerecording, refiling, or registration thereof;
(v) the Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of
such counsel and experts with respect to legal matters
or advice within the scope of such experts' area of
expertise shall be full and complete authorization and
protection in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in accordance
with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and
may include any of its employees. The Property Trustee
shall have the right at any time to seek instructions
concerning the administration of this Declaration from
any court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Declaration at the request or direction of any
Holder, unless such Holder
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shall have provided to the Property Trustee security
and indemnity, reasonably satisfactory to the Property
Trustee, against the costs, expenses (including
attorneys' fees and expenses and the expenses of the
Property Trustee's agents, nominees, or custodians),
and liabilities that might be incurred by it in
complying with such request or direction, including
such reasonable advances as may be requested by the
Property Trustee; provided that, nothing contained in
this Section 3.10(a) shall be taken to relieve the
Property Trustee, upon the occurrence of an Indenture
Event of Default, of its obligation to exercise the
rights and powers vested in it by this Declaration;
(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness, or other paper or document, but the
Property Trustee, in its discretion, may make such
further inquiry or investigation into such facts or
matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees,
or attorneys and the Property Trustee shall not be
responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care
by it hereunder;
(ix) any action taken by the Property Trustee or its agents
hereunder shall bind the Trust and the Holders of the
Securities, and the signature of the Property Trustee
or its agents alone shall be sufficient and effective
to perform any such action and no third party shall be
required to inquire as to the authority of the Property
Trustee to so act or as to its compliance with any of
the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Property
Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Property Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the
Property Trustee (A) may request instructions from the
Holders of the Securities, the Regular Trustees, or the
Sponsor which instructions may only be given by the
Holders of the same proportion in liquidation amount of
the Securities as would be entitled to direct the
Property Trustee under the terms of the Securities in
respect of such remedy, right, or action, (B) may
refrain from enforcing such remedy or right or taking
such other action until such instructions are received,
and (C) shall be protected in conclusively relying on
or acting in accordance with such instructions;
(xi) if no Trust Enforcement Event has occurred and is
continuing and the Property Trustee is required to
decide between alternative causes of action, construe
ambiguous provisions in their Declaration or is unsure
of the application of any provision of their
Declaration, and the matter is not one on which Holders
of Capital Securities are entitled under the
Declaration to vote, then the Property Trustee may, but
shall be under no duty to, take such action as is
directed by the Sponsor and will have no liability
except for its own bad faith, negligence or willful
misconduct;
(xii) except as otherwise expressly provided by this
Declaration, the Property Trustee shall not be under
any obligation to take any action that is discretionary
under the provisions of this Declaration;
(xiii) the Property Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it
without negligence, in good faith, and reasonably
believed by it to be authorized or within the
discretion, rights, or powers conferred upon it by this
Declaration; and
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(xiv) the Property Trustee shall have a lien prior to the
Securities as to all property and funds held by it
hereunder for any amount owing it or any predecessor
Property Trustee, except with respect to funds held in
trust for the benefit of the Holders of particular
Securities.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Property Trustee to perform any act or acts or
exercise any right, power, duty, or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty, or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration other
than Section 6.2, the Delaware Trustee shall not be entitled to exercise any
powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of the Regular Trustees or the Property Trustee described in
this Declaration. Except as set forth in Section 6.2, the Delaware Trustee shall
be a Trustee for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Regular Trustees, and except
as otherwise required by the Business Trust Act, any Regular Trustee is
authorized to execute on behalf of the Trust any documents that the Regular
Trustees have the power and authority to execute pursuant to Section 3.6.
Section 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Securities, the Debentures, or the Indenture.
Section 3.14 Duration of Trust.
The Trust shall exist until terminated pursuant to the
provisions of Article 8 hereof.
Section 3.15 Mergers.
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer, or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c) and Section 8.2.
(b) The Trust may, at the request of the Sponsor, without the
consent of Holders of the Capital Securities, consolidate, amalgamate, merge
with or into, or be replaced by, or convey, transfer, or lease its properties
substantially as an entirety to a trust organized as such under the laws of any
State; provided that:
(i) if the Trust is not the successor, such successor
entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Capital Securities other
securities having substantially the same
terms as the Capital Securities (the
"Successor Securities") so long as the
Successor Securities rank the same as the
Capital Securities rank in priority with
respect to Distributions and payments upon
liquidation, redemption and otherwise;
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(ii) the Sponsor expressly appoints a trustee of such
Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the
Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities
exchange or with any other organization on which the
Capital Securities are then listed or quoted, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer, or lease does not cause the
Capital Securities (including any Successor Securities)
to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer, or lease does not adversely
affect the rights, preferences, and privileges of the
Holders of the Capital Securities (including any
Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease the Sponsor
has received an opinion of independent counsel to the
Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer, or lease
does not adversely affect the rights,
preferences, and privileges of the Holders of
the Capital Securities (including any
Successor Securities) in any material
respect;
(B) following such merger, consolidation,
amalgamation, replacement, conveyance,
transfer, or lease neither the Trust nor the
Successor Entity will be required to register
as an Investment Company; and
(C) following such merger, consolidation,
amalgamation, or replacement, the Trust (or
the Successor Entity) will continue to be
classified as a grantor trust for United
States federal income tax purposes;
(viii) the Sponsor or any permitted successor or assignee
owns all of the Common Securities and guarantees the
obligations of such Successor Entity under the
Successor Securities at least to the extent provided by
the Guarantee; and
(ix) such Successor Entity expressly assumes all of the
obligations of the Trust with respect to the Trustees.
(c) Notwithstanding Section 3.15(b), the Trust shall not,
except with the consent of Holders of 100% in Liquidation Amount of the
Securities, consolidate, amalgamate, merge with or into any other entity, or be
replaced by, or convey, transfer, or lease its properties and assets
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer, or lease
would cause the Trust or Successor Entity to be classified as other than a
grantor trust for United States federal income tax purposes and each Holder of
the Securities not to be treated as owning an undivided beneficial ownership
interest in the Debentures.
Section 3.16 Property Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition,
or other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities shall then be due and payable as therein expressed or by
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declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding, or otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Securities (or, if the
Securities are original issue discount Securities, such portion of the
liquidation amount as may be specified in the terms of such Securities) and to
file such other papers or documents as may be necessary or advisable in order to
have the claims of the Property Trustee (including any claim for the reasonable
compensation, expenses, disbursements, and advances of the Property Trustee, its
agents and counsel) and of the Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator, or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements, and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the
Property Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment, or compensation
affecting the Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
ARTICLE 4
SPONSOR
Section 4.1 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare, execute, and file a registration statement on
the appropriate form with the Commission relating to the registration of the
Capital Securities under Section 12(b) or 12(g) of the Exchange Act;
(b) to determine the States in which to take appropriate action
to qualify or register for sale all or part of the Capital Securities and to do
any and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States;
(c) to prepare for filing and cause the filing by the Trust and
execute on behalf of the Trust, if the Sponsor deems it to be appropriate, of an
application to The New York Stock Exchange or any other national stock exchange
or the Nasdaq National Market or any foreign national stock exchange for listing
or quotation upon notice of issuance of any Capital Securities; and
(d) to negotiate the terms of, and to execute on behalf of the
Trust and deliver, an underwriting agreement providing for the sale of the
Capital Securities.
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Section 4.2 Compensation, Indemnification, and Expenses of the
Trustee.
Pursuant to Sections 607 and 1009 of the Indenture, the
Sponsor, in its capacity as Debenture Issuer, agrees:
(1) to pay to the Trustees from time to time such compensation
as the Debenture Issuer and the Trustees shall from time to time agree
in writing for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust);
(2) to reimburse the Trustees upon their request for all
reasonable expenses, disbursements, and advances incurred or made by
the Trustees in accordance with any provision of the Indenture
(including the compensation and the expenses and disbursements of its
agent and counsel), except any such expense, disbursement, or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Property Trustee and the Delaware Trustee
and their respective officers, directors, employees, and authorized
agents for, and to hold each of them harmless against, any loss,
liability, or expense including taxes (other than taxes based upon,
measured by or determined by the income of any Trustee) incurred
without negligence or bad faith on the part of the Property Trustee,
the Delaware Trustee, or their respective officers, directors,
employees, and authorized agents, as the case may be, arising out of or
in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses of defending any of
them against any claim or liability in connection with the exercise or
performance of any of their respective powers or duties hereunder; the
provisions of this Section 4.2 shall survive the resignation or removal
of the Delaware Trustee or the Property Trustee or the termination of
this Declaration.
ARTICLE 5
TRUST COMMON SECURITIES HOLDER
Section 5.1 Debenture Issuer's Purchase of Common Securities.
On the Closing Date the Debenture Issuer will purchase all of
the Common Securities issued by the Trust, for an amount at least equal to 3% of
the capital of the Trust, at the same time as the Capital Securities are sold.
Section 5.2 Covenants of the Common Securities Holder.
For so long as the Capital Securities remain outstanding, the
Common Securities Holder will covenant (i) to maintain directly 100% ownership
of the Common Securities, (ii) to cause the Trust to remain a statutory business
trust and not to voluntarily dissolve, wind up, liquidate, or terminate the
Trust, except as permitted by this Declaration, (iii) to use its reasonable best
efforts to ensure that the Trust will not be an investment company for purposes
of the Investment Company Act, and (iv) to take no action which would be
reasonably likely to cause the Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States federal
income tax purposes.
ARTICLE 6
TRUSTEES
Section 6.1 Number of Trustees.
The number of Trustees initially shall be five (5), and:
(a) at any time before the issuance of any Securities, the
Sponsor may, by written instrument, increase or decrease the number of Trustees;
and
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(b) after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
Liquidation Amount of the Common Securities voting as a class at a meeting of
the Holders of the Common Securities or by written consent in lieu of such
meeting; provided that (1) the Delaware Trustee, in the case of a natural
person, shall be a person who is a resident of the State of Delaware or that, if
not a natural person, is an entity which has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law;
(2) at least one Regular Trustee is an employee or officer of, or is affiliated
with, the Sponsor; and (3) one Trustee shall be the Property Trustee for so long
as this Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware Trustee if it meets
the applicable requirements.
Section 6.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its principal
place of business in the State of Delaware, and otherwise meets the requirements
of applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
Section 6.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee which shall act as
Property Trustee which shall:
(i) not be an Affiliate of the Sponsor or any Person
involved in the organization or operation of the
Sponsor;
(ii) not offer or provide credit or credit enhancement to
the Trust; and
(iii) be a corporation organized and doing business under
the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or
a corporation or other Person permitted by the
Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to
exercise corporate trust owners, 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 6.3(a)(iii), the combined capital and
surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be
eligible to so act under Section 6.3(a), the Property Trustee shall promptly
resign in the manner and with the effect set forth in Section 6.6(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Property Trustee and the Holder of the Common Securities (as
if it were the Obliger referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Guarantee, the Indenture, the Debentures, and the
Securities shall be deemed to be specifically described in this Declaration for
purposes of clause (i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
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Section 6.4 Qualifications of Regular Trustees and Delaware
Trustee Generally.
Each Regular Trustee and the Delaware Trustee (unless the
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
Section 6.5 Initial Regular Trustees.
The initial Regular Trustees shall be:
Milton D. Baughman, Beth A. Russell, and Paul V. Sebert, the
business address of all of whom is c/o Huntington Bancshares Incorporated,
Huntington Center, 41 South High Street, Columbus, Ohio 43287.
Section 6.6 Appointment, Removal, and Resignation of Trustees.
(a) Subject to Section 6.6(b), Declaration Trustees may be
appointed, removed, or replaced with or without cause at any time by the
Sponsor, as the Common Securities Holder, except, however, if a Trust
Enforcement Event has occurred and is continuing, then the Property Trustee and
the Delaware Trustee may be removed at such time by the vote of the Holders of a
Majority in Liquidation Amount of the Capital Securities voting as a class at a
meeting of the Holders of the Capital Securities; provided, however, that in no
event will the holders of the Capital Securities have the right to appoint,
remove, or replace the Regular Trustees which rights are vested exclusively in
the Sponsor, as Holder of the Common Securities.
(b) The Trustee that acts as Property Trustee shall not be
removed in accordance with Section 6.6(a) until a successor Trustee possessing
the qualifications to act as Property Trustee under Section 6.3(a) (a "Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Regular Trustees and the Sponsor. The Trustee that acts as Delaware Trustee
shall not be removed in accordance with Section 6.6(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under Sections
6.2 and 6.4 (a "Successor Delaware Trustee") has been appointed and has accepted
such appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Regular Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his
or its successor shall have been appointed, until his death or its dissolution,
or until his or its removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
signed by the Trustee and delivered to the Sponsor and the Trust, which
resignation shall take effect upon such delivery or upon such later date as is
specified therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been
appointed and has accepted such appointment
by instrument executed by such Successor
Property Trustee and delivered to the Trust,
the Sponsor, and the resigning Property
Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds
thereof distributed to the holders of the
Securities; and
(ii) no such resignation of the Trustee that acts as the
Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted
such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust,
the Sponsor, and the resigning Delaware Trustee.
(d) The Holders of the Common Securities shall use their best
efforts promptly to appoint a Successor Delaware Trustee or Successor Property
Trustee, as the case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this Section 6.6.
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(e) If no Successor Property Trustee or Successor Delaware
Trustee, as the case may be, shall have been appointed and accepted appointment
as provided in this Section 6.6 within 30 days after delivery to the Sponsor and
the Trust of an instrument of resignation or removal, the resigning or removed
Property Trustee or Delaware Trustee, as applicable, may petition any court of
competent jurisdiction for appointment of a Successor Property Trustee or
Successor Delaware Trustee, as applicable. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a Successor
Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for
the acts or omissions to act of any Successor Property Trustee or Successor
Delaware Trustee, as the case may be.
(g) Upon the resignation or removal of the Property Trustee,
such Property Trustee shall be paid all amounts due and owing.
Section 6.7 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the
number of Trustees is not reduced pursuant to Section 6.1, or if the number of
Trustees is increased pursuant to Section 6.1, a vacancy shall occur. The
vacancy shall be filled with a Trustee appointed in accordance with Section 6.6.
Section 6.8 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence, or incapacity to perform the duties of a
Trustee shall not operate to annul the Trust. Whenever a vacancy in the number
of Regular Trustees shall occur, until such vacancy is filled by the appointment
of a Regular Trustee in accordance with Section 6.6, the Regular Trustees in
office, regardless of their number, shall have all the powers granted to the
Regular Trustees and shall discharge all the duties imposed upon the Regular
Trustees by this Declaration.
Section 6.9 Delegation of Power.
(a) Any Regular Trustee may, by power of attorney consistent
with applicable law, delegate to any natural person over the age of 21 his, her,
or its power for the purpose of executing any documents contemplated in Section
3.6, including making governmental filings.
(b) The Regular Trustees shall have power to delegate from time
to time to such of their number or to officers of the Trust the doing of such
things and the execution of such instruments either in the name of the Trust or
the names of the Regular Trustees or otherwise as the Regular Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 6.10 Merger, Conversion, Consolidation, or Succession
to Business.
Any corporation into which the Property Trustee, the Delaware
Trustee, or a Regular Trustee, if a legal entity, as the case may be, may be
merged or converted or with which either may be consolidated, or any corporation
resulting from an merger, conversion, or consolidation to which the Property
Trustee, the Delaware Trustee, or a Regular Trustee, if a legal entity, as the
case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the such Trustee shall be the
successor of such Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
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ARTICLE 7
THE SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Regular Trustees shall on behalf of the Trust issue a
class of capital securities representing undivided preferred beneficial
ownership interests in the assets of the Trust (the "Capital Securities"), and a
class of common securities representing undivided beneficial ownership interests
in the assets of the Trust (the "Common Securities"). The aggregate Liquidation
Amount of Capital Securities and Common Securities that may be issued by the
Trust is unlimited; provided that the Common Securities outstanding at any time
must have an aggregate Liquidation Amount with respect to the assets of the
Trust equal to at least 3% of the assets of the Trust; and provided further that
after the initial issuance of Capital Securities and Common Securities, the
Trust may not issue additional Capital Securities or Common Securities unless
the Trustees have received an opinion of counsel to the effect that the issuance
of such securities will not affect the Trust's status as a grantor trust for
United States federal income tax purposes.
(i) Capital Securities. The Capital Securities of the Trust
have a Liquidation Amount with respect to the assets of
the Trust of $________ per Capital Security. The
Capital Security Certificates evidencing the Capital
Securities shall be substantially in the form of
Exhibit A- 1 to the Declaration, with such changes and
additions thereto or deletions therefrom as may be
required by ordinary usage, custom, or practice.
(ii) Common Securities. The Common Securities of the Trust
have a Liquidation Amount with respect to the assets of
the Trust of $_______ per Common Security. The Common
Security Certificates evidencing the Common Securities
shall be substantially in the form of Exhibit A-2 to
the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by
ordinary usage, custom, or practice.
The Trust shall issue no securities or other interests in the
assets of the Trust other than the Capital Securities and the Common Securities.
(b) The Common Securities will rank pari passu with the Capital
Securities and payment of Distributions on, and payments of the Redemption Price
upon a redemption of, the Capital Securities and the Common Securities, as
applicable, shall be made Pro Rata based on the Liquidation Amount of such
Capital Securities and Common Securities; provided, however, that if on any date
on which amounts payable on Distribution or redemption an Indenture Event of
Default shall have occurred and be continuing, no payment of any Distribution,
or Redemption Price on, 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 Capital Securities for all
Distribution periods terminating on or prior thereto, or in the case of amounts
payable on redemption the full amount of the Redemption Price for all of the
outstanding Capital Securities then called for redemption, shall have been made
or provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or payments of
the Redemption Price upon a redemption of, the Capital Securities then due and
payable.
(c) The Certificates shall be signed on behalf of the Trust by
a Regular Trustee. Such signature shall be the manual or facsimile signature of
any Regular Trustee. In case a Regular Trustee of the Trust who shall have
signed any of the Certificates shall cease to be such Regular Trustee before the
Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Regular Trustee; and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Regular Trustees of the Trust, although at the date of
the execution and delivery of the Declaration any such person was not such a
Regular Trustee. Certificates shall be printed, lithographed, or engraved or may
be produced in any other manner as is reasonably
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acceptable to the Regular Trustees, as evidenced by their execution thereof, and
may have such letters, numbers, or other marks of identification or designation
and such legends or endorsements as the Regular Trustees may deem appropriate,
or as may be required to comply with any law or with any rule or regulation of
any stock exchange on which Securities may be listed, or to conform to usage.
A Capital Security Certificate shall not be valid until
authenticated by the manual signature of an authorized officer of the Property
Trustee. Such signature shall be conclusive evidence that the Certificate has
been authenticated under this Declaration.
Upon a written order of the Trust signed by one Regular
Trustee, the Property Trustee shall authenticate the Capital Securities
Certificates for original issue.
The Property Trustee may appoint an authenticating agent
acceptable to the Trust to authenticate the Capital Securities Certificates. An
authenticating agent may authenticate the Capital Securities Certificates
whenever the Property Trustee may do so. Each reference in this Declaration to
authentication by the Property Trustee includes authentication by such agent. An
authenticating agent has the same rights as the Property Trustee to deal with
the Sponsor or an Affiliate of the Sponsor.
(d) The consideration received by the Trust for the issuance of
the Securities shall constitute a contribution to the capital of the Trust and
shall not constitute a loan to the Trust.
(e) Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid, and non-assessable.
(f) Every Person, by virtue of having become a Holder or a
Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the terms of the Securities, the
Guarantee, the Indenture, and the Debentures.
(g) The Securities shall have no preemptive or similar rights.
Section 7.2 Distributions.
(a) Holders of Securities shall be entitled to receive
cumulative cash Distributions in U.S. dollars at a [fixed/variable] per annum
rate on the stated Liquidation Amount equal to the [fixed/variable] per annum
rate on the Debentures calculated on the basis of [a 360-day year consisting of
twelve 30-day months/the actual number of days elapsed in a 360-day year.] For
any period shorter than a full _______ period, Distributions will be computed on
the basis of the actual number of days elapsed in such ___________ period.
Distributions shall be made on the Capital Securities and the Common Securities
on a Pro Rata basis. Distributions not paid on the scheduled payment date will
accumulate and compound at the rate payable on the Debentures, to the extent
permitted by applicable law ("Compounded Distributions"). "Distributions" shall
mean ordinary cumulative distributions together with any Compounded
Distributions. If and to the extent that the Debenture Issuer makes a payment of
interest (including Additional Interest (as defined in the Indenture)), premium,
and/or principal on the Debentures held by the Property Trustee (the amount of
any such payment being a "Payment Amount"), the Property Trustee shall and is
directed, to the extent funds are available for that purpose, to make a Pro Rata
distribution (a "Distribution") of the Payment Amount to Holders, subject to the
terms of Section 7.1(b).
(b) Distributions on the Securities will be cumulative, will
accrue from the date of initial issuance, and will be payable
[quarterly/semi-annually] in arrears on the last day of ______________ and
________________, commencing _____________, 19__, when, as, and if available for
payment, by the Property Trustee, except as otherwise described below. If
Distributions are not paid when scheduled, the accrued Distributions shall be
paid to the Holders of record of Securities as they appear on the books and
records of the Trust on the record date as determined under Section 7.2(c).
(c) Distributions on the Securities will be payable to the
Holders thereof as they appear on the books and records of the Trust on the
relevant record dates, which relevant record date shall be, so long as the
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Securities remain in book-entry form, one Business Day prior to the date of
distribution, and in the event that the Securities are not in book-entry form,
the fifteenth day of the month of the relevant date of distribution. In the
event that any date on which Distributions are payable on the Securities is not
a Business Day, payment of the Distribution payable on such date will be made on
the next succeeding day which is a Business Day (without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date.
Section 7.3 Redemption of Securities; Distribution of
Debentures.
(a) Upon the repayment or redemption, in whole or in part, of
the Debentures, the proceeds from such repayment or redemption shall be applied
by the Property Trustee to redeem a Like Amount of the Capital Securities at a
redemption price equal to the aggregate Liquidation Amount of such Capital
Securities plus an amount equal to accumulated and unpaid Distributions thereon
through the date of the redemption or such lesser amount as shall be received by
the Trust in respect of the Debentures so repaid or redeemed (the "Redemption
Price"). Holders will be given not less than 30 nor more than 60 days notice of
such redemption.
(b) If, at any time, a Special Event shall occur and be
continuing, the Sponsor may elect to, unless the Debentures are redeemed, within
90 days following the occurrence of such Special Event cause the dissolution of
the Trust upon not less than 30 nor more than 60 days' notice and, after
satisfaction of creditors, if any, cause the Debentures to be distributed to the
holders of the Common Securities and the Capital Securities in liquidation of
the Trust.
(c) On the date fixed for any distribution of Debentures, upon
dissolution of the Trust, (i) the Capital Securities and the Common Securities
will no longer be deemed to be outstanding and (ii) certificates representing
Securities will be deemed to represent the Debentures having an aggregate
principal amount equal to the stated liquidation amount of, and bearing accrued
and unpaid distributions equal to accrued and unpaid Distributions on, such
Securities until such certificates are presented to the Sponsor or its agent for
transfer or reissuance.
Section 7.4 Redemption Procedures.
(a) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution Notice")
will be given by the Trust by mail to each Holder of Securities to be redeemed
or exchanged not fewer than 30 nor more than 60 days before the date fixed for
redemption or exchange thereof which, in the case of a redemption, will be the
date fixed for redemption of the Debentures. For purposes of the calculation of
the date of redemption or exchange and the dates on which notices are given
pursuant to this Section 7.4, a Redemption/Distribution Notice shall be deemed
to be given on the seventh day after such notice is first mailed by first-class
mail, postage prepaid, to Holders of Securities. Each Redemption/Distribution
Notice shall be addressed to the Holders of Securities at the address of each
such Holder appearing in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(b) Except as provided in Section 7.1(b), if fewer than all the
outstanding Securities are to be so redeemed, the Common Securities and the
Capital Securities will be redeemed Pro Rata. The particular Capital Securities
to be redeemed shall be selected on a pro rata basis not more than 60 days prior
to the Redemption Date by the Property Trustee from the outstanding Capital
Securities not previously called for redemption, by such method as the Property
Trustee shall deem fair and appropriate, provided that so long as the Capital
Securities are in book-entry form, such selection shall be made in accordance
with the customary procedures for the Depository. The Property Trustee shall
promptly notify the Trust registrar in writing of the Capital Securities
selected for redemption and, in the case of any Capital Securities selected for
partial redemption, the liquidation amount of such Capital Securities to be
redeemed. The Trust may not redeem the Securities in part unless all accrued and
unpaid interest has been paid in full on all Securities then outstanding plus
accrued but unpaid interest to the date of redemption. For all purposes of this
Declaration, unless the context otherwise requires, all provisions relating to
the redemption of Capital Securities shall relate, in the case of any Capital
Security redeemed or to be redeemed only in part, to the portion of the
aggregate Liquidation Amount of Capital Securities which has been or is to be
redeemed.
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(c) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this Section 7.4 (which notice will be
irrevocable), then (A) by 12:00 noon, New York City time, on the redemption date
with respect to Global Securities, the Property Trustee, to the extent funds are
available, will deposit irrevocably with the Depository (in the case of
book-entry form Capital Securities) or its nominee (or successor Depository or
its nominee) funds sufficient to pay the applicable Redemption Price with
respect to the Capital Securities held in the Depository and will give the
Depository irrevocable instructions and authority to pay the Redemption Price to
the Holders of the Capital Securities held through the Depository, and (B) with
respect to Capital Securities and Common Securities issued in definitive form,
the Property Trustee, to the extent funds are available, will irrevocably
deposit with the Paying Agent for such Capital Securities and Common Securities
funds sufficient to pay the relevant Redemption Price to the Holders and will
give the Paying Agent irrevocable instructions and authority to pay the
Redemption Price to such Holders upon surrender of their certificates evidencing
the Capital Securities or Common Securities. If a Redemption/Distribution Notice
shall have been given and funds deposited as required, then immediately prior to
the close of business on the date of such deposit, Distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption Price.
If any date fixed for redemption of Securities is not a Business Day, then
payment of the Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price in respect of any
Securities is improperly withheld or refused and not paid either by the Property
Trustee or by the Sponsor as guarantor pursuant to the Guarantee, Distributions
on such Securities will continue to accrue at the then applicable rate from the
original redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for purposes of
calculating the Redemption Price.
Neither the Regular Trustees nor the Trust shall be required to
register or cause to be registered the transfer or exchange of any Securities
that have been called for redemption, except in the case of any Securities being
redeemed in part, any portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including,
without limitation, United States Federal securities laws), the Debenture Issuer
or its subsidiaries may at any time and from time to time purchase outstanding
Capital Securities by tender, in the open market, or by private agreement.
Section 7.5 Voting Rights of Capital Securities.
(a) Except as provided under this Article 7 and as otherwise
required by the Business Trust Act, the Trust Indenture Act, and other
applicable law, the Holders of the Capital Securities will have no voting
rights.
(b) Subject to the requirement of the Property Trustee
obtaining a tax opinion in certain circumstances set forth in Section 7.5(d)
below, the Holders of a Majority in Liquidation Amount of the Capital Securities
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Property Trustee, or to direct the
exercise of any trust or power conferred upon the Property Trustee under the
Declaration, including the right to direct the Property Trustee, as Holder of
the Debentures, to (i) exercise the remedies available to it under the Indenture
as a Holder of the Debentures or (ii) consent to any amendment or modification
of the Indenture or the Debentures where such consent shall be required;
provided, however, that where a consent or action under the Indenture would
require the consent or act of the Holders of more than a majority in aggregate
principal amount of Debentures affected thereby, only the Holders of the
percentage of the aggregate stated liquidation amount of the Capital Securities
which is at least equal to the percentage required under the Indenture may
direct the Property Trustee to give such consent to take such action.
(c) If the Property Trustee fails to enforce its rights under
the Debentures after a Holder of record of Capital Securities has made a written
request, such Holder of record of Capital Securities may, to the extent
permitted by applicable law, institute a legal proceeding directly against the
Debenture Issuer to enforce the Property Trustee's rights under the Indenture
without first instituting any legal proceeding against the Property Trustee or
any other person or entity. Notwithstanding the foregoing, if a Trust
Enforcement Event has occurred and is continuing
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and such event is attributable to the failure of the Debenture Issuer to make
any required payment when due under the Indenture, then a Holder of Capital
Securities may directly institute a proceeding against the Debenture Issuer for
enforcement of such payment under the Indenture.
(d) The Property Trustee shall notify all Holders of the
Capital Securities of any written notice of any Indenture Event of Default
received from the Debenture Issuer with respect to the Debentures. Such notice
shall state that such Indenture Event of Default also constitutes a Trust
Enforcement Event. Except with respect to directing the time, method, and place
of conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.5(b)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that as a result of such action, the Trust will not fail
to be classified as a grantor trust for United States federal income tax
purposes and each Holder will be treated as owning an undivided beneficial
ownership interest in the Debentures.
(e) In the event the consent of the Property Trustee, as the
Holder of the Debentures, is required under the Indenture with respect to any
amendment or modification of the Indenture, the Property Trustee shall request
the direction of the Holders of the Securities with respect to such amendment or
modification and shall vote with respect to such amendment or modification as
directed by a Majority in Liquidation Amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require the consent of the Holders of more than a majority in aggregate
principal amount of the Debentures, the Property Trustee may only give such
consent at the direction of the Holders of at least the same proportion in
aggregate stated liquidation amount of the Securities. The Property Trustee
shall not take any such action in accordance with the directions of the Holders
of the Securities unless the Property Trustee has obtained an opinion of tax
counsel to the effect that, as a result of such action, the Trust will not be
classified as other than a grantor trust for United States federal income tax
purposes and each Holder will be treated as owning an undivided beneficial
ownership interest in the Debentures.
(f) A waiver of an Indenture Event of Default with respect to
the Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(g) Any required approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of Capital Securities
convened for such purpose, at a meeting of all of the Holders of Securities or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Capital Securities are entitled to vote, or of any
matter upon which action by written consent of such Holders is to be taken, to
be mailed to each Holder of record of Capital Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(h) No vote or consent of the Holders of Capital Securities
will be required for the Trust to redeem and cancel Capital Securities or
distribute Debentures in accordance with the Declaration.
(i) Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Securities that are owned at such time by the Debenture Issuer or any
Trustee or any entity directly or indirectly controlled by, or under direct or
indirect common control with, the Debenture Issuer or any Trustee, shall not be
entitled to vote or consent and shall, for purposes of such vote or consent, be
treated as if such Securities were not outstanding, provided, however that
persons otherwise eligible to vote to whom the Debenture Issuer or any Trustee
or any of their subsidiaries have pledged Capital Securities may vote or consent
with respect to such pledged Capital Securities under any of the circumstances
described herein.
(j) Holders of the Capital Securities will have no rights to
appoint or remove the Trustees, who may be appointed, removed, or replaced
solely by the Debenture Issuer, as the Holder of all of the Common Securities.
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Section 7.6 Voting Rights of Common Securities.
(a) Except as provided under Section 6.1(b) or this Section 7.6
or as otherwise required by the Business Trust Act, the Trust Indenture Act, or
other applicable law or provided by the Declaration, the Holders of the Common
Securities will have no voting rights.
(b) The Holders of the Common Securities are entitled, in
accordance with Article 6 of the Declaration, to vote to appoint, remove, or
replace any Trustee or to increase or decrease the number of Trustees.
(c) Subject to Section 2.6 of the Declaration and only after
all Trust Enforcement Events with respect to the Capital Securities have been
cured, waived, or otherwise eliminated and subject to the requirement of the
Property Trustee obtaining a tax opinion in certain circumstances set forth in
this paragraph (c), the Holders of a Majority in Liquidation Amount of the
Common Securities have the right to direct the time, method, and place of
conducting any proceeding for any remedy available to the Property Trustee, or
direct the exercise of any trust or power conferred upon the Property Trustee
under the Declaration, including the right to direct the Property Trustee, as
Holder of the Debentures, to (i) exercise the remedies available to it under the
Indenture as a Holder of the Debentures, or (ii) consent to any amendment or
modification of the Indenture or the Debentures where such consent shall be
required; provided, however, that where a consent or action under the Indenture
would require the consent or act of the Holders of more than a majority in
aggregate principal amount of Debentures affected thereby, only the Holders of
the percentage of the aggregate stated liquidation amount of the Common
Securities which is at least equal to the percentage required under the
Indenture may direct the Property Trustee to have such consent or take such
action. Except with respect to directing the time, method, and place of
conducting a proceeding for a remedy, the Property Trustee shall be under no
obligation to take any of the actions described in clause 7.6(c)(i) and (ii)
above unless the Property Trustee has obtained an opinion of independent tax
counsel to the effect that, as a result of such action, for United States
federal income tax purposes the Trust will not fail to be classified as a
grantor trust and each Holder will be treated as owning an undivided beneficial
interest in the Debentures.
(d) If the Property Trustee fails to enforce its rights under
the Debentures after a Holder of record of Common Securities has made a written
request, such Holder of record of Common Securities may, to the extent permitted
by applicable law, directly institute a legal proceeding directly against the
Debenture Issuer, as sponsor of the Trust, to enforce the Property Trustee's
rights under the Debentures without first instituting any legal proceeding
against the Property Trustee or any other person or entity.
(e) A waiver of an Indenture Event of Default with respect to
the Debentures will constitute a waiver of the corresponding Trust Enforcement
Event.
(f) Any required approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of Common Securities
convened for such purpose, at a meeting of all of the Holders of Securities, or
pursuant to written consent. The Regular Trustees will cause a notice of any
meeting at which Holders of Common Securities are entitled to vote, or of any
matter on which action by written consent of such Holders is to be taken, to be
mailed to each Holder of Common Securities. Each such notice will include a
statement setting forth the following information: (i) the date of such meeting
or the date by which such action is to be taken; (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(g) No vote or consent of the Holders of Common Securities will
be required for the Trust to redeem and cancel Common Securities or to
distribute Debentures in accordance with the Declaration and the terms of the
Securities.
Section 7.7 Paying Agent.
In the event that any Capital Securities are not in book-entry
only form, the Trust shall maintain in the Borough of Manhattan, City of New
York, State of New York, an office or agency where the Capital Securities may be
presented for payment (a "Paying Agent"). The Trust may appoint the Paying
Agent and may appoint additional Paying Agents in such other locations as it
shall determine. The term "Paying Agent" includes any additional Paying Agents.
The Trust may change any Paying Agent without prior notice to the Holders. The
Trust shall notify the Property Trustee of the name and address of any Paying
Agent not a party to this Declaration. If the Trust fails to appoint or maintain
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another entity as Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as a Paying Agent. The Chase Manhattan
Bank shall initially act as Paying Agent for the Capital Securities and The
Chase Manhattan Bank will act as initial Paying Agent for the Common Securities.
In the event the Property Trustee shall no longer be the Paying Agent, the
Regular Trustees shall appoint a successor (which shall be a bank or trust
company acceptable to the Regular Trustees and Debenture Issuer) to act as
Paying Agent. The Paying Agent shall be permitted to resign as Paying Agent upon
60 days' written notice to the Property Trustee and the Debenture Issuer.
Section 7.8 Transfer of Securities.
(a) The Trust shall cause to be kept at the Corporate Trust
Office of the Property Trustee a register (the register maintained in such
office being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Trust shall
provide for the registration of Capital Securities and of transfers of Capital
Securities. The Property Trustee is hereby appointed "Security Registrar" for
the purpose of registering Capital Securities and transfers of Capital
Securities as herein provided.
(b) Upon surrender for registration of transfer of any Security
at an office or agency of the Trust designated for such purpose, the Trust shall
execute, upon receipt of an order to authenticate, and the Property Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate principal amount.
(c) At the option of the Holder, Securities may be exchanged
for other Securities of any authorized denominations and of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Trust shall execute, and, in the case of the Capital Securities, the Property
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
(d) Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Trust) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Trust duly executed, by the Holder thereof or his attorney duly authorized
in writing.
(e) No service charge shall be made for any registration of
transfer or exchange of Securities, but the Trust may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities.
(f) If the Securities are to be redeemed in part, the Trust
shall not be required (A) to issue, register the transfer of or exchange 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 any such Securities selected
for redemption under Section 7.4 and ending at the close of business on the day
of such mailing, or (B) to register the transfer of or exchange any Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
Section 7.9 Mutilated, Destroyed, Lost, or Stolen Certificates.
If:
(a) any mutilated Certificates should be surrendered to the
Regular Trustees, or if the Regular Trustees shall receive evidence to their
satisfaction of the destruction, loss, or theft of any Certificate; and
(b) there shall be delivered to the Regular Trustees such
security or indemnity as may be required by them to keep each of them, the
Sponsor, and the Trust harmless, then, in the absence of notice that such
Certificate shall have been acquired by a bona fide purchaser, any Regular
Trustee on behalf of the Trust shall execute and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost, or stolen Certificate, a new
Certificate of like denomination. In connection with the issuance of any new
Certificate under this Section 7.9, the Regular Trustees may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute conclusive evidence
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of an ownership interest in the relevant Securities, as if originally issued,
whether or not the lost, stolen, or destroyed Certificate shall be found at any
time.
Section 7.10 Deemed Security Holders.
The Trustees may treat the Person in whose name any Certificate
shall be registered on the books and records of the Trust as the sole holder of
such Certificate and of the Securities represented by such Certificate for
purposes of receiving Distributions and for all other purposes whatsoever and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such Certificate or in the Securities represented by such
Certificate on the part of any Person, whether or not the Trust shall have
actual or other notice thereof.
Section 7.11 Global Securities.
If the Trust shall establish that the Capital Securities are to
be issued in global form (each, a "Global Security"), then a Regular Trustee on
behalf of the Trust shall execute, upon receipt of an order to authenticate, and
the Property Trustee shall authenticate and deliver one or more Global
Securities that (i) shall represent and shall be denominated in an amount equal
to the aggregate liquidation amount of all of the Capital Securities to be
issued in the form of Global Securities and not yet cancelled, (ii) shall be
registered in the name of the Depository for such Global Security or Capital
Securities or the nominee of such Depository, and (iii) shall be delivered by
the Property Trustee to such Depository or pursuant to such Depository's
instructions. Global Securities shall bear a legend substantially to the
following effect:
"This Capital Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is registered in the name of a
Depository or a nominee of a Depository. Notwithstanding the provisions of
Section 7.8 of the Declaration, unless and until it is exchanged in whole or in
part for Capital Securities in definitive registered form, a Global Security
representing all or a part of the Capital Securities may not be transferred in
the manner provided in Section 7.8 of the Declaration except as a whole by the
Depository to a nominee of such Depository or by a nominee of such Depository to
such Depository or another nominee of such Depository or by such Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Every Capital Security delivered upon registration or transfer of,
or in exchange for, or in lieu of, this Global Security shall be a Global
Security subject to the foregoing, except in the limited circumstances described
above. Unless this certificate is presented by an authorized representative of
the Depository to the Trust or its agent for registration of transfer, exchange
or payment, and any certificate issued is registered such name as is requested
by an authorized representative of the Depository (and any payment is to be made
to such entity as is requested by an authorized representative of the
Depository), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof,
______________________, has an interest herein."
Definitive Capital Securities issued in exchange for all or a
part of a Global Security pursuant to this Section 7.11 shall be registered in
such names and in such authorized denominations as the Depository, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Property Trustee. Upon execution and authentication, the Property
Trustee shall deliver such definitive Capital Securities to the persons in whose
names such definitive Capital Securities are so registered.
At such time as all interests in Global Securities have been
redeemed, repurchased, or canceled, such Global Securities shall be, upon
receipt thereof, canceled by the Property Trustee in accordance with its
standing procedures in effect from time to time and instructions existing
between the Depository and the Custodian. At any time prior to such
cancellation, if any interest in Global Securities is exchanged for definitive
Capital Securities, redeemed, canceled, or transferred to a transferee who
receives definitive Capital Securities therefor or any definitive Capital
Security is exchanged or transferred for part of Global Securities, the
principal amount of such Global Securities shall, in accordance with the
standing procedures in effect from time to time and instructions existing
between the Depository and the Custodian, be reduced or increased, as the case
may be, and an endorsement shall be made on such Global Securities by the
Property Trustee or the Custodian, at the direction of the Property Trustee, to
reflect such reduction or increase.
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The Trust and the Property Trustee may for all purposes,
including the making of payments due on the Capital Securities, deal with the
Depository as the authorized representative of the Holders for the purposes of
exercising the rights of Holders hereunder. The rights of the owner of any
beneficial interest in a Global Security shall be limited to those established
by law and agreements between such owners and depositary participants; provided
that no such agreement shall give any rights to any person against the Trust or
the Property Trustee without the written consent of the parties so affected.
Multiple requests and directions from and votes of the Depository as holder of
Capital Securities in global form with respect to any particular matter shall
not be deemed inconsistent to the extent they do not represent an amount of
Capital Securities in excess of those held in the name of the Depository or its
nominee.
If at any time the Depository for any Capital Securities
represented by one or more Global Securities notifies the Trust that it is
unwilling or unable to continue as Depository for such Capital Securities or if
at any time the Depository for such Capital Securities shall no longer be
eligible under this Section 7.11, the Trust shall appoint a successor Depository
with respect to such Capital Securities. If a successor Depository for such
Capital Securities is not appointed by the Trust within 90 days after the Trust
receives such notice or becomes aware of such ineligibility, the Trust's
election that such Capital Securities be represented by one or more Global
Securities shall no longer be effective and a Regular Trustee on behalf of the
Trust shall execute, and the Property Trustee will authenticate and deliver
Capital Securities in definitive registered form, in any authorized
denominations, in an aggregate liquidation amount equal to the principal amount
of the Global Security or Capital Securities representing such Capital
Securities in exchange for such Global Security or Capital Securities.
The Trust may at any time and in its sole discretion determine
that the Capital Securities issued in the form of one or more Global Securities
shall no longer be represented by a Global Security or Securities. In such event
a Regular Trustee on behalf of the Trust shall execute, and the Property
Trustee, shall authenticate and deliver, Capital Securities in definitive
registered form, in any authorized denominations, in an aggregate liquidation
amount equal to the principal amount of the Global Security or Securities
representing such Capital Securities, in exchange for such Global Security or
Securities.
Notwithstanding any other provisions of this Declaration,
Global Securities may not be transferred as a whole except by the Depository to
a nominee of the Depository or by a nominee of the Depository to the Depository
or another nominee of the Depository or by the Depository or any such nominee to
a successor Depository or a nominee of such successor Depository.
Interests of beneficial owners in Global Security may be
transferred or exchanged for definitive Capital Securities and definitive
Capital Securities may be transferred or exchanged for Global Securities in
accordance with rules of the Depository.
Any Capital Security in global form may be endorsed with or
have incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Declaration as may be required by the
Custodian, the Depository, the National Association of Securities Dealers, Inc.,
the New York Stock Exchange, any other national stock exchange, the Nasdaq
National Market, or any foreign national stock exchange in order for the Capital
Securities to be tradeable on the New York Stock Exchange or any other national
stock exchange or the Nasdaq National Market or any foreign national stock
exchange or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange upon
which the Capital Securities may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Capital Securities are subject.
ARTICLE 8
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 Dissolution and Termination of Trust.
(a) The Trust shall dissolve upon the earliest of:
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(i) ___________________, the expiration time of the
Trust;
(ii) any liquidation, insolvency, or similar
proceeding with respect to the Common
Securities Holder or all or substantially all
of its property;
(iii) the redemption of all of the Capital Securities in
connection with the maturity or redemption of all
of the Debentures;
(iv) the entry by a court of competent jurisdiction of
an order for the dissolution of the Trust; and
(v) upon the election of the Sponsor at any time.
The Property Trustee shall receive from the Sponsor prompt
written notice of any event referred to in this Section 8.1(a).
(b) As soon as is practicable after the occurrence of an event
referred to in Section 8.1(a) and upon completion of the winding up of the
Trust, the Trustees shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) Upon an election to dissolve as provided in Section
8.1(a)(v), the Sponsor will have the right, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to cause the distribution
of a Like Amount of corresponding Debentures to the Holders of Securities
(subject to the Sponsor's receipt of prior approval of the Federal Reserve, if
such approval is then required under applicable capital guidelines or policies
of the Federal Reserve).
(d) Notice of dissolution pursuant to Section 8.1(a)(ii) shall
be provided to the Holders of the Securities by the Declaration Trustees within
thirty (30) days of such event.
(e) The provisions of Section 3.9 and Article 9 shall survive
the termination of the Trust.
Section 8.2 Liquidation Distribution Upon Dissolution of the
Trust.
(a) If an early dissolution occurs for any reason other than
the maturity or redemption of all of the Debentures, the Trust shall be
liquidated by the Declaration Trustees as expeditiously as the Declaration
Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
Holders of the Securities a Like Amount of the corresponding Debentures, unless
such distribution is determined by the Property Trustee not to be practicable,
in which event such Holders will be entitled to receive out of the assets of the
Trust available for distribution to Holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to, in
the case of holders of Capital Securities, the aggregate of the Liquidation
Amount plus accrued and unpaid Distributions thereon to the date of payment
(such amount being the "Liquidation Distribution").
(b) If such Liquidation Distribution can be paid only in part
because such Trust has insufficient assets available to pay in full the
aggregate Liquidation Distribution, the amounts payable directly by the Trust on
the Capital Securities shall be paid on a Pro Rata basis. The Holders of the
Common Securities will be entitled to receive distributions upon any such
liquidation Pro Rata with the Holders of the Capital Securities, except that if
an Indenture Event of Default has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities.
(c) After the liquidation date is fixed for any distribution of
corresponding Debentures for Capital Securities, (i) such Capital Securities
will no longer be deemed to be outstanding; (ii) the Depository or its nominee,
as a record holder of Capital Securities, will receive a registered global
certificate or certificates representing the
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corresponding Debentures to be delivered upon such distribution; and (iii) any
certificates representing Capital Securities held in certificated form will be
deemed to represent the corresponding Debentures having a principal amount equal
to the Liquidation Amount of Capital Securities, bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid distributions on Capital
Securities until such certificates are presented for cancellation. At that time,
the Sponsor will issue to such Holder, and the Debenture Trustee will
authenticate, a certificate representing such Debentures.
ARTICLE 9
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES, OR OTHERS
Section 9.1 Liability.
(a) Except as expressly set forth in this Declaration, the
Guarantee, and the terms of the Securities, the Sponsor and the Holder of the
Common Securities:
(i) shall not be personally liable for the return of any
portion of the capital contributions (or any return
thereon) of the Holders of the Securities which shall
be made solely from assets of the Trust; and
(ii) shall not be required to pay to the Trust or to any
Holder of Securities any deficit upon dissolution of
the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all
of the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Securities shall be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware.
Section 9.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible, or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage, or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable or any such loss, damage, or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports, or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Trust, including information, opinions, reports, or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Securities might properly be paid.
Section 9.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating thereto
to the Trust or to any other Covered Person, an Indemnified Person acting under
this Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property
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Trustee under the Trust Indenture Act), are agreed by the parties hereto to
replace such other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provide terms that are, fair and reasonable to the
Trust or any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action, or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement,
transaction, or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith by the Indemnified Person, the resolution, action, or term so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled
to consider such interests and factors as it
desires, including its own interests, and shall have
no duty or obligation to give any consideration to
any interest of or factors affecting the Trust or
any other Person; or
(ii) in its "good faith" or under another express
standard, the Indemnified Person shall act under
such express standard and shall not be subject to
any other or different standard imposed by this
Declaration or by applicable law.
Section 9.4 Indemnification.
(a)(i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Debenture Issuer Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative (other than an action by or in the right of the Trust) by reason
of the fact that he is or was a Debenture Issuer Indemnified Person against
expenses (including attorney fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit, or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no reasonable cause
to believe his conduct was unlawful. The termination of any action, suit, or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Debenture Issuer Indemnified Person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or proceeding,
had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Debenture
Issuer Indemnified Person who was or is a party or is threatened to be made a
party to any threatened, pending, or completed action or suit by or in the right
of the Trust to procure a judgment in its favor by reason of the fact that he is
or was a Debenture Issuer Indemnified Person against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit if he acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in respect of
any claim, issue, or matter as to which such Debenture Issuer Indemnified Person
shall have been adjudged to be liable to the Trust unless and only to the extent
that the Court of Chancery of Delaware or the court in which such action or suit
was brought shall determine upon application that, despite the
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adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem proper.
(iii) Any indemnification under paragraphs (i) and (ii) of
this Section 9.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Debenture Issuer Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set forth in
paragraphs (i) and (ii). Such determination shall be made (1) by the Regular
Trustees by a majority vote of a quorum consisting of such Regular Trustees who
were not parties to such action, suit, or proceeding, (2) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested Regular
Trustees so directs, by independent legal counsel in a written opinion, or (3)
by the Common Security Holder of the Trust.
(iv) Expenses (including attorneys' fees) incurred by a
Debenture Issuer Indemnified Person in defending a civil, criminal,
administrative, or investigative action, suit, or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.4(a) shall be paid by the Debenture
Issuer in advance of the final disposition of such action, suit, or proceeding
upon receipt of an undertaking by or on behalf of such Debenture Issuer
Indemnified Person to repay such amount if it shall ultimately be determined
that he is not entitled to be indemnified by the Debenture Issuer as authorized
in this Section 9.4(a). Notwithstanding the foregoing, no advance shall be made
by the Debenture Issuer if a determination is reasonably and promptly made (i)
by the Regular Trustees by a majority vote of a quorum of disinterested Regular
Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Regular Trustees so directs, by independent legal
counsel in a written opinion, or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Regular Trustees, counsel, or the Common
Security Holder at the time such determination is made, such Debenture Issuer
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in or not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Debenture Issuer Indemnified
Person believed or had reasonable cause to believe his conduct was unlawful. In
no event shall any advance be made in instances where the Regular Trustees,
independent legal counsel, or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or its Common or Capital
Security Holders.
(v) The indemnification and advancement of expenses
provided by, or granted pursuant to, the
other paragraphs of this Section 9.4(a) shall not be deemed exclusive of any
other rights to which those seeking indemnification and advancement of expenses
may be entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Capital Security Holders of the Trust, or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office. All rights to indemnification under
this Section 9.4(a) shall be deemed to be provided by a contract between the
Debenture Issuer and each Debenture Issuer Indemnified Person who serves in such
capacity at any time while this Section 9.4(a) is in effect. Any repeal or
modification of this Section 9.4(a) shall not affect any rights or obligations
then existing.
(vi) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any
person who is or was a Debenture Issuer Indemnified Person against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Debenture Issuer would have the power to
indemnify him against such liability under the provisions of this Section
9.4(a).
(vii) For purposes of this Section 9.4(a), references to
"the Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer, or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee, or
agent of another entity, shall stand in the same position under the provisions
of this Section 9.4(a) with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(viii) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 9.4(a) shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a Debenture Issuer Indemnified Person and shall inure to the benefit of the
heirs, executors, and administrators
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of such a person. The obligation to indemnify as set forth in this Section
9.4(a) shall survive the satisfaction and discharge of this Declaration.
(b) The Debenture Issuer agrees to indemnify the (i) Property
Trustee, (ii) the Delaware Trustee, (iii) an Affiliate of the Property Trustee
and the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees, or agents
of the Property Trustee and the Delaware Trustee (each of the Persons in (i)
through (iv) being referred to as a "Fiduciary Indemnified Person") for, and to
hold each Fiduciary Indemnified Person harmless against, any loss, liability, or
expense incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The obligation to indemnify as set forth in this Section 9.4(b) shall
survive the satisfaction and discharge of this Declaration.
Section 9.5 Outside Businesses.
Any Covered Person, the Sponsor, and any Trustee may engage in
or possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the activities of the
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the activities of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, or any Trustee shall be obligated to
present any particular investment or other opportunity to the Trust even if such
opportunity is of a character that, if presented to the Trust, could be taken by
the Trust, and any Covered Person, the Sponsor, and any Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person and any Trustee may engage or be interested in any financial or
other transaction with the Sponsor or any Affiliate of the Sponsor, or may act
as depository for, trustee or agent for, or act on any committee or body of
holders of, securities or other obligations of the Sponsor or its Affiliates.
ARTICLE 10
ACCOUNTING
Section 10.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
Section 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the Regular
Trustees shall keep, or cause to be kept, full books of account, records, and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles. The
Trust shall use the accrual method of accounting for United States federal
income tax purposes.
(b) The Regular Trustees shall cause to be duly prepared and
delivered to each of the Holders of Securities, an annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Regular Trustees shall
endeavor to deliver all such statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Regular Trustees shall cause to be duly prepared and
filed with the appropriate taxing authority, an annual United States federal
income tax return, on a Form 1041 or such other form required by United
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States federal income tax law, and any other annual income tax returns required
to be filed by the Regular Trustees on behalf of the Trust with any state or
local taxing authority.
Section 10.3 Banking.
The Trust shall maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Account and no other funds of the Trust shall be
deposited in the Property Account. The sole signatories for such accounts shall
be designated by the Regular Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Account.
Section 10.4 Withholding.
The Trust and the Regular Trustees shall comply with all
withholding requirements under United States federal, state, and local law. The
Trust shall request, and the Holders shall provide to the Trust, such forms or
certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Regular Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to distributions or allocations to any Holder, the amount withheld shall
be deemed to be a distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
ARTICLE 11
AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
(a) Except as otherwise provided in this Declaration or by
any applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed by (i) the Regular Trustees (or, if
there are more than two Regular Trustees, a majority of the Regular Trustees)
and (ii) by the Property Trustee if the amendment affects the rights, powers,
duties, obligations, or immunities of the Property Trustee; (iii) by the
Delaware Trustee if the amendment affects the rights, powers, duties,
obligations, or immunities of the Delaware Trustee; and (iv) the Sponsor.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations, or
immunities of the Property Trustee, the Property
Trustee shall have first received:
a. an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is
permitted by, and conforms to, the terms of
this Declaration (including the terms of the
Securities); and
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b. an opinion of counsel (who may be counsel to
the Sponsor or the Trust) that such amendment
is permitted by, and conforms to, the terms
of this Declaration (including the terms of
the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Trust to be classified other than
as a grantor trust for United States federal
income tax purposes;
(B) reduce or otherwise adversely affect the
powers of the Property Trustee in
contravention of the Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered
under the Investment Company Act.
(c) This Declaration may also be amended by the Holders of
a Majority in Liquidation Amount of the Common Securities and the Regular
Trustees with (i) the consent of Holders representing not less than a Majority
in Liquidation Amount of the outstanding Capital Securities, and (ii) receipt by
the Regular Trustees of an opinion of counsel (who may be counsel to the Sponsor
or the Trust) to the effect that such amendment or the exercise of any power
granted to the Regular Trustees in accordance with such amendment will not
affect the Trust's status as a grantor trust for United States federal income
tax purposes or the Trust's exemption from status as an Investment Company,
provided, however, that without the consent of each Holder of Securities
affected thereby, the Declaration may not be amended to (i) change the amount or
timing of any distribution of the Securities or otherwise adversely affect the
amount of any distribution required to be made in respect of the Securities as
of a specified date or (ii) restrict the right of a Holder of Securities to
institute suit for the enforcement of any such payment on or after such date.
(d) Notwithstanding Section 11.1(c), this Declaration may
be amended by the Holders of a majority of the Common Securities and the Regular
Trustees, without the consent of the Holders of the Securities:
(i) to cure any ambiguity, correct or supplement any
provisions in this Declaration that may be
inconsistent with any other provision, or to make any
other provisions with respect to matters or questions
arising under this Declaration that shall not be
inconsistent with the other provisions of this
Declaration;
(ii) to modify, eliminate, or add to any provisions of
this Declaration to such extent as shall be necessary
to ensure that the Trust will be classified as a
grantor trust and will not be taxable as a corporation
for United States federal income tax purposes at all
times that any Securities are outstanding or to ensure
that the Trust will not be required to register as an
"investment company" under the Investment Company Act,
provided that such action does not adversely affect
the interests of Holders of the Capital Securities; or
(iii) to conform to any change in Rule 3a-7 under the
Investment Company Act or written change in
interpretation or application of such Rule 3a-7 by any
legislative body, court, government agency, or
regulatory authority which amendment does not have a
material adverse effect on the rights, preferences, or
privileges of the Holders.
provided, however, that such action shall not adversely affect in any material
respect the interests of any Holder of Capital Securities or Common Securities,
and any such amendments of this Declaration shall become effective when notice
thereof is given to the Holders of Capital Securities and Common Securities.
(e) Notwithstanding any provision of this Declaration, the
right of any Holder of Trust Securities to receive payment of Distributions and
other payments upon redemption or otherwise, on or after their respective due
dates, or to institute a suit for the enforcement of any such payment on or
after such respective dates, shall not be impaired or affected without the
consent of such Holder. For the protection and enforcement of the foregoing
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provision, each and every Holder of Trust Securities shall be entitled to such
relief as can be given either at law or equity.
Section 11.2 Meetings of the Holders of Securities; Action by
Written Consent.
(a) Meetings of the Holders of any class of Securities may
be called at any time by the Regular Trustees (or as provided in the terms of
the Securities) to consider and act on any matter on which Holders of such class
of Securities are entitled to act under the terms of this Declaration, the terms
of the Securities, or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Regular Trustees
shall call a meeting of the Holders of such class if directed to do so by the
Holders of at least 10% in Liquidation Amount of such class of Securities. Such
direction shall be given by delivering to the Regular Trustees one or more calls
in a writing stating that the signing Holders of Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of Securities calling a meeting shall specify in
writing the Certificates held by the Holders of Securities exercising the right
to call a meeting and only those Securities specified shall be counted for
purposes of determining whether the required percentage set forth in the second
sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of Holders
of Securities:
(i) Notice of any such meeting shall be given to all the
Holders of Securities having a right to vote thereat
at least 7 days and not more than 60 days before the
date of such meeting. Whenever a vote, consent, or
approval of the Holders of Securities is permitted or
required under this Declaration or the rules of any
stock exchange on which the Capital Securities are
listed or admitted for trading, if any, such vote,
consent, or approval may be given at a meeting of the
Holders of Securities. Any action that may be taken at
a meeting of the Holders of Securities may be taken
without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders of
Securities owning not less than the minimum amount of
Securities in liquidation amount that would be
necessary to authorize or take such action at a
meeting at which all Holders of Securities having a
right to vote thereon were present and voting. Prompt
notice of the taking of action without a meeting shall
be given to the Holders of Securities entitled to vote
who have not consented in writing. The Regular
Trustees may specify that any written ballot submitted
to the Security Holders for the purpose of taking any
action without a meeting shall be returned to the
Trust within the time specified by the Regular
Trustees.
(ii) Each Holder of a Security may authorize any Person
to act for it by proxy on all matters in which a
Holder of Securities is entitled to participate,
including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid
after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every
proxy shall be revocable at the pleasure of the Holder
of Securities executing such proxy. Except as
otherwise provided herein, all matters relating to the
giving, voting, or validity of proxies shall be
governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial
interpretations thereunder, as if the Trust were a
Delaware corporation and the Holders of the Securities
were stockholders of a Delaware corporation.
(iii) Each meeting of the Holders of the Securities shall
be conducted by the Regular Trustees or by such other
Person that the Regular Trustees may designate.
(iv) Consistent with the Business Trust Act, this
Declaration, the terms of the Securities, the Trust
Indenture Act, or the listing rules of any stock
exchange on which the Capital Securities are then
listed for trading, the Regular Trustees, in their
sole discretion, shall establish all other provisions
relating to meetings of Holders of Securities,
including notice of the time, place, or purpose of any
meeting at which any matter is to be voted on by any
Holders of Securities, waiver of any such notice,
action by consent without a meeting, the
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establishment of a record date, quorum requirements,
voting in person or by proxy, or any other matter with
respect to the exercise of any such right to vote.
Except as provided herein and in the Indenture and as otherwise required by law,
no Holder of Capital 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 Certificates be construed so as to
constitute the Holders from time to time as members of an association.
(c) So long as any Debentures are held by the Property
Trustee on behalf of the Trust, the Declaration Trustees shall not (i) direct
the time, method, and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or power conferred on
the Property Trustee with respect to such Debentures, (ii) waive any past
default that may be waivable under the Indenture, (ii) exercise any right to
rescind or annul any 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 of 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 the Capital Securities, provided,
however, that where a consent under the Indenture would require the consent of
each Holder of the Debentures affected thereby, no such consent shall be given
by the Property Trustee without the prior consent of each Holder of Capital
Securities. The Trustees shall not revoke any action previously authorized or
approved by a vote of the Holders of Capital Securities except pursuant to a
subsequent vote of Holders of Capital Securities. The Property Trustee shall
notify each Holder of record of Capital Securities of any written notice of
default which it receives with respect to the Debentures. In addition to
obtaining the foregoing approvals of the Holders of Capital Securities, prior to
taking any of the foregoing actions, the Declaration Trustees shall receive an
opinion of counsel experienced in such matters to the effect that the Trust will
not be classified as other than a grantor trust for United States federal income
tax purposes on account of such action.
(d) Notwithstanding anything to the contrary contained in
this Declaration, no vote or consent of the Holders of Capital Securities will
be required for the Trust to redeem and cancel the Capital Securities in
accordance with this Declaration.
(e) Notwithstanding that Holders of Capital Securities are
entitled to vote or consent under any of the circumstances described in this
Declaration, any Capital Securities that are owned by the Sponsor, the
Declaration Trustees, or any Affiliate of the Sponsor or any Declaration
Trustees, shall, for purposes of such vote or consent, be treated as if they
were not outstanding.
ARTICLE 12
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 12.1 Representations and Warranties of the Property
Trustee.
The Trustee that acts as initial Property Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Property Trustee that:
(a) the Property Trustee is a corporation or bank duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its obligations
under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set
forth in Section 6.3(a);
(c) the execution, delivery, and performance by the
Property Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Property Trustee; and this Declaration has
been duly executed and delivered by the Property Trustee, and it constitutes a
legal, valid, and binding obligation of the Property Trustee, enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
reorganization,
44
<PAGE> 51
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(d) the execution, delivery, and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the articles of association or incorporation, as the case may be, or
the by-laws (or other similar organizational documents) of the Property Trustee;
and
(e) no consent, approval, or authorization of, or
registration with or notice to, any State or federal banking authority is
required for the execution, delivery, or performance by the Property Trustee of
this Declaration.
Section 12.2 Representations and Warranties of the Delaware
Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements set
forth in Section 6.2 and has the power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this Declaration
and, if it is not a natural person, is duly organized, validly existing, and in
good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform
its obligations under the Certificate of Trust and this Declaration; and this
Declaration under Delaware law constitutes a legal, valid, and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law); and
(c) no consent, approval, or authorization of, or
registration with or notice to, any State or federal banking authority is
require for the execution, delivery, or performance by the Delaware Trustee of
this Declaration.
ARTICLE 13
MISCELLANEOUS
Section 13.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied, or mailed by registered or certified mail, as follows:
(a) if given to the Trust, in care of the Regular Trustees
at the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Property Trustee, the Delaware Trustee, and the
Holders of the Securities):
c/o Huntington Bancshares Incorporated
Huntington Center
41 South High Street
Columbus, Ohio 43287
(b) if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as the Delaware Trustee may give
notice of to the Regular Trustees, the Property Trustee, and the Holders of the
Securities):
45
<PAGE> 52
Chase Manhattan Bank Delaware
1201 Market Street, 9th Floor
Wilmington, DE 19801
(c) if given to the Property Trustee, at its Corporate
Trust Office (or such other address as the Property Trustee may give notice of
to the Regular Trustees, the Delaware Trustee, and the Holders of the
Securities).
(d) if given to the Sponsor, at the mailing address set
forth below (or such other address as the Sponsor may give notice of to the
Property Trustee, the Delaware Trustee, and the Trust):
Huntington Bancshares Incorporated
Huntington Center
41 South High Street
Columbus, Ohio 43287
Attn: Judith D. Fisher
(e) if given to any Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when received in person,
telecopied with receipt confirmed, or on the seventh day after being mailed by
first class mail, postage prepaid, except that if a notice or other document is
refused delivery or cannot be delivered because of a changed address of which no
notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
Section 13.2 Governing Law.
This Declaration and the rights of the parties hereunder shall
be governed by and interpreted in accordance with the laws of the State of
Delaware without regard to the principles of conflict of laws.
Section 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted in a manner consistent with
such classification.
Section 13.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
Section 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is named
or referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Declaration by the Sponsor
and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
46
<PAGE> 53
Section 13.7 Counterparts.
This Declaration may contain more than one counterpart of the
signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees to one of such counterpart signature pages.
All of such counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers had signed a
single signature page.
Section 13.8 Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Declaration or in any suit against any Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorney's fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 13.8 does not apply to a suit by a Trustee, a
suit by a Holder to enforce its right to payment, or a suit by Holders of more
than 10% in Liquidation Amount of the then outstanding Securities.
47
<PAGE> 54
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
HUNTINGTON BANCSHARES INCORPORATED,
as Sponsor and Common Securities Holder
By:
--------------------------------------
Name: Judith D. Fisher
Title: Executive Vice President
THE CHASE MANHATTAN BANK,
as Property Trustee
By:
--------------------------------------
Name:
Title:
CHASE MANHATTAN BANK DELAWARE,
as Delaware Trustee
By:
--------------------------------------
Name:
Title:
----------------------------------------
Milton D. Baughman, as Regular Trustee
----------------------------------------
Beth A. Russell, as Regular Trustee
----------------------------------------
Paul V. Sebert, as Regular Trustee
<PAGE> 1
Exhibit 4(m)
EXHIBIT A-1
This Capital Security is a Global Certificate within the meaning of the
Declaration hereinafter referred to and is registered in the name of The
Depository Trust Company, a New York corporation (the "Depositary"), or a
nominee of the Depositary. This Capital Security is exchangeable for Capital
Securities registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Declaration and no
transfer of this Capital Security (other than a transfer of this Capital
Security as a whole by the Depositary to a nominee of the Depositary or by a
nominee of the Depositary to the Depositary or another nominee of the
Depositary) may be registered except in limited circumstances.
Unless this Capital Security Certificate is presented by an authorized
representative of the Depositary to Huntington Capital ___ or its agent for
registration of transfer, exchange, or payment, and any Capital Security
Certificate issued is registered in the name of Cede & Co. or such other name as
registered by an authorized representative of the Depositary (and any payment
hereon is made to Cede & Co. or to such other entity as is requested by an
authorized representative of the Depositary), ANY TRANSFER, PLEDGE, OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the
registered owner hereof, Cede & Co., has an interest herein.
CERTIFICATE NO. CUSIP NO.
AGGREGATE LIQUIDATION AMOUNT OF CAPITAL SECURITIES: $[__],000,000
CERTIFICATE EVIDENCING CAPITAL SECURITIES
OF
HUNTINGTON CAPITAL ___
_________ CAPITAL SECURITIES
(LIQUIDATION AMOUNT $______ PER CAPITAL SECURITY)
HUNTINGTON CAPITAL ___, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that
_________________ (the "Holder") is the registered owner of capital securities
in the aggregate liquidation amount of $[__],000,000 of the Trust representing
undivided beneficial interests in the assets of the Trust designated the ______
Capital Securities (liquidation amount $______ per Capital Security) (the
"Capital Securities"). The Capital Securities are transferable on the books and
records of the Trust, in person or by a duly authorized attorney, upon surrender
of this certificate duly endorsed and in proper form for transfer as provided in
the Declaration (as defined below). The designation, rights, privileges,
restrictions, preferences, and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of __________, 19__ (as the same may be amended from time to time (the
"Declaration"), among Huntington Bancshares Incorporated, as Sponsor (the
"Company"), Milton D. Baughman, Beth A. Russell, and Paul V. Sebert, as Regular
Trustees, The Chase Manhattan Bank, as Property Trustee, and Chase Manhattan
Bank Delaware, as Delaware Trustee, and the holders, from time to time, of
undivided beneficial ownership interests in the assets of the Trust. Capitalized
terms used herein but not defined shall have the meaning given them in the
Declaration. The Holder is entitled to the benefits of the Guarantee to the
extent described therein. The Sponsor will provide a copy of the Declaration,
the Guarantee, and the
<PAGE> 2
Indenture to a Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of undivided indirect beneficial interests in the Debentures.
This Capital Security shall be governed by and interpreted in
accordance with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Trust has executed this certificate this ___
day of ____________, 19__.
HUNTINGTON CAPITAL
By:
----------------------------
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Declaration.
THE CHASE MANHATTAN BANK
By:
----------------------------
Authorized Signatory
<PAGE> 3
EXHIBIT A-2
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NO. NUMBER OF COMMON SECURITIES:
CERTIFICATE EVIDENCING COMMON SECURITIES
OF
HUNTINGTON CAPITAL ___
________ COMMON SECURITIES
(LIQUIDATION AMOUNT $______ PER COMMON SECURITY)
Huntington Capital ___, a statutory business trust created under the
laws of the State of Delaware (the "Trust"), hereby certifies that Huntington
Bancshares Incorporated (the "Holder") is the registered owner of common
securities of the Trust representing an undivided beneficial interest in the
assets of the Trust designated the _________ Common Securities (liquidation
amount $______ per Common Security) (the "Common Securities"). The Common
Securities are not transferable (except by operation of law) and any attempted
transfer thereof (except by operation of law) shall be void. The designation,
rights, privileges, restrictions, preferences, and other terms and provisions of
the Common Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
the Trust, dated as of ______________, 19__ (as the same may be amended from
time to time, the "Declaration"), among Huntington Bancshares Incorporated, as
Sponsor, Milton D. Baughman, Beth A. Russell, and Paul V. Sebert, as Regular
Trustees, The Chase Manhattan Bank, as Property Trustee, and Chase Manhattan
Bank Delaware, as Delaware Trustee, and the holders, from time to time, of
undivided beneficial ownership interests in the assets of the Trust. The Holder
is entitled to the benefits of the Guarantee to the extent described therein.
Capitalized terms used herein but not defined shall have the meaning given them
in the Declaration. The Sponsor will provide a copy of the Declaration, the
Guarantee, and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of an undivided indirect beneficial interest in the Debentures.
A-2-1
<PAGE> 4
This Common Security shall be governed by and interpreted in accordance
with the laws of the State of Delaware.
IN WITNESS WHEREOF, the Trust has executed this certificate this ____
day of _____________, 19__.
HUNTINGTON CAPITAL
By:
----------------------------
Name:
Title:
A-2-2
<PAGE> 1
Exhibit 4(n)
- --------------------------------------------------------------------------------
FORM OF
GUARANTEE AGREEMENT
HUNTINGTON CAPITAL ___
DATED AS OF ______________, 19__
- --------------------------------------------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE*
----------------------
Section of Trust Indenture Section of
Act of 1939, as amended Guarantee Agreement
310(a) 4.1(a)
310(b) 2.8, 4.1(c)
310(c) Inapplicable
311(a) 2.2(b)
311(b) 2.2(b)
311(c) Inapplicable
312(a) 2.2(a)
312(b) 2.2(b)
313 2.3
314(a) 2.4
314(b) Inapplicable
314(c) 2.5
314(d) Inapplicable
314(e) 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, 2.6, 5.4
316(b) 5.3
316(c) 8.2
317(a) Inapplicable
317(b) Inapplicable
318(a) 2.1
318(b) 2.1
318(c) 2.1
* This Cross-Reference Table does not constitute part of the Guarantee Agreement
and shall not affect the interpretation of any of its terms or provisions.
<PAGE> 3
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions................................ 1
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............................. 3
SECTION 2.2 Lists of Holders of Securities................................ 4
SECTION 2.3 Reports by Guarantee Trustee.................................. 4
SECTION 2.4 Periodic Reports to Guarantee Trustee......................... 4
SECTION 2.5 Evidence of Compliance with Conditions Precedent.............. 4
SECTION 2.6 Guarantee Event of Default; Waiver............................ 4
SECTION 2.7 Guarantee Event of Default; Notice............................ 4
SECTION 2.8 Conflicting Interests......................................... 5
SECTION 2.9 Disclosure of Information..................................... 5
SECTION 2.10 Guarantee Trustee May File Proofs of Claim................... 5
ARTICLE 3
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee........................ 5
SECTION 3.2 Certain Rights of Guarantee Trustee........................... 6
SECTION 3.3 Not Responsible for Recitals or Issuance of Guarantee......... 7
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility................................ 8
SECTION 4.2 Appointment, Removal, and Resignation of Guarantee Trustee.... 8
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee..................................................... 9
SECTION 5.2 Waiver of Notice and Demand................................... 9
SECTION 5.3 Obligations Not Affected...................................... 9
SECTION 5.4 Rights of Holders............................................. 10
SECTION 5.5 Guarantee of Payment.......................................... 10
SECTION 5.6 Subrogation................................................... 11
SECTION 5.7 Independent Obligations....................................... 11
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.................................... 11
SECTION 6.2 Ranking....................................................... 11
-i-
<PAGE> 4
Page
----
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.................................................... 12
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 Exculpation................................................... 12
SECTION 8.2 Indemnification............................................... 12
SECTION 8.3 Compensation.................................................. 13
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................................ 13
SECTION 9.2 Amendments.................................................... 13
SECTION 9.3 Notices....................................................... 13
SECTION 9.4 Benefit....................................................... 14
SECTION 9.5 Governing Law................................................. 14
-ii-
<PAGE> 5
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of
______________,19__, is executed and delivered by Huntington Bancshares
Incorporated, a Maryland corporation (the "Guarantor"), and The Chase Manhattan
Bank, a New York banking corporation, as trustee (the "Guarantee Trustee"), for
the benefit of the Holders (as defined below) of the Securities (as defined
below) of Huntington Capital ___, a Delaware statutory business trust (the
"Trust").
RECITALS
A. Pursuant to the Declaration (as defined below), the Trust
is issuing on the date hereof, and may in the future issue additional, capital
securities, having a liquidation amount of $____ per capital security,
designated the __________ Capital Securities (the "Capital Securities") and
common securities, having a liquidation amount of $______ per common security,
designated the __________ Common Securities (the "Common Securities"; together
with the Capital Securities, the "Securities");
B. As incentive for the Holders to purchase the Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth in this Guarantee, to pay to the Holders of the Securities the
Guarantee Payments (as defined below) and to make certain other payments on the
terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the purchase by each
Holder of Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Guarantee for the
benefit of the Holders.
ARTICLE 1
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this Guarantee,
unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented, or amended from time to
time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee, unless otherwise defined in this
Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa and a reference to the masculine includes, as applicable, the
feminine.
"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.
<PAGE> 6
"Business Day" has the meaning given to such term in the
Indenture.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall at
any particular time, be principally administered, which office at the date of
execution of this Guarantee is located at The Chase Manhattan Bank, 450 West
33rd Street, New York, New York 10001, Attention: Global Trust Services.
"Covered Person" means any Holder or beneficial owner of the
Securities.
"Debentures" means the series of junior subordinated
debentures to be issued by the Guarantor, designated the _____ Junior
Subordinated Debentures due _____ held by the Property Trustee (as defined in
the Declaration) of the Trust.
"Declaration" means the Amended and Restated Declaration of
Trust, dated as of __________, 19___, as amended, modified, or supplemented from
time to time, among the trustees of the Trust named therein, the Guarantor, as
sponsor, and the holders from time to time of undivided beneficial ownership
interests in the assets of the Trust.
"Guarantee Event of Default" means (i) a default by the
Guarantor in any of its payment obligations under this Guarantee, or (ii) a
default by the Guarantor in any other obligation hereunder that remains
unremedied for 30 days.
"Guarantee Trustee" means The Chase Manhattan Bank, until a
successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Securities, to the
extent not paid or made by the Trust: (i) any accumulated and unpaid
Distributions (as defined in the Declaration) that are required to be paid on
such Securities to the extent the Trust shall have sufficient funds available
therefor at the time, (ii) the redemption price, including all accrued and
unpaid Distributions to the date of redemption with respect to any Securities
called for redemption by the Trust, to the extent the Trust shall have
sufficient funds available therefor at the time, and (iii) upon a voluntary or
involuntary dissolution, winding-up, or liquidation of the Trust (other than in
connection with the distribution of Debentures to the Holders in exchange for
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accrued and unpaid Distributions on the
Securities to the date of payment, and (b) the amount of assets of the Trust
remaining available for distribution to Holders after satisfaction of
liabilities to creditors of such Trust as required by applicable law in
liquidation of the Trust (in either case, the "Liquidation Distribution"). If a
Trust Enforcement Event (as defined in the Declaration) has occurred and is
continuing, the rights of holders of the Common Securities to receive Guarantee
Payments under this Guarantee are subordinated to the rights of Holders of the
Capital Securities to receive payments hereunder.
"Holder" shall mean any holder of Securities, as registered on
the books and records of the Trust; provided, however, that, in determining
whether the Holders of the requisite percentage of Capital Securities have given
any request, notice, consent, or waiver hereunder, "Holder" shall not include
the Guarantor or any Affiliate of the Guarantor or any other obligor on the
Capital Securities; and provided further, that in determining whether the
Holders of the requisite liquidation amount of Capital Securities have voted on
any matter provided for in this Guarantee, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Capital
Securities remain in the form of one or more Global Certificates (as defined in
the Declaration), the term "Holders" shall mean the holder of the Global
Certificate acting at the direction of the beneficial holders of the Securities.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, and any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians, or agents
of the Guarantee Trustee.
-2-
<PAGE> 7
"Indenture" means the Indenture, dated as of _____________,
1998, among the Guarantor (the "Company") and The Chase Manhattan Bank, as
trustee, and any indenture supplemental thereto pursuant to which the Debentures
are to be issued to the Property Trustee (as defined in the Declaration) of the
Trust.
"Majority in Liquidation Amount of the Securities" means,
except as provided in the terms of the Securities or by the Trust Indenture Act,
Holder(s) of outstanding Securities, voting separately as a class, who are the
record holders of more than 50% of the aggregate liquidation amount (including
the stated amount that would be paid on redemption, liquidation, or otherwise,
plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all outstanding Securities. In determining
whether the Holders of the requisite amount of Securities have voted, Securities
which are owned by the Guarantor or any Affiliate of the Guarantor shall be
disregarded for the purpose of any such determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Declaration) of such Person. Any Officers' Certificate delivered
with respect to compliance with a condition or covenant provided for in this
Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer on behalf of such Person to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and
(c) a statement as to whether, in the opinion of each such
officer acting on behalf of such Person, such condition or covenant has
been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer", when used with respect to the Guarantee
Trustee, means any officer within the Corporate Trust Office, including any Vice
President, Assistant Vice President, the Secretary, any Assistant Secretary, or
any other officer of the Guarantee Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
ARTICLE 2
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application. (a) This
Guarantee is subject to the provisions of the Trust Indenture Act that are
required to be part of this Guarantee and shall, to the extent applicable, be
governed by such provisions.
-3-
<PAGE> 8
(b) If and to the extent that any provision of this Guarantee
limits, qualifies, or conflicts with the duties imposed by Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
SECTION 2.2 Lists of Holders of Securities. (a) The Guarantor
shall provide the Guarantee Trustee with a list, in such form as the Guarantee
Trustee may reasonably require, of the names and addresses of the Holders of the
Securities ("List of Holders"), (i) not later than June 30 and December 31 of
each year and current as of such date, and (ii) at such other times as the
Guarantee Trustee may request in writing, within 30 days of receipt by the
Guarantor of a written request from the Guarantee Trustee for a List of Holders
as of a date no more than 15 days before such List of Holders is given to the
Guarantee Trustee; excluding from any such list names and addresses received by
the Guarantee Trustee in its capacity as Security Registrar (as defined in the
Indenture). The Guarantee Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it, provided that it may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with its obligations
under Sections 311(a), 311(b), and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by Guarantee Trustee. Within 60 days after
May 15 of each year (commencing with the year of the first anniversary of the
issuance of the Securities), the Guarantee Trustee shall provide to the Holders
of the Securities such reports as are required by Section 313 of the Trust
Indenture Act (if any) in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Guarantee Trustee. The
Guarantor shall provide to the Guarantee Trustee such documents, reports, and
information as required by Section 314 (if any) of the Trust Indenture Act and
the compliance certificate required by Section 314 of the Trust Indenture Act in
the form, in the manner, and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent.
The Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this 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) shall be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Event of Default; Waiver. The Holders of
a Majority in Liquidation Amount of the Securities may, by vote or written
consent, on behalf of the Holders of all of the Securities, waive any past
Guarantee Event of Default and its consequences. Upon such waiver, any such
Guarantee Event of Default shall cease to exist, and any Guarantee Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Guarantee, but no such waiver shall extend to any subsequent or other
default or Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice. (a) The
Guarantee Trustee shall, within 90 days after the occurrence of a Guarantee
Event of Default, transmit by mail, first class postage prepaid, to the Holders
of the Securities, notices of all Guarantee Events of Default actually known to
a Responsible Officer of the Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided, that the Guarantee Trustee
shall be protected in withholding such notice if and so long as a Responsible
Officer of the Guarantee Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of the Securities.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Guarantee Event of Default unless the Guarantee Trustee shall
have received written notice thereof or a Responsible Officer of the Guarantee
Trustee charged with the administration of the Declaration shall have obtained
actual knowledge thereof.
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SECTION 2.8 Conflicting Interests. The Declaration shall be
deemed to be specifically described in this Guarantee for the purposes of clause
(i) of the first provision contained in Section 310(b) of the Trust Indenture
Act.
SECTION 2.9 Disclosure of Information. The disclosure of
information as to the names and addresses of the Holders of the Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall not be deemed to be a violation
of any existing law, or any law hereafter enacted which does not specifically
refer to Section 312 of the Trust Indenture Act, nor shall the Guarantee Trustee
be held accountable by reason of mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
SECTION 2.10 Guarantee Trustee May File Proofs of Claim. Upon
the occurrence of a Guarantee Event of Default, the Guarantee Trustee is hereby
authorized to (a) recover judgment, in its own name and as trustee of an express
trust, against the Guarantor for the whole amount of any Guarantee Payments
remaining unpaid, and (b) file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have its claims and those
of the Holders of the Securities allowed in any judicial proceedings relative to
the Guarantor, its creditors, or its property.
ARTICLE 3
POWERS, DUTIES, AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Guarantee Trustee.
(a) This Guarantee shall be held by the Guarantee Trustee on
behalf of the Trust for the benefit of the Holders of the Securities, and the
Guarantee Trustee shall not transfer this Guarantee to any Person except a
Holder of Securities exercising his or her rights pursuant to Section 5.4(b) or
to a Successor Guarantee Trustee on acceptance by such Successor Guarantee
Trustee. The right, title, and interest of the Guarantee Trustee in and to this
Guarantee shall automatically vest in any Successor Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the Holders of
the Securities.
(c) The Guarantee Trustee, before the occurrence of any
Guarantee Event of Default and after the curing of all Guarantee Events of
Default that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Guarantee, and no implied covenants shall be
read into this Guarantee against the Guarantee Trustee. In case a Guarantee
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 Guarantee
Trustee, the Guarantee Trustee shall exercise such of the rights and powers
vested in it by this Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of any Guarantee
Event of Default and after the curing or waiving of all such
Guarantee Events of Default that may have occurred:
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(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by the
express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee, and no
implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of
any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Guarantee;
(ii) the Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer of the Guarantee Trustee, unless it shall be proved
that the Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Guarantee Trustee shall not be liable
with respect to any action taken or omitted to be taken by it
in good faith in accordance with the direction of the Holders
of not less than a Majority in Liquidation Amount of the
Securities relating to the time, method, and place of
conducting any proceeding for any remedy available to the
Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee; and
(iv) no provision of this Guarantee shall require
the Guarantee Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if the 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 Guarantee or indemnity, reasonably satisfactory
to the Guarantee Trustee, against such risk or liability is
not reasonably assured to it.
SECTION 3.2 Certain Rights of Guarantee Trustee. (a) Subject
to the provisions of Section 3.1, the following provisions shall apply.
(i) The Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from
acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness, or other paper or document believed by it to be
genuine and to have been signed, sent, or presented by the
proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee shall be sufficiently evidenced
by an Officers' Certificate.
(iii) Whenever, in the administration of this
Guarantee, the Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering, or
omitting any action hereunder, the Guarantee Trustee may, in
the absence of bad faith on its part, request and conclusively
rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee shall have no duty to
see to any recording, filing, or registration or any
instrument (or any rerecording, refiling, or registration
thereof).
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(v) The Guarantee Trustee may consult with
counsel, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered, or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the
expenses of the 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 Guarantee
Trustee; provided, that nothing contained in this Section
3.2(a)(vi) shall be taken to relieve the Guarantee Trustee,
upon the occurrence of a Guarantee Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Guarantee.
(vii) The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness, or other
paper or document, but the Guarantee Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians,
or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or
its agents hereunder shall bind the Holders of the Securities,
and the signature of the 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 Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this
Guarantee, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this
Guarantee the Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in Liquidation Amount of the 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 Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty, or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty, or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of
Guarantee. The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
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responsibility for their correctness. The Guarantee Trustee makes no
representations as to the validity or sufficiency of this Guarantee.
ARTICLE 4
GUARANTEE TRUSTEE
SECTION 4.1 Guarantee Trustee; Eligibility.
(a) There shall be at all times a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Exchange
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject
to supervision or examination by Federal, State, Territorial,
or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining
authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Guarantee Trustee shall promptly
resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal, and Resignation of Guarantee
Trustee.
(a) No resignation or removal of the Guarantee Trustee and no
appointment of a Successor Guarantee Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the Successor Guarantee
Trustee by written instrument executed by the Successor Guarantee Trustee and
delivered to the Holders, the Guarantor, and the Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a
Guarantee Trustee may resign at any time by giving written notice thereof to the
Holders and the Guarantor. If the instrument of acceptance by the Successor
Guarantee Trustee shall not have been delivered to the Guarantee Trustee within
30 days after the giving of such notice of resignation, the Guarantee Trustee
may petition, at the expense of the Guarantor, any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee.
(c) The Guarantee Trustee may be removed for cause at any time
by Act (within the meaning of Section 104 of the Indenture) of the Holders of at
least a Majority in Liquidation Amount of the Securities, delivered to the
Guarantee Trustee.
(d) If a Guarantee Trustee shall be removed or become
incapable of acting as Guarantee Trustee, or if any vacancy shall occur in the
office of any Guarantee Trustee for any cause, the Holders of the Capital
Securities, by Act of the Holders of record of not less than 25% in aggregate
Liquidation Amount of the Capital
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Securities then outstanding delivered to such Guarantee Trustee, shall promptly
appoint a Successor Guarantee Trustee. If no Successor Guarantee Trustee shall
have been so appointed by the Holders of the Capital Securities and such
appointment accepted by the Successor Guarantee Trustee, any Holder, on behalf
of himself and all other similarly situated, may petition any court of competent
jurisdiction for the appointment of a Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Guarantee Trustee all amounts owing for fees and reimbursement
of expenses which have accrued to the date of such termination, removal, or
resignation.
(g) The Guarantor shall promptly notify the Holders of the
resignation, removal, or appointment of the Guarantee Trustee.
ARTICLE 5
GUARANTEE
SECTION 5.1 Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Trust), as and when due, regardless of any defense,
right of set-off, or counterclaim that the Trust may have or assert other than
the defense of payment. The Guarantor's obligation to make a Guarantee Payment
may be satisfied by direct payment of the required amounts by the Guarantor to
the Holders or by causing the Trust to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand.
The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the 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. Notwithstanding anything to the contrary herein, the Guarantor retains
all of its rights under the Indenture to (i) extend the interest payment period
on the Debentures and the Guarantor shall not be obligated hereunder to make any
Guarantee Payments during any Extended Interest Payment Period (as defined in
the Indenture) with respect to the Distributions (as defined in the Declaration)
on the Securities, and (ii) change the maturity date of the Debentures to the
extent permitted by the Indenture.
SECTION 5.3 Obligations Not Affected.
The obligations, covenants, agreements, and duties of the
Guarantor under this Guarantee shall be absolute and unconditional and shall
remain in full force and effect until the entire liquidation amount of all
outstanding Securities shall have been paid and such obligation shall in no way
be affected or impaired by reason of the happening from time to time of any
event, including without limitation, the following, whether or not with notice
to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise,
of the performance or observance by the Trust of any express or implied
agreement, covenant, term, or condition relating to the Securities to
be performed or observed by the Trust;
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(b) The extension of time for the payment by the Trust of all
or any portion of the Distributions, Redemption Price (as defined in
the Indenture), Liquidation Distribution, or any other sums payable
under the terms of the Securities or the extension of time for the
performance of any other obligation under, arising out of, or in
connection with the 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 change to the maturity date of
the Debentures permitted by the Indenture);
(c) Any failure, omission, delay, or lack of diligence on the
part of the Property Trustee or the Holders to enforce, assert, or
exercise any right, privilege, power, or remedy conferred on the
Property Trustee or the Holders pursuant to the terms of the
Securities, or any action on the part of the 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, the Trust or any of the assets of the Trust;
(e) Any invalidity of, or defect or deficiency in, the
Securities;
(f) The settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Guarantee Trustee or the
Holders to give notice to, or obtain consent of the Guarantor or any other
Person with respect to the happening of any of the foregoing.
No setoff, counterclaim, reduction, or diminution of any
obligation, or any defense of any kind or nature that the Guarantor has or may
have against any Holder shall be available hereunder to the Guarantor against
such Holder to reduce the payments to it under this Guarantee.
SECTION 5.4 Rights of Holders.
(a) The Holders of a Majority in Liquidation Amount of the
Securities have the right to direct the time, method, and place of conducting
any proceeding for any remedy available to the Guarantee Trustee in respect of
this Guarantee or exercising any trust or power conferred upon the Guarantee
Trustee under this Guarantee.
(b) Any Holder of Securities may, subject to the subordination
provisions of Section 6.2, institute a legal proceeding directly against the
Guarantor to enforce the Guarantee Trustee's rights under this Guarantee without
first instituting a legal proceeding against the Trust, the Guarantee Trustee,
or any other person or entity. Notwithstanding the foregoing, if the Guarantor
has failed to make a Guarantee Payment, a Holder of Securities may, subject to
the subordination provisions of Section 6.2, directly institute a proceeding
against the Guarantor for enforcement of the Guarantee for such payment to the
Holder of the Securities of the principal of or interest on the Debentures on or
after the respective due dates specified in the Debentures, and the amount of
the payment will be based on the Holder's pro rata share of the amount due and
owing on all of the Securities. The Guarantor hereby waives any right or remedy
to require that any action on this Guarantee be brought first against the Trust
or any other person or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
This Guarantee creates a guarantee of payment and not of
collection.
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SECTION 5.6 Subrogation.
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Securities against the Trust in respect of any amounts paid to
such Holders by the Guarantor under this 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 of any indemnity, reimbursement, or other agreement, in all cases as
a result of payment under this Guarantee, if at the time of any such payment,
any amounts are due and unpaid under this Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Guarantee Trustee for the benefit of the Holders.
SECTION 5.7 Independent Obligations.
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Trust with respect to the Securities, and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee notwithstanding the
occurrence of any event referred to in subsections 5.3(a) through 5.3(g),
inclusive, hereof.
ARTICLE 6
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
So long as any Securities remain outstanding, if there shall
have occurred a Guarantee Event of Default or a Trust Enforcement Event, then
the Guarantor shall not, and shall not permit any subsidiary of the Guarantor,
to (i) declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, the Guarantor'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 Guarantor that rank pari
passu with or junior to the Debentures or make any guarantee payments with
respect to any guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor if such guarantee ranks pari passu with or junior to
the Debentures (other than (a) repurchases, redemptions, or other acquisitions
of shares of capital stock of the Guarantor in connection with any employment
contract, benefit plan, or other similar arrangement with or for the benefit of
any one or more employees, officers, directors, or consultants or in connection
with a dividend reinvestment or stockholder stock purchase plan, (b) as a result
of an exchange or conversion of any class or series of the Guarantor's capital
stock (or any capital stock of a subsidiary of the Guarantor) for any other
class or series of the Guarantor's capital stock or of any class of series of
the Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (c) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock, or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (e) any dividend in the
form of stock, warrants, options, or other rights where the dividend stock or
the stock issuable upon exercise of such warrants, options, or other rights is
the same stock as that on which the dividend is being paid (or pari passu with
or junior to such stock).
SECTION 6.2 Ranking.
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Indebtedness (as defined in the Indenture) of the Guarantor to the extent set
forth in the Indenture with respect to the Debentures, and will be pari passu
with any similar guarantee agreements issued by the Guarantor on behalf of the
holders of capital securities issued by any trust for which the Company is the
Sponsor, including the guarantee issued by the Guarantor in connection with the
Floating Rate Capital Securities
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<PAGE> 16
issued by Huntington Capital I, to the same extent as the Debentures. The
obligations of the Guarantor hereunder do not constitute Senior Indebtedness of
the Guarantor.
If a Trust Enforcement Event has occurred and is continuing
under the Declaration, the rights of the holders of the Common Securities to
receive Guarantee Payments hereunder shall be subordinated to the rights of the
holders of the Capital Securities to receive payment of all amounts due and
owing hereunder.
ARTICLE 7
TERMINATION
SECTION 7.1 Termination.
This Guarantee shall terminate upon (i) full payment of the
Redemption Price (as defined in the Indenture) of all Securities, (ii) upon the
distribution of the Debentures to the Holders of all the Securities, or (iii)
upon full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Trust. Notwithstanding the foregoing, this Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any Holder of Securities must restore payment of any sums paid under the
Securities or under this Guarantee.
ARTICLE 8
INDEMNIFICATION
SECTION 8.1 Exculpation.
(a) No Indemnified Person shall be liable, responsible, or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage, or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith in accordance with this
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Guarantee or by law, except that an Indemnified Person shall be liable for any
such loss, damage, or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Guarantor and upon such information,
opinions, reports, or statements presented to the Guarantor by any Person as to
any matter the Indemnified Person reasonably believes is 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 Securities might
properly be paid.
SECTION 8.2 Indemnification.
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against any loss, liability, or
expense incurred without gross 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 and fees and expenses of its agents) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its
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powers or duties hereunder. The obligation to indemnify as set forth in this
Section 8.2 shall survive the termination of this Guarantee.
SECTION 8.3 Compensation.
The Guarantor agrees to pay to the Guarantee Trustee from time
to time reasonable compensation, as mutually agreed to by the Guarantor and the
Guarantee Trustee, for all services rendered by it hereunder (which compensation
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust).
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees, and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Securities
then outstanding. Except in connection with any merger or consolidation of the
Guarantor with or into another entity or any sale, transfer, or lease of the
Guarantor's assets to another entity, in each case, to the extent permitted
under the Indenture, the Guarantor may not assign its rights or delegate its
obligations under this Guarantee.
SECTION 9.2 Amendments.
Except with respect to any changes that do not materially
adversely affect the rights of the Holders (in which case no consent of the
Holders will be required), this Guarantee may only be amended with the prior
approval of the Holders of at least a Majority in Liquidation Amount of the
Securities. The provisions of Section 11.2 of the Declaration with respect to
meetings of, and action by written consent of the Holders of the Securities
apply to the giving of such approval.
SECTION 9.3 Notices.
All notices provided for in this 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 Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Guarantor and the Holders
of the Securities):
The Chase Manhattan Bank
450 West 33rd Street
New York, New York 10001
Attention: Global Trust Services
Fax: 212-946-8154
(b) If given to the Guarantor, at the Guarantor's mailing
addresses set forth below (or such other address as the Guarantor may
give notice of to the Guarantee Trustee and the Holders of the
Securities):
-13-
<PAGE> 18
Huntington Bancshares Incorporated
Huntington Center
41 South High Street
Columbus, Ohio 43287
Attn: Judith D. Fisher
Fax: (614) 480-5474
(c) If given to any Holder of Securities, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid, except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit.
This Guarantee is solely for the benefit of the Holders of the
Securities and, subject to Section 3.1(a), is not separately transferable from
the Securities.
SECTION 9.5 Governing Law.
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, this Guarantee is executed as of the day
and year first above written.
HUNTINGTON BANCSHARES INCORPORATED
as Guarantor
By:
--------------------------------------
Name:
------------------------------
Title:
-----------------------------
THE CHASE MANHATTAN BANK
as Guarantee Trustee
By:
--------------------------------------
Name:
------------------------------
Title:
-----------------------------
-14-
<PAGE> 1
Exhibit 5(a)
June 4, 1998
Huntington Bancshares Incorporated
41 South High Street
Columbus, Ohio 43287
The Chase Manhattan Bank
450 West 33rd Street
New York, NY 10001
Attention: Global Trust Services
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933,
as amended (the "Act") on a Form S-3 Registration Statement (the "Registration
Statement") of $250,000,000 aggregate principal amount of Junior Subordinated
Debentures (the "Subordinated Debentures") of Huntington Bancshares
Incorporated, a Maryland corporation (the "Company"), $250,000,000 aggregate
liquidation amount of Capital Securities (the "Capital Securities") of
Huntington Capital II, Huntington Capital III, Huntington Capital IV, Huntington
Capital V, and Huntington Capital VI, each of which is a business trust created
under the laws of the State of Delaware (each, a "Trust"), and the Guarantees
with respect to the Capital Securities (the "Guarantees") to be executed and
delivered by the Company for the benefit of the holders from time to time of the
Capital Securities, we, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, when:
(i) The Registration Statement relating to the Subordinated
Debentures, the Capital Securities and the Guarantees has become
effective under the Act;
(ii) the Indenture relating to the Subordinated Debentures has
been duly executed and delivered;
(iii) the Guarantee Agreement relating to the Guarantees with
respect to the Capital Securities of a Trust has been duly executed and
delivered;
(iv) the Amended and Restated Trust Agreement of such Trust
has been duly executed and delivered;
(v) the terms of the Subordinated Debentures and of their
issuance and sale have been duly established in conformity with the
Indenture so as not to violate any applicable law or result in a
default under, or breach of, any agreement or instrument binding upon
the
<PAGE> 2
Huntington Bancshares Incorporated
June 4, 1998
Page 2
Company and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over the Company;
(vi) the terms of the Capital Securities of such Trust and of
their issuance and sale have been duly established in conformity with
the Amended and Restated Declaration of Trust of such Trust so as not
to violate any applicable law or result in a default under, or breach
of, any agreement or instrument binding upon such Trust and so as to
comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over such Trust;
(vii) the Subordinated Debentures have been duly executed and
authenticated in accordance with the Indenture and issued and delivered
as contemplated in the Registration Statement; and
(viii) the Capital Securities have been duly executed in
accordance with the Amended and Restated Declaration of Trust of such
Trust and issued and delivered as contemplated in the Registration
Statement,
the Subordinated Debentures and the Guarantees relating to the Capital
Securities of such Trust will constitute valid and legally binding obligations
of the Company, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium, and similar laws of general applicability relating
to or affecting creditors' rights, to general equity principles, and to an
implied covenant of good faith and fair dealing.
The foregoing opinion is limited to the laws of the State of Maryland,
and where applicable, the Federal laws of the United States. The Subordinated
Debentures and the Guarantees provide that they shall be governed by the laws of
the State of New York. For purposes of our opinion, we have not examined the
laws of the State of New York or the question of what law would govern the
interpretation or enforcement of the Subordinated Debentures or the Guarantees.
Our opinion therefore is based on and qualified by the assumption that the
internal laws of the State of New York and the State of Maryland are in all
relevant respects identical. We are expressing no opinion as to the effect of
the laws of any other jurisdiction.
We understand that you have received opinions regarding the Capital
Securities from Richards, Layton & Finger, P.A., special Delaware counsel for
the Company and each Trust. We are expressing no opinion with respect to the
matters contained in such opinions.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Company and other sources believed by us to be
responsible.
<PAGE> 3
Huntington Bancshares Incorporated
June 4, 1998
Page 3
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Securities" in the Prospectus and Prospectus Supplement. In giving such
consent, we do not thereby admit that we are in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
/s/ Porter, Wright, Morris & Arthur
PORTER, WRIGHT, MORRIS & ARTHUR
<PAGE> 1
Exhibit 5(b)
[Letterhead of Richards, Layton & Finger, P.A.]
June 4, 1998
Huntington Capital II
c/o Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
RE: HUNTINGTON CAPITAL II
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), and Huntington
Capital II, 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 as of May 21,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on May 21, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 21,
1998, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus and prospectus supplement
(jointly, the "Prospectus"), relating to the Capital Securities, Series B of the
Trust representing preferred undivided beneficial interests in the assets of the
Trust (each, a "Capital Security" and collectively, the "Capital Securities"),
as proposed to be filed by the Company, the Trust and others as set forth
therein with the Securities and Exchange Commission on or about June 4, 1998;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among the Company, as sponsor, the trustees of the
Trust named therein, and the
<PAGE> 2
Huntington Capital II
June 4, 1998
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated June
4, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
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 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 Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
Huntington Capital II
June 4, 1998
Page 3
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 that 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 Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. 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, P.A.
BJK/BJ
<PAGE> 1
Exhibit 5(c)
[Letterhead of Richards, Layton & Finger, P.A.]
June 4, 1998
Huntington Capital III
c/o Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
RE: HUNTINGTON CAPITAL III
----------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), and Huntington
Capital III, 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 as of May 21,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on May 21, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 21,
1998, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the Capital Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), as proposed to be filed by the Company,
the Trust and others as set forth therein with the Securities and Exchange
Commission on or about June 4, 1998;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among the Company, as sponsor, the trustees of the
Trust named therein, and the
<PAGE> 2
Huntington Capital III
June 4, 1998
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated June
4, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
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 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 Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
Huntington Capital III
June 4, 1998
Page 3
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 that 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 Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. 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, P.A.
BJK/BJ
<PAGE> 1
Exhibit 5(d)
[Letterhead of Richards, Layton & Finger, P.A.]
June 4, 1998
Huntington Capital IV
c/o Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
RE: HUNTINGTON CAPITAL IV
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), and Huntington
Capital IV, 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 as of May 21,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on May 21, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 21,
1998, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the Capital Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), as proposed to be filed by the Company,
the Trust and others as set forth therein with the Securities and Exchange
Commission on or about June 4, 1998;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among the Company, as sponsor, the trustees of the
Trust named therein, and the
<PAGE> 2
Huntington Capital IV
June 4, 1998
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated June
4, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
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 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 Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
Huntington Capital IV
June 4, 1998
Page 3
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 that 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 Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. 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, P.A.
BJK/BJ
<PAGE> 1
Exhibit 5(e)
[Letterhead of Richards, Layton & Finger, P.A.]
June 4, 1998
Huntington Capital V
c/o Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
RE: HUNTINGTON CAPITAL V
--------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), and Huntington
Capital V, 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 as of May 21,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on May 21, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 21,
1998, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the Capital Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), as proposed to be filed by the Company,
the Trust and others as set forth therein with the Securities and Exchange
Commission on or about June 4, 1998;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among the Company, as sponsor, the trustees of the
Trust named therein, and the
<PAGE> 2
Huntington Capital V
June 4, 1998
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated June
4, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
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 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 Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
Huntington Capital V
June 4, 1998
Page 3
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 that 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 Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. 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, P.A.
BJK/BJ
<PAGE> 1
Exhibit 5(f)
[Letterhead of Richards, Layton & Finger, P.A.]
June 4, 1998
Huntington Capital VI
c/o Huntington Bancshares Incorporated
Huntington Center
Columbus, Ohio 43287
RE: HUNTINGTON CAPITAL VI
---------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Huntington
Bancshares Incorporated, a Maryland corporation (the "Company"), and Huntington
Capital VI, 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 as of May 21,
1998 (the "Certificate"), as filed in the office of the Secretary of State of
the State of Delaware (the "Secretary of State") on May 21, 1998;
(b) The Declaration of Trust of the Trust, dated as of May 21,
1998, among the Company and the trustees of the Trust named therein;
(c) The Registration Statement (the "Registration Statement")
on Form S-3, including a preliminary prospectus (the "Prospectus"), relating to
the Capital Securities of the Trust representing preferred undivided beneficial
interests in the assets of the Trust (each, a "Capital Security" and
collectively, the "Capital Securities"), as proposed to be filed by the Company,
the Trust and others as set forth therein with the Securities and Exchange
Commission on or about June 4, 1998;
(d) A form of Amended and Restated Declaration of Trust of the
Trust, to be entered into among the Company, as sponsor, the trustees of the
Trust named therein, and the
<PAGE> 2
Huntington Capital VI
June 4, 1998
Page 2
holders, from time to time, of undivided beneficial interests in the assets of
the Trust (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated June
4, 1998, obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise
defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that 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
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
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 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 Capital Security is to be issued by the Trust
(collectively, the "Capital Security Holders") of a Capital Security Certificate
for such Capital Security and the payment for the Capital Security acquired by
it, in accordance with the Declaration and the Registration Statement, and (vii)
that the Capital Securities are issued and sold to the Capital Security Holders
in accordance with the Declaration and the Registration Statement. We have not
participated in the preparation of the Registration Statement and assume no
responsibility for its contents.
<PAGE> 3
Huntington Capital VI
June 4, 1998
Page 3
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 that 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 Business Trust Act.
2. The Capital Securities will represent valid and, subject to
the qualifications set forth in paragraph 3 below, fully paid and nonassessable
undivided beneficial interests in the assets of the Trust.
3. The Capital 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 Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. 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, P.A.
BJK/BJ
<PAGE> 1
Exhibit 8
June 4, 1998
Huntington Bancshares Incorporated
41 South High Street
Columbus, Ohio 43287
Ladies and Gentlemen:
As special tax counsel to Huntington Capital II, Huntington Capital
III, Huntington Capital IV, Huntington Capital V, and Huntington Capital VI,
each a statutory business trust formed under the laws of the State of Delaware
(the "Trusts"), and Huntington Bancshares Incorporated, a Maryland corporation
(the "Company), in connection with the sale by the Trusts of up to $250,000,000
of Capital Securities pursuant to a Prospectus and Prospectus Supplement
contained in the Registration Statement Form S-3, filed with the Securities and
Exchange Commission on May 26, 1998, and assuming that the operative documents
described in the Prospectus and Prospectus Supplement will be performed in
accordance with the terms described therein, we hereby confirm to you our
opinion as set forth under the heading "Certain United States Federal Income Tax
Consequences" in the Prospectus Supplement, subject to the limitations set forth
therein.
This opinion is expressed as of the date hereof and applies only to the
opinions under the heading "Certain United States Federal Income Tax
Consequences" as set forth in the Prospectus Supplement. This opinion is based
in part upon certain factual assumptions and upon certain representations made
by officers of and on behalf of the Company, which representations are being
relied upon by the undersigned and assumed to be true, correct, and complete. If
such representations are inaccurate, this opinion could be adversely affected.
This opinion is rendered as of the date hereof and we shall have no obligation
to update or revise our opinion regarding subsequent changes of the facts stated
or assumed herein or any subsequent changes in applicable law. This opinion is
furnished to you solely for your benefit in connection with the filing of the
Registration Statement and is not to be used or relied upon by any other person
or for any other purpose without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to this firm under the heading
"Certain United States Federal Income Tax Consequences" in the Prospectus
Supplement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Porter, Wright, Morris & Arthur
PORTER, WRIGHT, MORRIS & ARTHUR
