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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
July 24, 1998
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Date of Report (Date of earliest event reported)
Lincoln National Corporation
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(Exact name of registrant as specified in its charter)
Indiana 1-6028 35-1140070
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
200 East Berry Street, Fort Wayne, Indiana 46802-2706
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(Address of principal executive offices) (Zip Code)
(219) 455-2000
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(Registrant's telephone number)
Page 1 of 4 Pages
Exhibit Index on Page 4
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ITEM 5. OTHER EVENTS.
On July 24, 1998, Lincoln National Corporation (the "Company") and
Lincoln National Capital III, a Delaware statutory business trust (the
"Trust"), sold 8,000,000 7.40% Trust Originated Preferred Securities, Series
C (the "Series C TOPrS") of the Trust pursuant to an Underwriting Agreement
dated July 17, 1998 and a Pricing Agreement relating to the Series C TOPrS
dated July 17, 1998 among the Company, the Trust, Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Chase Securities Inc., Lehman Brothers, Morgan
Stanley & Co. Incorporated and PaineWebber Incorporated. The Series C TOPrS
have been registered under the Securities Act of 1933, as amended, pursuant
to a Registration Statement on Form S-3, as amended (No. 333-49201) (the
"Registration Statement") previously filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended. The following
exhibits are being filed herewith in connection with the offering of the
Series C TOPrS pursuant to the Registration Statement.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
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<CAPTION>
Exhibit
Number Description
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<S> <C>
1.1 Underwriting Agreement dated July 17, 1998.
1.2 Pricing Agreement dated July 17, 1998 among the Company and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Lehman
Brothers, Morgan Stanley & Co. Incorporated and PaineWebber Incorporated.
4.1 Amended and Restated Trust Agreement dated July 24, 1998, between the
Company, as Depositor, and The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware, Inc., as Delaware Trustee, and the
Administrative Trustees named therein.
4.2 Form of 7.40% Trust Originated Preferred Security certificate.
4.3 Form of 7.40% Junior Subordinated Deferrable Interest Debentures, Series C.
4.4 Guarantee Agreement dated July 24, 1998, between the Company, as Guarantor,
and The First National Bank of Chicago, as Guarantee Trustee.
8.1 Opinion of Sonnenschein Nath & Rosenthal with respect to certain tax
matters.
</TABLE>
Page 2 of 4 Pages
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LINCOLN NATIONAL CORPORATION
By: /s/ John Steinkamp
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Name: John Steinkamp
Title: Vice-President
Date: July 30, 1998
Page 3 of 4 Pages
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EXHIBIT INDEX
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<CAPTION>
Exhibit
Number Description
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<S> <C>
1.1 Underwriting Agreement dated July 17, 1998.
1.2 Pricing Agreement dated July 17, 1998 among the Company and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, Chase Securities Inc., Lehman
Brothers, Morgan Stanley & Co. Incorporated and PaineWebber Incorporated.
4.1 Amended and Restated Trust Agreement dated July 24, 1998, between the
Company, as Depositor, and The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware, Inc, as Delaware Trustee, and the
Administrative Trustees named therein.
4.2 Form of 7.40% Trust Originated Preferred Security certificate.
4.3 Form of 7.40% Junior Subordinated Deferrable Interest Debentures, Series C.
4.4 Guarantee Agreement dated July 24, 1998, between the Company, as Guarantor,
and The First National Bank of Chicago, as Guarantee Trustee.
8.1 Opinion of Sonnenschein Nath & Rosenthal with respect to certain tax
matters.
Page 4 of 4 Pages
</TABLE>
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EXHIBIT 1.1
LINCOLN NATIONAL CAPITAL III
LINCOLN NATIONAL CAPITAL IV
LINCOLN NATIONAL CAPITAL V
LINCOLN NATIONAL CAPITAL VI
Preferred Securities
(liquidation amount $25 per preferred security)
guaranteed to the extent set forth in the Guarantee by
LINCOLN NATIONAL CORPORATION
Underwriting Agreement Basic Provisions
July 17, 1998
From time to time, Lincoln National Capital III, Lincoln National Capital
IV, Lincoln National Capital V or Lincoln National Capital VI, each a statutory
business trust formed under the laws of the State of Delaware (each a "Trust"
and collectively, the "Trusts"), and Lincoln National Corporation, an Indiana
corporation (the "Guarantor"), as depositor of each Trust and as Guarantor,
propose to enter into one or more Pricing Agreements (each a "Pricing
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 Pricing Agreement (such Trust being the "Designated Trust" with
respect to such Pricing Agreement) shall issue and sell to the firms (such firms
constituting the "Underwriters" with respect to such Pricing Agreement and the
securities specified therein) certain of its preferred securities (the
"Securities") identified in Schedule I to the applicable Pricing Agreement (with
respect to such Pricing Agreement, the "Firm Designated Securities")
representing undivided beneficial interests in the assets of the Designated
Trust, guaranteed by the Guarantor to the extent set forth in the guarantee
agreement (the "Guarantee") identified in such Pricing Agreement. If specified
in such Pricing Agreement, the Designated Trust may grant to the Underwriters
the right to purchase at their election an additional number of Securities,
specified in such Pricing Agreement as provided in Section 3 hereof (the
"Optional Designated Securities"). The Firm Designated Securities and any
Optional Designated Securities are collectively called the "Designated
Securities." The proceeds of the sale of the Designated Securities and of
common securities of the Trust (the "Common Securities") sold to the Guarantor
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are to be invested in junior subordinated deferrable interest debentures of the
Guarantor (the "Subordinated Debentures"), to be issued pursuant to a junior
subordinated indenture (the "Indenture") identified in the Pricing Agreement.
The Designated Securities may be exchangeable into Subordinated Debentures,
as specified in Schedule II to such Pricing Agreement. Pursuant to the Guarantee
Agreement identified in the Pricing Agreement relating to any particular
issuance of Designated Securities, the Designated Securities will be guaranteed
by the Guarantor to the extent set forth in such Pricing Agreement (the
"Guarantee").
The terms and rights of any particular issuance of Designated Securities
shall be as specified in the Pricing Agreement relating thereto and in or
pursuant to the amended and restated trust agreement (the "Trust Agreement")
identified in such Pricing Agreement.
Particular sales of Designated Securities may be made from time to time to
the Underwriters of such Securities, for whom the firms designated as
representatives of the Underwriters of such Securities in the Pricing 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 Basic Provisions (the
"Underwriting Agreement") shall not be construed as an obligation of any Trust
to sell any of the Securities or as an obligation of any of the Underwriters to
purchase any of the Securities. The obligation of any Trust to issue and sell
any of the Securities and the obligation of any of the Underwriters to purchase
any of the Securities shall be evidenced by the Pricing Agreement with respect
to the Securities specified therein. Each Pricing Agreement shall specify the
aggregate number of Firm Designated Securities, the aggregate number of Optional
Designated Securities, if any, the initial public offering price of such Firm
and Optional 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 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 and 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 Pricing
Agreement shall also specify (to the extent not set forth in the Trust Agreement
or the registration statement and prospectus with respect thereto) the terms of
such Securities. A Pricing 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 obligations of the
Underwriters under this Agreement and each Pricing Agreement shall be several
and not joint.
1. Each of the Guarantor and the Designated Trust jointly and severally
represents and warrants to, and agrees with, each of the Underwriters that:
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(a) A registration statement on Form S-3 (File No. 333-49201) in
respect of the Securities, the Subordinated Debentures, the Guarantees and
certain other debt securities, preferred stock, common stock, warrants, stock
purchase contracts, stock purchase units or a combination thereof has been filed
with the Securities and Exchange Commission (the "Commission"); such
registration statement and any post-effective amendment thereto, each in the
form heretofore delivered or to be delivered to the Representatives and,
excluding exhibits to such registration statement, but including all documents
incorporated by reference in the prospectus contained therein, to the
Representatives for each of the other Underwriters, have been declared effective
by the Commission in such form; no other document with respect to such
registration statement or document incorporated by reference therein has
heretofore been filed or transmitted for filing with the Commission; and no stop
order suspending the effectiveness of such registration statement has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in such registration
statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Securities Act of 1933, as amended (the
"Act"), being hereinafter called a "Preliminary Prospectus"; the various parts
of such registration statement, including (i) the information contained in the
form of final prospectus filed with the Commission pursuant to Rule 424(b) under
the Act in accordance with Section 4(a) hereof and deemed by virtue of Rule 430A
under the Act to be part of the registration statement at the time it was
declared effective and (ii) all exhibits thereto and the documents incorporated
by reference in the prospectus contained in the registration statement at the
time such part of the registration statement became effective, being hereinafter
called the "Registration Statement"; the prospectus relating to the Securities,
the Subordinated Debentures and the Guarantees, in the form in which it has most
recently been filed, or transmitted for filing, with the Commission on or prior
to the date of this Agreement, being hereinafter called the "Prospectus"; any
reference herein to any Preliminary Prospectus or the Prospectus shall be deemed
to refer to and include the documents incorporated by reference therein pursuant
to the applicable form under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; any reference to any amendment or
supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and incorporated by reference in such
Preliminary Prospectus or Prospectus, as the case may be; any reference to any
amendment to the Registration Statement shall be deemed to refer to and include
any annual report of the Guarantor filed pursuant to Section 13(a) or 15(d) of
the Exchange Act after the effective date of the Registration Statement that is
incorporated by reference in the Registration Statement; and any reference to
the Prospectus as amended or supplemented shall be deemed to refer to the
Prospectus as amended or supplemented in relation to the applicable Designated
Securities in the form in which it is filed with the Commission pursuant to Rule
424(b) under the Act in accordance with Section 4(a) hereof, including any
documents incorporated by reference therein as of the date of such filing);
(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 Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents contained an untrue
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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 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 Guarantor by an Underwriter of
Designated Securities through the Representatives expressly for use in the
Prospectus as amended or supplemented relating to such Securities;
(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 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 Guarantor by an Underwriter of Designated Securities
through the Representatives expressly for use in the Prospectus as amended or
supplemented relating to such Securities;
(d) Except as described in or contemplated by the Registration
Statement and the Prospectus, there has not been any material adverse change in,
or any adverse development which materially affects, the business, properties,
financial condition or results of operations of the Designated Trust or the
Guarantor and its subsidiaries taken as a whole from the dates as of which
information is given in the Registration Statement and the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any change in the consolidated
capital stock (other than issuances of capital stock upon exercise of options
and stock appreciation rights or pursuant to existing employee benefit plans and
upon conversions of convertible securities which were outstanding on the date of
the latest balance sheet included or incorporated by reference in the
Prospectus) or any increase in the consolidated long-term debt of the Guarantor
and its subsidiaries in excess of 5% or any material adverse change, or any
development involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or results
of operations of the Guarantor and its subsidiaries taken as a whole, otherwise
than as set forth or contemplated in the Prospectus;
(e) The Guarantor and each subsidiary of the Guarantor which meets
the definition of a significant subsidiary as defined in Regulation S-X of the
Commission (each a
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"Significant Subsidiary") has been duly incorporated and is validly existing
as a corporation under the laws of the jurisdiction of its incorporation
(except when failure to be qualified would not have a material adverse effect
on the Guarantor and the subsidiaries taken as a whole), with power and
authority (corporate and other) to own its properties and conduct its
business as described in the Prospectus; and each Designated Trust has been
duly organized and is validly existing as a business trust in good standing
under the laws of the State of Delaware, with power and authority to own,
lease and operate its properties and conduct its business as described in the
Prospectus;
(f) The Guarantor has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the Guarantor
have been duly and validly authorized and issued and are fully paid and
non-assessable; all the outstanding beneficial interests in the Designated
Trust have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the descriptions thereof contained in the
Prospectus;
(g) The Securities have been duly authorized and, when Designated
Securities are issued and delivered pursuant to this Agreement and the Pricing
Agreement with respect to such Designated Securities, 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 Trust Agreement, which will be substantially in the form filed as an
exhibit to the Registration Statement; and the Securities 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;
(h) The holders of the 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;
(i) The Common Securities of the Designated Trust have been duly
authorized on behalf of the Designated Trust by the depositor of the Designated
Trust and upon delivery by the Designated Trust to the Guarantor against
payment therefor as set forth in the Trust Agreement, will be duly and validly
issued and non-assessable 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; the
Common Securities conform to the description thereof contained in the
Registration Statement; and at each Time of Delivery, all of the issued and
outstanding Common Securities of the Designated Trust will be directly owned by
the Guarantor free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity;
(j) The Guarantee, the Trust Agreement, the Subordinated Debentures
and the Indenture (the Guarantee, the Trust Agreement, the Subordinated
Debentures and the Indenture being collectively referred to as the "Guarantor
Agreements") have each been duly authorized and when validly executed and
delivered by the Guarantor and, in the case of the Guarantee, by the Guarantee
Trustee (as defined in the Guarantee), in the case of the Trust Agreement, by
the
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Trustees (as defined in the Trust Agreement) and, in the case of the
Indenture, by the Trustee named therein (the "Debenture Trustee"), and, in
the case of the Subordinated Debentures, when validly issued by the Guarantor
and validly authenticated and delivered by the Debenture Trustee, will
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their respective terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
and other similar laws relating to or affecting creditors' rights generally,
general equitable principles (whether considered in a proceeding in equity
or at law) and an implied covenant of good faith and fair dealing; the Trust
Agreement, the Indenture and the Guarantee have been duly qualified under the
Trust Indenture Act; the Subordinated Debentures are entitled to the benefits
of the Indenture; and the Guarantor Agreements, which will be in
substantially in the form filed as an exhibit to the Registration Statement
will conform to the descriptions thereof in the Prospectus;
(k) The issue and sale of the Designated Securities and the
compliance by the Designated Trust with all of the provisions of the Designated
Securities, the Trust Agreement, this Agreement and any Pricing Agreement, the
purchase of the Subordinated Debentures by the Designated Trust and the
consummation of the transactions herein and therein contemplated 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 Designated
Trust is a party or by which the Designated Trust is bound or to which any of
the property or assets of the Designated Trust is subject, nor will such action
result in any violation of the provisions of the Trust Agreement or any statute
or any order, rule or regulation of any court or governmental agency or body
having jurisdiction over the Designated Trust or any of its properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue and
sale of the Designated Securities and the Common Securities by the Designated
Trust, the purchase of the Subordinated Debentures by the Designated Trust or
the consummation by the Designated Trust of the transactions contemplated by
this Agreement or any Pricing Agreement or the Trust Agreement, except such as
have been, or will have been prior to the Time of Delivery, obtained under the
Act and the Trust Indenture Act and 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 Securities
by the Underwriters; the Designated Trust is and will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation; and the Designated Trust is and will be treated as a
consolidated subsidiary of the Guarantor pursuant to generally accepted
accounting principles;
(l) The issuance by the Guarantor of the Guarantee, the compliance by
the Guarantor with all of the provisions of this Agreement and the Pricing
Agreement, the execution, delivery and performance by the Guarantor of the
Guarantor Agreements, and the consummation of the transactions herein and
therein contemplated 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 Guarantor or any of its subsidiaries is a party or by
which the Guarantor or any of its subsidiaries is bound
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or to which any of the property or assets of the Guarantor or any of its
subsidiaries is subject, except for such conflicts, breaches, violations or
defaults as would not, individually or in the aggregate, have a material
adverse effect on the consolidated financial position of the Guarantor and
its subsidiaries or the consummation by the Guarantor of the transactions
contemplated by this Agreement, the Pricing Agreement or any Guarantor
Agreement, nor will such action result in any violation of the provisions of
the Articles of Incorporation or by-laws of the Guarantor or the charter or
by-laws of any of its subsidiaries or any statute or any order, rule or
regulation of any court or governmental agency or body (including, without
limitation, any insurance regulatory agency or body) having jurisdiction over
the Guarantor or any of its subsidiaries or any of their properties; and no
consent, approval, authorization, order, registration or qualification of or
with any such court or governmental agency or body is required for the issue
of the Guarantee or the consummation by the Guarantor of the other
transactions contemplated by this Agreement or the Pricing Agreement, except
such as have been or will have been obtained prior to the First Time of
Delivery, the registration under the Act of the Securities and the
qualification of the Trust Agreement, the Indenture and the Guarantee under
the Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities or
Blue Sky laws in connection with the purchase of the Securities and
distribution of the Securities by the Underwriters;
(m) Neither the Designated Trust nor the Guarantor is, and after
giving effect to the offering and sale of the Designated Securities, neither the
Designated Trust nor the Guarantor will 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");
(n) Except as described in the Prospectus, there is no action, suit
or proceeding pending, nor to the knowledge of the Guarantor, is there any
action, suit or proceeding threatened, which would be reasonably expected to
result in a material adverse change in the financial condition, results of
operations or business of the Guarantor and its subsidiaries taken as a whole or
which is required to be disclosed in the Registration Statement;
(o) To the best of the Guarantor's knowledge and belief, the
Guarantor has complied in all material respects with each, and the conduct of
its business and the conduct of business by its subsidiaries does not violate in
any material respect any, statutes, laws, regulations, rules, orders or
directives of any federal, state or local governmental authority applicable to
the Guarantor and its subsidiaries;
(p) The accountants who certified the financial statements of the
Guarantor and its subsidiaries included in or incorporated by reference in the
Prospectus are independent public accountants as required by the 1933 Act and
the 1933 Regulations;
(q) The financial statements of the Guarantor and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
and the Prospectus present fairly in all material respects the consolidated
financial position of the Guarantor and its
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consolidated subsidiaries as of the dates indicated and the consolidated
results of their operations for the periods specified; and, except as stated
therein, said financial statements have been prepared in conformity with
generally accepted accounting principles in the United States applied on a
consistent basis; and
(r) This Underwriting Agreement and the Pricing Agreement have been
duly authorized and the Pricing Agreement (incorporating this Underwriting
Agreement) has been executed and delivered by the Guarantor and the Designated
Trust.
2. Upon the execution of the Pricing Agreement applicable to any
Designated Securities and authorization by the Representatives of the release of
such Designated Securities, the several Underwriters propose to offer the Firm
Designated Securities for sale upon the terms and conditions set forth in the
Prospectus as amended or supplemented.
The Designated Trust may specify in the Pricing Agreement applicable to any
Designated Securities that the Designated Trust thereby grants to the
Underwriters the right (an "Over-allotment Option") to purchase at their
election up to the number of Optional Designated Securities set forth in such
Pricing Agreement, on the terms set forth in the paragraph above, for the sole
purpose of covering over-allotments in the sale of the Firm Designated
Securities. Any such election to purchase Optional Designated Securities may be
exercised only by written notice from the Representatives to the Designated
Trust and the Guarantor, given within a period specified in the Pricing
Agreement, setting forth the aggregate number of Optional Designated Securities
to be purchased and the date on which such Optional Designated Securities are to
be delivered, as determined by the Representatives but in no event earlier than
the First Time of Delivery (as defined in Section 3 hereof) or, unless the
Representatives, the Guarantor and the Designated Trust otherwise agree in
writing, earlier than or later than the respective number of business days after
the date of such notice set forth in such Pricing Agreement.
The number of Optional Designated Securities to be added to the number of
Firm Designated Securities to be purchased by each Underwriter as set forth in
Schedule I to the Pricing Agreement applicable to such Designated Securities
shall be, in each case, the number of Optional Designated Securities which each
of the Guarantor and the Designated Trust has been advised by the
Representatives have been attributed to such Underwriter, provided that, if each
of the Guarantor and the Designated Trust has not been so advised, the number of
Optional Designated Securities to be so added shall be, in each case, that
proportion of Optional Designated Securities which the number of Firm Designated
Securities to be purchased by such Underwriter under such Pricing Agreement
bears to the aggregate number of Firm Designated Securities (rounded as the
Representatives may determine to the nearest 100 securities). The total number
of Designated Securities to be purchased by all the Underwriters pursuant to
such Pricing Agreement shall be the aggregate number of Firm Designated
Securities set forth in Schedule I to such Pricing Agreement plus the aggregate
number of Optional Designated Securities which the Underwriters elect to
purchase.
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3. Designated Securities to be purchased by each Underwriter pursuant to
the Pricing Agreement relating thereto, in definitive form to the extent
practicable, and in such authorized denominations and registered in such names
as the Representatives may request upon at least forty-eight hours' prior notice
to the Designated Trust, shall be delivered by or on behalf of the Designated
Trust to the Representatives for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
certified or official bank check or checks, payable to the order of the
Designated Trust in the funds specified in such Pricing Agreement, all in the
manner and at the place and time and date specified in such Pricing Agreement or
at such other place and time and date as the Representatives and the Designated
Trust may agree upon in writing. Such time and date for delivery of Firm
Designated Securities pursuant to the Pricing Agreement relating thereto is
herein called the "First Time of Delivery," such time and date for delivery of
Optional Designated Securities, if not the First Time of Delivery, is herein
called the "Second Time of Delivery," and each such time and date is herein
called the "Time of Delivery."
4. The Designated Trust and the Guarantor jointly and severally agree
with each of the Underwriters of any Designated Securities:
(a) To prepare the Prospectus as amended and supplemented in relation
to the applicable Designated Securities in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under the
Act not later than the Commission's close of business on the second business day
following the execution and delivery of the Pricing Agreement relating to the
applicable Designated Securities or, if applicable, such earlier time as may be
required by Rule 424(b); to make no further amendment or any supplement to the
Registration Statement or Prospectus as amended or supplemented after the date
of the Pricing Agreement relating to such Securities and prior to the Time of
Delivery for such Securities which shall be disapproved by the Representatives
for such Securities promptly after reasonable notice thereof; to advise the
Representatives promptly of any such amendment or supplement after such Time of
Delivery and furnish the Representatives with copies thereof; to file promptly
all reports and any definitive proxy or information statements required to be
filed by the Guarantor with the Commission pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of such Securities, and during
such same period to advise the Representatives, promptly after it receives
notice thereof, of the time when any amendment to the Registration Statement has
been filed or becomes effective or any supplement to the Prospectus or any
amended Prospectus has been filed with the Commission, 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 Securities, of the suspension of the
qualification of such Securities or the Subordinated Debentures issuable upon
exchange of the Securities 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 Securities or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal;
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(b) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify such Securities or the
Subordinated Debentures issuable upon exchange of the Securities 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 Securities, provided that in connection
therewith neither the Designated Trust nor the Guarantor 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 the Underwriters with copies of the Prospectus as
amended or supplemented in such quantities as the Representatives may from time
to time reasonably request, and, if the delivery of a prospectus is required at
any time in connection with the offering or sale of the Securities or the
Subordinated Debentures issuable upon exchange of the Securities and if at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, to notify the Representatives and, upon the request of the
Representatives, to file such document and to prepare and furnish without charge
to each Underwriter and to any dealer in securities as many copies as the
Representatives may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance;
(d) In the case of the Guarantor, 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)), an earnings statement of the Guarantor and its
subsidiaries (which need not be audited) complying with Section 11(a) of the Act
and the rules and regulations of the Commission thereunder (including, at the
option of the Guarantor, Rule 158);
(e) During the period beginning from the date of the Pricing
Agreement for such Designated Securities and continuing to and including the
later of (i) the termination of trading restrictions for such Designated
Securities, as notified to the Guarantor by the Representatives and (ii) 30 days
after the last Time of Delivery for such Designated Securities, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder,
any Securities, any other beneficial interests in the assets of the Designated
Trust, or any preferred securities or any other securities of the Designated
Trust or the Guarantor, 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, preferred securities or any such substantially
similar securities of either the Designated Trust or the Guarantor that are
subordinated to the Senior Debt (as defined in the Indenture) of the
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Guarantor in a manner substantially similar to the subordination of the
Subordinated Debentures without the prior written consent of the
Representatives;
(f) In the case of the Guarantor, to issue the Guarantee concurrently
with the issue and sale of the Securities as contemplated herein or in the
Pricing Agreement; and
(g) To use its best efforts to list, subject to notice of issuance,
the Securities on the New York Stock Exchange.
5. The Guarantor covenants and agrees with the several Underwriters that
the Guarantor will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trusts' and the Guarantor's counsel and
accountants in connection with the registration of the Securities, the
Guarantees and the Subordinated Debentures under the Act and all other expenses
in connection with the preparation, printing and filing of the Registration
Statement, any Preliminary Prospectus and the Prospectus and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers; (ii) the cost of printing or producing any Agreement
among Underwriters, this Agreement, any Pricing Agreement, any Trust Agreement,
any Indenture, any Guarantee, any Blue Sky or similar investment surveys or
memoranda and any other documents in connection with the offering, purchase,
sale and delivery of the Securities; (iii) all reasonable expenses in connection
with the qualification of the Securities, the Guarantees 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 Securities and the Subordinated Debentures; (v)
any filing fees incident to, and the fees and disbursements of counsel for the
Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Securities and the issuance of the Guarantees and the Subordinated Debentures;
(vi) the cost of preparing the Securities and the Subordinated Debentures; (vii)
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 any Trust Agreement, Indenture, Guarantee and the
Securities; (viii) the cost of qualifying the Securities with The Depository
Trust Company; (ix) all fees and expenses in connection with the listing of the
Securities on the New York Stock Exchange and the cost of registering the
Securities under Section 12 of the Exchange Act; and (x) all other costs and
expenses incident to the performance of its obligations hereunder and under any
Over-allotment Option which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
Section 8 and Section 11 hereof, the Underwriters will pay all of their own
costs and expenses, including the fees of their counsel, transfer taxes on
resale of any of the Securities by them, and any advertising expenses connected
with any offers they may make.
6. The obligations of the Underwriters of any Designated Securities under
the Pricing 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
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the Designated Trust and the Guarantor in or incorporated by reference in the
Pricing Agreement relating to such Designated Securities are, at and as of
the date of the Pricing Agreement and at the respective Time of Delivery for
such Designated Securities, true and correct, the condition that the
Designated Trust and the Guarantor shall have performed all of their
respective obligations hereunder theretofore to be performed, and the
following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
4(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued 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) Counsel for the Underwriters shall have furnished to the
Representatives such opinion or opinions, dated the respective Time of Delivery
for such Designated Securities, with respect to the incorporation of the
Guarantor and the formation of the Designated Trust, 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;
(c) Jack D. Hunter, Esq. or the then General Counsel for the
Guarantor, shall have furnished to the Representatives his or her written
opinion, dated the respective Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives, to the effect that:
(i) The Guarantor and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation 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 as amended or supplemented;
(ii) Except as described in the Prospectus, there is no action,
suit or proceeding pending, nor to the best of such counsel's
knowledge, is there any action, suit or proceeding threatened, which
might reasonably be expected to result in a material adverse change in
the financial condition, results of operations or business of the
Guarantor and its subsidiaries taken as a whole or which is required
to be disclosed in the Registration Statement;
(iii) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Designated Trust and the Guarantor;
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<PAGE>
(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of
the provisions of this Agreement, the execution, delivery and
performance by the Guarantor of the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated 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 material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the Guarantor
or any of its subsidiaries is a party or by which the Guarantor or any
of its subsidiaries is bound or to which any of the property or assets
of the Guarantor or any of its subsidiaries is subject, except for
such conflicts, breaches, violations or defaults as would not,
individually or in the aggregate, have a material adverse effect on
the consolidated financial position of the Guarantor and its
subsidiaries or the consummation by the Guarantor of the transactions
contemplated by this Agreement, the Pricing Agreement or any Guarantor
Agreement, nor will such actions result in any violation of the
provisions of the Guarantor's Articles of Incorporation or by-laws or
any statute or any order, rule or regulation known to such counsel of
any court or governmental agency or body (including any insurance
regulatory agency or body (having jurisdiction over the Guarantor or
any of its subsidiaries or any of their properties;
(v) The Guarantor Agreements have each been duly authorized,
executed and delivered by the parties thereto and constitute valid and
legally binding obligations of the Guarantor, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); the
Guarantor 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 Trust
Agreement, the Indenture and the Guarantee have been duly qualified
under the Trust Indenture Act;
(vi) The Designated Securities have been duly authorized by the
Depositor on behalf of the Designated Trust; the issue and sale of the
Designated Securities and the compliance by the Designated Trust with
all of the provisions of the Designated Securities, the Trust
Agreement, this Agreement and the Pricing Agreement with respect to
the Designated Securities, the purchase by the Designated Trust of the
Subordinated Debentures and the consummation of the transactions
herein and therein contemplated 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 agreement or instrument known to such
counsel to which the Designated Trust is a party or by which the
Designated Trust is bound or to which any of the property or assets of
the Designated Trust is subject;
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<PAGE>
(vii) No consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or
body is required for the issue of the Guarantee or the consummation by
the Guarantor of the transactions contemplated by this Agreement or
such Pricing Agreement or the Guarantor Agreements, except such as
have been obtained under the Act and the Trust Indenture Act and 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;
Such counsel shall also furnish you with a letter to the effect that, as
counsel to the Guarantor, he has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made by the
Guarantor or the Designated Trust prior to the Time of Delivery (other than the
financial statements and related schedules and other financial data therein, as
to which such counsel need not comment) 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 or that, as of its
date, the Prospectus as amended or supplemented or any further amendment or
supplement thereto made by the Guarantor or the Designated Trust prior to the
Time of Delivery (other than the financial statements and related schedules and
other financial data therein, as to which such counsel need not comment)
contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances in which they were made, not misleading or that, as of the Time of
Delivery, either the Registration Statement or the Prospectus as amended or
supplemented or any further amendment or supplement thereto made by the
Guarantor or the Designated Trust prior to the Time of Delivery (other than the
financial statements and related schedules and other financial data therein, as
to which such counsel need not comment) contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances in which they were made, not
misleading; and such counsel does not know of any amendment to the Registration
Statement required to be filed or any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement or
required to be incorporated by reference into the Prospectus as amended or
supplemented or required to be described in the Registration Statement or the
Prospectus as amended or supplemented which are not filed or incorporated by
reference or described as required; it being understood that such counsel may
state that he has not independently verified factual statements in the
Prospectus (or any such amendment or supplement) and that no comment need be
given as to the portion of the Registration Statement which shall constitute the
Form T-1;
(d) Sonnenschein Nath & Rosenthal, Counsel for the Designated Trust
and the Guarantor, shall have furnished to the Representatives their written
opinion, dated the respective Time of Delivery for such Designated Securities,
in form and substance satisfactory to the Representatives, to the effect that:
(i) The Guarantor and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation under the laws
of the
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jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus as amended or supplemented;
(ii) Except as described in the Prospectus, there is no action,
suit or proceeding pending, nor to the best of such counsel's
knowledge, is there any action, suit or proceeding threatened, which
might reasonably be expected to result in a material adverse change in
the financial condition, results of operations or business of the
Guarantor and its subsidiaries taken as a whole or which is required
to be disclosed in the Registration Statement;
(iii) This Agreement and the Pricing Agreement with respect to
the Designated Securities have been duly authorized, executed and
delivered by the Designated Trust and the Guarantor;
(iv) The issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, the compliance by the Guarantor with all of
the provisions of this Agreement, the execution, delivery and
performance by the Guarantor of the Guarantor Agreements and the
consummation of the transactions herein and therein contemplated 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 material
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument known to such counsel to which the Guarantor
or any of its Significant Subsidiaries is a party or by which the
Guarantor or any of its Significant Subsidiaries is bound or to which
any of the property or assets of the Guarantor or any of its
Significant Subsidiaries is subject, except for such conflicts,
breaches, violations or defaults as would not, individually or in the
aggregate, have a material adverse effect on the consolidated
financial position of the Guarantor and its subsidiaries or the
consummation by the Guarantor of the transactions contemplated by this
Agreement, the Pricing Agreement or any Guarantor Agreement, nor will
such actions result in any violation of the provisions of the
Guarantor's Articles of Incorporation or by-laws or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body (including any insurance regulatory agency
or body (having jurisdiction over the Guarantor or any of its
Significant Subsidiaries or any of their properties;
(v) The Guarantor Agreements have each been duly authorized,
executed and delivered by the parties thereto and constitute valid and
legally binding obligations of the Guarantor, enforceable in
accordance with their respective terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law); the
Guarantor Agreements conform to the descriptions thereof in the
Prospectus as amended or supplemented; the
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Subordinated Debentures are entitled to the benefits provided by the
Indenture; and the Trust Agreement, the Indenture and the Guarantee
have been duly qualified under the Trust Indenture Act;
(vi) The Designated Securities have been duly authorized by the
Depositor on behalf of the Designated Trust; the issue and sale of the
Designated Securities and the compliance by the Designated Trust with
all of the provisions of the Designated Securities, the Trust
Agreement, this Agreement and the Pricing Agreement with respect to
the Designated Securities, the purchase by the Designated Trust of the
Subordinated Debentures and the consummation of the transactions
herein and therein contemplated 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 agreement or instrument known to such
counsel to which the Designated Trust is a party or by which the
Designated Trust is bound or to which any of the property or assets of
the Designated Trust is subject;
(vii) The Subordinated Debentures, in the form certified by the
Guarantor to be true and correct copies, are in the forms prescribed
in or pursuant to the Indenture, have been duly and validly authorized
by the Guarantor by all necessary corporate action and, when
completed, executed and authenticated as specified in or pursuant to
the Indenture and issued and delivered upon exchange of the Securities
will be valid and binding obligations of the Guarantor, enforceable in
accordance with their terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization, moratorium and other laws of
general applicability relating to or affecting creditors' rights and
to general equity principles (regardless of whether such
enforceability is considered in a proceeding at equity or in law);
(viii) The Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued under
the Act or proceedings therefor initiated or threatened by the
Commission;
(ix) The statements set forth in the Prospectus under the
captions "Description of Junior Subordinated Debentures", "Description
of Preferred Securities", "Description of Guarantees", "Description of
Corresponding Junior Subordinated Debentures" and "Relationship Among
the Preferred Securities, the Corresponding Junior Subordinated
Debentures and the Guarantees" and "Plan of Distribution" and in the
Prospectus Supplement under the captions "Certain Terms of Series __
TOPrS", "Certain Terms of Series __ Subordinated Debentures" and
"Underwriting" insofar as they purport to summarize certain provisions
of documents specifically referred to therein, are accurate summaries
of such provisions in all material respects.
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<PAGE>
(x) No consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the issue of the Guarantee or the consummation by the
Guarantor of the transactions contemplated by this Agreement or such
Pricing Agreement or the Guarantor Agreements, except such as have
been obtained under the Act and the Trust Indenture Act and 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;
(xi) Neither the Designated Trust nor the Guarantor is now, and
giving effect to the transactions contemplated by this Agreement, the
Prospectus, and the application of the proceeds from the sale of the
Designated Securities will be, an "investment company" or an entity
controlled by an "investment company" required to be registered under
the Investment Company Act;
(xii) The documents incorporated by reference in the Prospectus
as amended or supplemented (other than the financial statements and
related schedules and other financial data therein, as to which such
counsel need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in
all material respects with the requirements of the Act or the Exchange
Act, as applicable, and the rules and regulations of the Commission
thereunder; and based upon specified participation of such counsel in
connection with the preparation of the Registration Statement, such
counsel has no reason to believe that any of such documents, when they
became effective or were so filed, as the case may be, contained, in
the case of a registration statement which became effective under the
Act, 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, in the case of other documents
which were filed under the Act or the Exchange Act with the
Commission, an untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein in
the light of the circumstances under which they were made when such
documents were so filed, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or
other financial data included in any of the documents mentioned in
this clause and that such counsel may state that he has not
independently verified factual statements in any such documents; and
Such counsel shall also furnish you with a letter to the effect that, the
Registration Statement and the Prospectus as amended or supplemented and any
further amendments and supplements thereto made by the Guarantor or the
Designated Trust prior to the Time of Delivery for the Designated Securities
(other than the financial statements and related schedules and other financial
data therein, as to which such counsel need not comment) comply as to form in
all material respects with the requirements of the Act and the Trust Indenture
Act and the rules and
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<PAGE>
regulations thereunder; based upon specified participation of such counsel in
connection with the preparation of the Registration Statement and the
Prospectus, such counsel has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made by the
Guarantor or the Designated Trust prior to the Time of Delivery (other than
the financial statements and related schedules and other financial data
therein, as to which such counsel need not comment) 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
or that, as of its date, the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Guarantor or the
Designated Trust prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to
which such counsel need not comment) contained an untrue statement of a
material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances in which they were
made, not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Guarantor or the
Designated Trust prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to
which such counsel need not comment) contains an untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances in which they were
made, not misleading; and such counsel does not know of any amendment to the
Registration Statement required to be filed or any contracts or other
documents of a character required to be filed as an exhibit to the
Registration Statement or required to be incorporated by reference into the
Prospectus as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or supplemented which are
not filed or incorporated by reference or described as required; it being
understood that such counsel may state that such counsel has not
independently verified factual statements in the Prospectus (or any such
amendment or supplement);
(e) Richards, Layton & Finger, special Delaware Counsel to the
Designated Trust and the Guarantor, shall have furnished to you, the Guarantor
and the Designated Trust their written opinion, dated the respective Time of
Delivery, 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;
(ii) Under the Delaware Business Trust Act and the Trust
Agreement, the Designated Trust has the power and authority to own
property and conduct its business, all as described in the Prospectus;
(iii) The Trust Agreement constitutes a valid and legally
binding obligation of the Guarantor and the Trustees, enforceable
against the Guarantor and the Trustees, in accordance with its terms,
subject, as to enforcement, to bankruptcy,
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insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the Designated Trust has the power and authority to (a)
execute and deliver the Pricing Agreement (incorporating this
Underwriting Agreement) and to perform its obligations under this
Underwriting Agreement and the Pricing Agreement, and (b) issue and
perform its obligations under the Designated Securities and the Common
Securities;
(v) Under the Delaware Business Trust Act and the Trust
Agreement, the execution and delivery by the Designated Trust of the
Pricing Agreement (incorporating this Underwriting Agreement) and the
performance by the Designated Trust of its obligations thereunder,
have been duly authorized by all necessary action on the part of the
Designated Trust;
(vi) The Designated Securities have been duly authorized by the
Trust Agreement 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 Trust Agreement; 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
Trust Agreement, to (a) provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from
transfers or exchanges of Securities Certificates and the issuance of
replacement Securities Certificates and (b) provide security and
indemnity in connection with requests of or directions to the Property
Trustee (as defined in the Trust Agreement) to exercise its rights and
remedies under the Trust Agreement;
(vii) The Common Securities have been duly authorized by the
Trust Agreement and are validly issued and represent beneficial
interests in the Designated Trust;
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, 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 Pricing Agreement (incorporating this Underwriting Agreement) and
performance by the Designated Trust of this Underwriting Agreement and
the Pricing Agreement, the
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consummation by the Designated Trust of the transactions contemplated
thereby and 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 Trust Agreement,
or (b) any applicable Delaware law or administrative regulation;
(x) 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, 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;
(xi) 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 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) Sonnenschein Nath & Rosenthal, tax counsel for the Designated
Trust and the Guarantor, 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 under the caption "Certain Federal Income Tax Consequences";
(g) At the respective Time of Delivery for such Designated
Securities, and, if so specified in the Pricing Agreement, on the date of the
Pricing Agreement, the independent accountants of the Guarantor who have
certified the financial statements of the Guarantor and its subsidiaries
included or incorporated by reference in the Registration Statement shall have
furnished to the Representatives a letter, dated such Time of Delivery and, if
applicable, such date of the Pricing Agreement, respectively, to the effect set
forth in Annex II hereto, and with respect to such letter dated such Time of
Delivery, as to such other matters as the Representatives may reasonably request
and in form and substance satisfactory to the Representatives;
(h) Except as contemplated in the Prospectus, since the respective
dates as of which information is given in the Prospectus as amended or
supplemented until the respective Time of Delivery of the Designated Securities,
there shall not have been any changes in the
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<PAGE>
consolidated capital stock (other than issuances of capital stock upon
exercise of options and stock appreciation rights or pursuant to existing
employee benefit plans and upon conversions of convertible securities which
were outstanding on the date of the latest balance sheet included or
incorporated by reference in the Prospectus) or any increase in the
consolidated long-term debt of the Guarantor and its subsidiaries in excess
of 5% or any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Guarantor and its subsidiaries taken
as a whole, otherwise than as set forth or contemplated in the Prospectus as
amended or supplemented, the effect of which, in any such case is in the
judgment of the Representatives so material and adverse as to make 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 as amended or supplemented;
(i) On or after the date of the Pricing Agreement relating to the
Designated Securities until the respective Time of Delivery of the Designated
Securities (i) no downgrading shall have occurred in the rating accorded the
Guarantor's debt securities or preferred stock by any "nationally recognized
statistical rating organization," as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall
have publicly announced that it has under surveillance or review, with possible
negative implications, its rating of any of the Guarantor's debt securities or
preferred stock.
(j) On or after the date of the Pricing Agreement relating to the
Designated Securities until the respective Time of Delivery of 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 New York Stock
Exchange; (ii) a suspension or material limitation in trading in the Guarantor's
securities on the New York Stock Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal or New York State
authorities; or (iv) 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 Clause (iv) 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 as amended or
supplemented relating to the Designated Securities;
(k) The Designated Securities to be sold by the Designated Trust at
the respective Time of Delivery shall have been duly listed, subject to notice
of issuance, on the New York Stock Exchange; and
(l) The Designated Trust and the Guarantor shall have furnished or
caused to be furnished to the Representatives at the respective Time of Delivery
for the Designated Securities certificates of officers of the Designated Trust
and the Guarantor satisfactory to the Representatives as to the accuracy of the
representations and warranties of the Designated Trust and the Guarantor herein
at and as of such Time of Delivery, as to the performance by the Designated
Trust and the Guarantor of all of their obligations hereunder to be performed at
or
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<PAGE>
prior to such Time of Delivery, as to the matters set forth in subsections
(a) and (h) of this Section and as to such other matters as the
Representatives may reasonably request.
7. (a) The Designated Trust and the Guarantor will jointly and severally
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any amendment or supplement thereto,
or arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the Designated Trust nor the Guarantor
shall be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, any preliminary prospectus supplement, the Registration Statement,
the Prospectus as amended or supplemented and any other prospectus relating to
the Designated Securities, or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Designated Trust or
the Guarantor by any Underwriter of Designated Securities through the
Representatives expressly for use in the Prospectus as amended or supplemented
relating to such Securities and; provided, further, that neither the Designated
Trust nor the Guarantor shall be liable to any Underwriter under the indemnity
agreement in this subsection (a) with respect to any loss, claim, damage or
liability resulting from an untrue or alleged untrue statement or omission or
alleged omission of a material fact in a Preliminary Prospectus to the extent
that a court of competent jurisdiction has found by final and nonappealable
order that any such loss, claim, damage or liability of such Underwriter results
from the fact that such Underwriter sold Securities to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus as then amended or supplemented (excluding documents
incorporated by reference), if such Underwriter failed to make efforts generally
consistent with the then prevailing industry practice to effect such delivery
and (i) such delivery to such person is required by Section 5 of the Act, (ii)
the Designated Trust or the Guarantor has furnished copies of such Prospectus as
amended or supplemented to such Underwriter a reasonable period of time prior to
the Underwriter being required so to deliver such Prospectus as amended or
supplemented and (iii) such Prospectus as amended or supplemented corrected the
untrue or alleged untrue statement or omission or alleged omission of material
fact contained in the Preliminary Prospectus.
(b) Each Underwriter will indemnify and hold harmless the Designated
Trust and the Guarantor against any losses, claims, damages or liabilities to
which the Designated Trust or the Guarantor may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Prospectus,
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any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to
the Securities, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in any Preliminary Prospectus, any preliminary prospectus
supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Securities, or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Designated Trust or the Guarantor by such
Underwriter through the Representatives expressly for use therein; and will
reimburse the Designated Trust or the Guarantor for any legal or other
expenses reasonably incurred by the Designated Trust or the Guarantor in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party, be counsel to the indemnifying
party), and, after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party shall
not be liable to such indemnified party under such subsection for any legal
expenses of other counsel or any other expenses, in each case subsequently
incurred by such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation; PROVIDED, HOWEVER, that an indemnified
party shall have the right to retain its own counsel, with reasonable fees and
expenses to be paid by the indemnifying party, if the indemnified party
reasonably believes that representation of such indemnified party by the counsel
retained by the indemnifying party would be inappropriate due to actual or
potential differing interests between such indemnified party and any other party
represented by such counsel in such proceeding (it being understood that in no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to one local counsel in each applicable
jurisdiction) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances).
No indemnifying party shall, without the written consent of the indemnified
party, effect the settlement or compromise of, or consent to the entry of any
judgment with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder (whether or not
the indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does
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not include any statement as to, or an admission of, fault, culpability or a
failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Designated Trust and the Guarantor on the one
hand and the Underwriters of the Designated Securities on the other from the
offering of the Designated Securities to which such loss, claim, damage or
liability (or action in respect thereof) relates. If, however, the allocation
provided by the immediately preceding sentence is not permitted by applicable
law or if the indemnified party failed to give the notice required under
subsection (c) above, then each indemnifying party shall contribute to such
amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Designated Trust and the Guarantor on the one hand and the
Underwriters of the Designated Securities on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Designated
Trust and the Guarantor on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Designated Trust less the
total underwriting compensation paid by the Guarantor bear to the total
underwriting discounts and commissions received by such Underwriters. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Designated Trust and the Guarantor on the one hand or such Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Designated
Trust, the Guarantor and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation or by any other method of allocation (even if the Underwriters
were treated as one entity for such purpose) which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include 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 subsection (d),
no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the applicable Designated Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
obligations of the Underwriters of Designated Securities in this subsection (d)
to contribute
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<PAGE>
are several in proportion to their respective underwriting obligations with
respect to such Securities and not joint.
(e) The obligations of the Designated Trust and the Guarantor under
this Section 7 shall be in addition to any liability which the Designated Trust
and the Guarantor may otherwise have and shall extend, upon the same terms and
conditions, to each person, if any, who controls any Underwriter within the
meaning of the Act; and the obligations of the Underwriters under this Section 7
shall be in addition to any liability which the respective Underwriters may
otherwise have and shall extend, upon the same terms and conditions, to each
officer and director of the Guarantor, to each administrative trustee of the
Designated Trust and to each person, if any, who controls the Designated Trust
or the Guarantor within the meaning of the Act.
8. (a) If any Underwriter shall default in its obligation to purchase
the Firm Designated Securities or the Optional Designated Securities which it
has agreed to purchase under the Pricing Agreement relating to such Designated
Securities, the Representatives may in their discretion arrange for themselves
or another party or other parties to purchase such Designated Securities on the
terms contained herein. If within thirty-six hours after such default by any
Underwriter the Representatives do not arrange for the purchase of such Firm
Designated Securities or such Optional Designated Securities, as the case may
be, then the Designated Trust and the Guarantor shall be entitled to a further
period of thirty-six hours within which to procure another party or other
parties satisfactory to the Representatives to purchase such Designated
Securities on such terms. In the event that, within the respective prescribed
period, the Representatives notify the Designated Trust and the Guarantor that
they have so arranged for the purchase of such Designated Securities, or the
Designated Trust and the Guarantor notifies the Representatives that it has so
arranged for the purchase of such Designated Securities, the Representatives or
the Designated Trust and the Guarantor shall have the right to postpone the Time
of Delivery for such Designated Securities for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus as amended or supplemented, or in any
other documents or arrangements, and the Designated Trust and the Guarantor
agree to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Representatives may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to the Pricing Agreement with respect to
such Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Designated Trust and the Guarantor as provided in subsection (a) above, the
aggregate number of such Designated Securities which remains unpurchased does
not exceed one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, then the Designated Trust and the
Guarantor shall have the right to require each non-defaulting Underwriter to
purchase the number of Firm Designated Securities or Optional Designated
Securities, as the case may be, which such Underwriter agreed to purchase
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<PAGE>
under the Pricing Agreement relating to such Designated Securities and, in
addition, to require each non-defaulting Underwriter to purchase its pro rata
share (based on the number of Firm Designated Securities or Optional
Designated Securities, as the case may be, which such Underwriter agreed to
purchase under such Pricing Agreement) of the Firm Designated Securities or
Optional Designated Securities, as the case may be, of such defaulting
Underwriter or Underwriters for which such arrangements have not been made;
but nothing herein shall relieve a defaulting Underwriter from liability for
its default.
(c) If, after giving effect to any arrangements for the purchase of
the Firm Designated Securities or Optional Designated Securities, as the case
may be, of a defaulting Underwriter or Underwriters by the Representatives and
the Designated Trust and the Guarantor as provided in subsection (a) above, the
aggregate number of Firm Designated Securities or Optional Designated
Securities, as the case may be, which remains unpurchased exceeds one-eleventh
of the aggregate number of the Firm Designated Securities or Optional Designated
Securities, as the case may be, to be purchased at the respective Time of
Delivery, as referred to in subsection (b) above, or if the Designated Trust and
the Guarantor shall not exercise the right described in subsection (b) above to
require non-defaulting Underwriters to purchase Firm Designated Securities or
Optional Designated Securities, as the case may be, of a defaulting Underwriter
or Underwriters, then the Pricing Agreement relating to such Firm Designated
Securities or Optional Designated Securities, as the case may be, shall
thereupon terminate, without liability on the part of any non-defaulting
Underwriter, the Designated Trust or the Guarantor, except for the expenses to
be borne by the Designated Trust, the Guarantor and the Underwriters as provided
in Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Underwriter from liability
for its default.
9. The respective indemnities, agreements, representations, warranties
and other statements of the Designated Trust, the Guarantor and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, 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 Guarantor, or any officer or director
or controlling person of the Designated Trust or the Guarantor, and shall
survive delivery of and payment for the Securities.
10. If any Pricing Agreement or Over-allotment Option shall be terminated
pursuant to Section 8 hereof, neither the Designated Trust nor the Guarantor
shall then be under any liability to any Underwriter with respect to the Firm
Designated Securities or Optional Designated Securities covered by such Pricing
Agreement except as provided in Section 5 and Section 7 hereof; but, if for any
other reason, Designated Securities are not delivered by or on behalf of the
Designated Trust as provided herein, the Designated Trust and the Guarantor will
reimburse the Underwriters through the Representatives for all out-of-pocket
expenses approved in writing by the Representatives, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of such Designated Securities,
but the Designated Trust and the Guarantor shall then be under no further
liability to
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any Underwriter with respect to such Designated Securities except as provided
in Section 5 and Section 7 hereof.
11. 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 Pricing 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 Pricing Agreement; and if to
the Designated Trust or the Guarantor shall be delivered or sent by mail, telex
or facsimile transmission to the address of the Designated Trust or the
Guarantor set forth in the Registration Statement: Attention: Corporate
Secretary, with a copy to Lincoln National Corporation, 200 East Berry Street,
Fort Wayne, Indiana 46802-2706. Attention: Office of the Treasurer, Facsimile
Transmission No. (219) 455-6265; provided, however, that any notice to an
Underwriter pursuant to Section 7(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Underwriter at its address set forth in
its Underwriters' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Designated Trust and the Guarantor by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
12. This Agreement and each Pricing Agreement shall be binding upon, and
inure solely to the benefit of, the Underwriters, the Designated Trust and the
Guarantor and, to the extent provided in Section 7 and Section 9 hereof, the
officers and directors of the Designated Trust or the Guarantor and each person
who controls the Designated Trust, the Guarantor 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 this
Agreement or any such Pricing Agreement. No purchaser of any of the Securities
from any Underwriter shall be deemed a successor or assign by reason merely of
such purchase.
13. Time shall be of the essence of each Pricing Agreement. As used
herein, "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
14. THIS AGREEMENT AND EACH PRICING AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
15. This Agreement and each Pricing Agreement may be executed by any one
or more of the parties hereto and 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.
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ANNEX I
PRICING AGREEMENT
To the Underwriters named in
Schedule I to the Underwriting Agreement
c/o ____________________
________________________
________________________
__________ _____, _____
Dear Sirs:
Lincoln National Capital ___, a statutory business trust formed under the
laws of the State of Delaware (the "Designated Trust") and Lincoln National
Corporation, an Indiana corporation (the "Guarantor"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
____________, 1998 (the "Underwriting Agreement"), between the Guarantor on the
one hand and the Underwriters named in Schedule I to the Underwriting Agreement,
on the other hand, to issue and sell to the Underwriters named in Schedule I
hereto (the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities" consisting of Firm Designated Securities and any
Optional Designated Securities the Underwriters may elect to purchase). Each of
the provisions of the Underwriting Agreement is incorporated herein by reference
in its entirety, and shall be deemed to be a part of this 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 Pricing Agreement, except that each
representation and warranty which refers to the Prospectus in Section 2 of the
Underwriting Agreement shall be deemed to be a representation or warranty as of
the date of the Underwriting Agreement in relation to the Prospectus (as therein
defined), and also a representation and warranty as of the date of this Pricing
Agreement in relation to the Prospectus as amended or supplemented relating to
the Designated Securities which are the subject of this Pricing Agreement. Each
reference to the Representatives herein and in the provisions of the
Underwriting Agreement so incorporated by reference shall be deemed to refer to
you.
Unless otherwise defined herein, terms defined in the Underwriting
Agreement 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 Underwriting
Agreement 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.
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Subject to the terms and conditions set forth herein and in the
Underwriting Agreement 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 Underwriters set
forth in Schedule II hereto, the number of Firm Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Designated Securities, as provided below, 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 purchase price to the Underwriters set out in Schedule II hereto
that portion of the number of Optional Designated Securities as to which such
election shall have been exercised.
The Designated Trust hereby grants to each of the Underwriters the right to
purchase at their election up to the number of Optional Designated Securities
set forth opposite the name of such Underwriter in Schedule I hereto on the
terms referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Designated Securities. Any such
election to purchase Optional Designated Securities may be exercised by written
notice from the Representatives to the Designated Trust and the Guarantor given
within a period of 10 calendar days after the date of this Pricing Agreement,
setting forth the aggregate number of Optional Designated Securities to be
purchased and the date on which such Optional Designated Securities are to be
delivered, as determined by the Representatives, but in no event earlier than
the First Time of Delivery or, unless the Representatives, the Guarantor and the
Designated Trust otherwise agree in writing, no earlier than two or later than
ten business days after the date of such notice.
If the foregoing is in accordance with your understanding, please sign and
return to us eight 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 Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Designated Trust and the Guarantor. It is understood that
your acceptance of
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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 Guarantor for examination upon request, but without
warranty on the part of the Representatives as to the authority of the signers
thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By:_______________________________________
Name:
Title:
LINCOLN NATIONAL CAPITAL _____
By: Lincoln National Corporation, as Depositor
By:_______________________________________
Name:
Title:
Accepted as of the date hereof:
[Name(s) of Representative(s)]
As Representatives of the Underwriters Named in Schedule I hereto
___________________________________
On behalf of each of the Underwriters named on Schedule I hereto
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SCHEDULE I
<TABLE>
<CAPTION>
Number of Firm Number of
Designated Maximum Optional
Securities to be Designated Securities
Underwriters Purchased to be Purchased
- ------------ ---------------- ---------------------
<S> <C> <C>
[Names of Representatives] . . .
[Names of Underwriters] . . . .
---------------- ---------------------
Total . . . . . . . . . . .
---------------- ---------------------
---------------- ---------------------
</TABLE>
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SCHEDULE II
DESIGNATED TRUST:
Lincoln National Capital _________
TITLE OF DESIGNATED SECURITIES:
____% ____________________ Preferred Securities, Series ___
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities: $___________________
Maximum aggregate principal amount of Optional Designated Securities:
$__________________
PRICE TO PUBLIC:
______% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
______% of the principal amount of the Designated Securities
UNDERWRITERS' COMPENSATION:
$_____ per Designated Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearing House same-day funds
ACCOUNTANTS' LETTER TO BE DELIVERED ON DATE OF PRICING AGREEMENT:
Yes.
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated __________________, between the
Guarantor and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of ____________________, between the
Guarantor and _________________, as Debenture Trustee (the "Indenture")
GUARANTEE:
Guarantee Agreement, dated as of _________________, between Guarantor and
Guarantee Trustee
MATURITY:
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<PAGE>
INTEREST RATE:
_____%
INTEREST PAYMENT DATES:
EXTENSION PERIOD:
REDEMPTION PROVISIONS:
[The redemption provisions set forth in Section 402 of the Trust Agreement
shall apply to the Designated Securities.]
SINKING FUND PROVISIONS:
No sinking fund provisions.
[FIRST] TIME OF DELIVERY:
10:00 a.m., New York City time _______ ___, ____
CLOSING LOCATION:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
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<PAGE>
ANNEX II
ACCOUNTANTS' LETTER
Pursuant to Section 6(g) of the Underwriting Agreement, the Guarantor's
independent certified public accountants shall furnish letters to the effect
that:
(i) they are independent certified public accountants with respect to
the Guarantor and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) in their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if reasonably requested by the Representatives, they have made a
review in accordance with standards established by the American Institute
of Certified Public Accountants of the consolidated interim financial
statements, selected financial data, pro forma financial information,
prospective financial statements and/or condensed financial statements
derived from audited financial statements of the Guarantor for the periods
specified in such letter, as indicated in their reports thereon, copies of
which have been furnished to the representatives of the Underwriters (the
"Representatives");
(iii) they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus and/or included in the Guarantor's quarterly reports on Form
10-Q incorporated by reference into the Prospectus as indicated in their
reports thereon copies of which have been separately furnished to the
Representatives; and on the basis of specified procedures including
inquiries of officials of the Guarantor who have responsibility for
financial and accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph (vi)(A)(i) below
comply as to form in all material respects with the applicable accounting
requirements of the Act and the Exchange Act and the related published
rules and regulations, nothing came to their attention that caused them to
believe that the unaudited condensed consolidated financial statements do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) the unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Guarantor
for the five most recent fiscal
-1-
<PAGE>
years included in the Prospectus and included or incorporated by
reference in Item 2 of the Guarantor's Registration Statement on Form 10
or Item 6 of the Guarantor's Annual Report on Form 10-K for the most
recent fiscal year, as applicable, agrees with the corresponding amounts
(after restatement where applicable) in the audited consolidated
financial statements for the five such fiscal years which were included
or incorporated by reference in the Guarantor's Registration Statement
on Form 10 or the Guarantor's Annual Reports on Form 10-K for such
fiscal years, as applicable;
(v) on the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Guarantor and its subsidiaries, inspection of
the minute books of the Guarantor and its subsidiaries since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, inquiries of officials of the Guarantor and
its subsidiaries responsible for financial accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included
or incorporated by reference in the Guarantor's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus (if any) do not comply as to form in
all material respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related published rules and
regulations thereunder or are not in conformity with generally accepted
accounting principles applied on a basis substantially consistent with the basis
for the audited consolidated statements of income, consolidated balance sheets
and consolidated statements of cash flows included or incorporated by reference
in the Guarantor's Registration Statement on Form 10 or the Guarantor's Annual
Report on Form 10-K for the most recent fiscal year, as applicable;
(B) any other unaudited income statement data and balance sheet items
included in the Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data and items were
derived, and any such unaudited data and items were not determined on a basis
substantially consistent with the basis for the corresponding amounts in the
audited consolidated financial statements included or incorporated by reference
in the Guarantor's Registration Statement on Form 10 or the Guarantor's Annual
Report on Form 10-K for the most recent fiscal year, as applicable;
(C) the unaudited financial statements which were not included in the
Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited financial statements included or incorporated by reference in the
Guarantor's Registration Statement on Form 10 or the Guarantor's Annual Report
on Form 10-K for the most recent fiscal year, as applicable;
-2-
<PAGE>
(D) any unaudited pro forma consolidated condensed financial statements
included or incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements of the Act
and the published rules and regulations thereunder or the pro forma adjustments
have not been properly applied to the historical amounts in the compilation of
those statements;
(E) as of a specified date not more than five days prior to the date of
such letter, there have been any changes in the consolidated capital stock
(other than issuances of capital stock upon exercise of options and stock
appreciation rights or pursuant to existing benefit plans and upon conversions
of convertible securities which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated short-term borrowings or long-term debt of the
Guarantor and its subsidiaries or any other items specified by the
Representatives, or any decreases in total investments, total assets or any
other items specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included or incorporated by reference
in the Prospectus, except in each case for changes, increases or decreases which
the Prospectus discloses have occurred or may occur or which are described in
such letter; and
(F) for the period from the date of the latest financial statements
included or incorporated by reference in the Prospectus to the specified date
referred to in Clause (E) there were any decreases in consolidated net revenues
or operating profit or the total or per share amounts of consolidated net income
or other items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of corresponding length
specified by the Representatives, except in each case for increases or decreases
which the Prospectus discloses have occurred or may occur or which are described
in such letter; and
(vi) in addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (v) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Guarantor and its subsidiaries, which appear in the Prospectus
(excluding documents incorporated by reference), or in Part II of, or in
exhibits and schedules to, the Registration Statement specified by the
Representatives or in documents incorporated by reference in the Prospectus
specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting records
of the Guarantor and its subsidiaries and have found them to be in
agreement.
All references in this Annex II to the Prospectus shall be deemed to refer
to the Prospectus (including the documents incorporated by reference therein) as
defined in the Underwriting Agreement as of the date of the letter delivered on
the date of the Pricing Agreement, if so
-3-
<PAGE>
delivered, for purposes of such letter and to the Prospectus as amended
or supplemented (including the documents incorporated by reference
therein) in relation to the applicable Designated Securities for
purposes of the letter delivered at the Time of Delivery for such
Designated Securities.
-4-
<PAGE>
EXHIBIT 1.2
PRICING AGREEMENT
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Chase Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
As representatives of the Underwriters named in
Schedule I to the Underwriting Agreement
c/o Merrill Lynch, Pierce, Fenner & Smith Incorporated
Sears Tower, Suite 5500
Chicago, Illinois 60606
Dear Sirs:
Lincoln National Capital III, a statutory business trust formed under the
laws of the State of Delaware (the "Designated Trust") and Lincoln National
Corporation, an Indiana corporation (the "Guarantor"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated July
17, 1998 (the "Underwriting Agreement"), between the Guarantor on the one hand
and the Underwriters named in Schedule I to the Underwriting Agreement, on the
other hand, to issue and sell to the Underwriters named in Schedule I hereto
(the "Underwriters") the Securities specified in Schedule II hereto (the
"Designated Securities"). Each of the provisions of the Underwriting Agreement
is incorporated herein by reference in its entirety, and shall be deemed to be a
part of this 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 Pricing
Agreement, except that each representation and warranty which refers to the
Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a
representation or warranty as of the date of the Underwriting Agreement in
relation to the Prospectus (as therein defined), and also a representation and
warranty as of the date of this Pricing Agreement in relation to the Prospectus
as amended or supplemented relating to the Designated Securities which are the
subject of this Pricing Agreement. Each reference to the Representatives herein
and in the provisions of the Underwriting Agreement so incorporated by reference
shall be deemed to refer to you.
Unless otherwise defined herein, terms defined in the Underwriting
Agreement 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
<PAGE>
Securities pursuant to Section 12 of the Underwriting Agreement 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
Underwriting Agreement incorporated herein by reference, 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 Underwriters set
forth in Schedule II hereto, the number of Designated Securities set forth
opposite the name of such Underwriter in Schedule I hereto shall have been
exercised.
If the foregoing is in accordance with your understanding, please sign and
return to us eight 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 Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
<PAGE>
Underwriters, the Designated Trust and the Guarantor. 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 Guarantor for
examination upon request, but without warranty on the part of the
Representatives as to the authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ Richard C. Vaughan
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
LINCOLN NATIONAL CAPITAL III
By: Lincoln National Corporation, as Depositor
By: /s/ Janet C. Chrzan
Name: Janet C. Chrzan
Title: Administrative Trustee
Accepted as of the date hereof:
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Chase Securities Inc.
Lehman Brothers Inc.
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
As Representatives of the Underwriters Named in Schedule I hereto
/s/ John P. Tullsen Jr.
- --------------------------------
On behalf of each of the Underwriters named on Schedule I hereto
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Number of
Designated
Securities to be
Underwriters Purchased
- ------------ ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated 1,080,000
Chase Securities Inc. 1,080,000
Lehman Brothers Inc. 1,080,000
Morgan Stanley & Co. Incorporated 1,080,000
PaineWebber Incorporated 1,080,000
BT Alex. Brown Incorporated 80,000
Robert W. Baird & Co. Incorporated 80,000
Bear, Stearns & Co. Inc. 80,000
ABN AMRO Incorporated 80,000
CIBC Oppenheimer Corp. 80,000
Cowen & Company 80,000
Dain Rauscher Wessels 80,000
A.G. Edwards & Sons, Inc. 80,000
EVEREN Securities, Inc. 80,000
Interstate/Johnson Lane Corporation 80,000
Janney Montgomery Scott Inc. 80,000
Legg Mason Wood Walker, Incorporated 80,000
Olde & Co., Incorporated 80,000
Piper Jaffray Inc. 80,000
Raymond James & Associates, Inc. 80,000
Tucker Anthony Incorporated 80,000
Wheat First Securities, Inc. 80,000
J.C. Bradford & Co. 40,000
Conning & Company 40,000
Craigie Incorporated 40,000
Crowell, Weedon & Co. 40,000
Fahnestock & Co. Inc. 40,000
Fidelity Capital Markets, a division of Nat'l Fin'l Svs Corp. 40,000
First Albany Corporation 40,000
First of Michigan Corporation 40,000
Gibraltar Securities Co. 40,000
Gruntal & Co., L.L.C. 40,000
Hilliard Lyons Inc. 40,000
Wayne Hummer Investments Inc. 40,000
Kirkpatrick, Pettis, Smith, Polian Inc. 40,000
<PAGE>
McDonald & Company Securities, Inc. 40,000
McGinn, Smith & Co., Inc. 40,000
Mesirow Financial Inc. 40,000
Morgan Keegan & Company, Inc. 40,000
The Ohio Company 40,000
Ormes Capital Markets, Inc. 40,000
Parker/Hunter Incorporated 40,000
Pryor, McClendon, Counts & Co., Inc. 40,000
The Robinson-Humphrey Company, LLC 40,000
Roney Capital Markets, a division of First Chicago
Capital Markets, Inc. 40,000
Sands Brothers & Co., Ltd. 40,000
Scott & Stringfellow, Inc. 40,000
Stephens Inc. 40,000
Stifel, Nicolaus & Company, Incorporated 40,000
Stone & Youngberg 40,000
TD Securities (USA) Inc. 40,000
Trilion International Inc. 40,000
Utendahl Capital Partners, L.P. 40,000
---------
Total 8,000,000
---------
</TABLE>
<PAGE>
SCHEDULE II
DESIGNATED TRUST:
Lincoln National Capital III
TITLE OF DESIGNATED SECURITIES:
7.40% Trust Originated Preferred Securities, Series C ("TOPrS")
AGGREGATE PRINCIPAL AMOUNT:
Aggregate principal amount of Firm Designated Securities: $200,000,000
PRICE TO PUBLIC
100% of the principal amount of the Designated Securities
PURCHASE PRICE BY UNDERWRITERS:
100% of the principal amount of the Designated Securities
UNDERWRITERS' COMPENSATION:
$.7875 per Designated Security
SPECIFIED FUNDS FOR PAYMENT OF PURCHASE PRICE:
New York Clearing House same-day funds
ACCOUNTANTS' LETTER TO BE DELIVERED ON DATE OF PRICING AGREEMENT:
Yes.
TRUST AGREEMENT:
Amended and Restated Trust Agreement, dated July 24, 1998, between the
Guarantor and the Trustees named therein
<PAGE>
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the
Guarantor and First Chicago National Bank, as Debenture Trustee (the
"Indenture")
GUARANTEE:
Guarantee Agreement, dated as of July 24, 1998, between Guarantor and
Guarantee Trustee
MATURITY:
September 30, 2028, which date may be extended to a date not later than
September 30, 2047 if certain conditions are met.
INTEREST RATE:
7.40%
INTEREST PAYMENT DATES:
March 31, June 30, September 30 and December 31
EXTENSION PERIOD:
20 quarters
REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 402 of the Trust Agreement
shall apply to the Designated Securities.
SINKING FUND PROVISIONS:
No sinking fund provisions.
FIRST TIME OF DELIVERY:
10:00 a.m., New York City time July 24, 1998
<PAGE>
CLOSING LOCATION:
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
NAMES AND ADDRESSES OF REPRESENTATIVES:
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Merrill Lynch & Co.
Sears Tower, Suite 5500
Chicago, IL 60606
<PAGE>
EXHIBIT 4.1
-----------------------------------------------------------------
-----------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
AMONG
LINCOLN NATIONAL CORPORATION, AS DEPOSITOR,
THE FIRST NATIONAL BANK OF CHICAGO,
AS PROPERTY TRUSTEE
FIRST CHICAGO DELAWARE, INC.,
AS DELAWARE TRUSTEE,
AND
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
DATED AS OF July 24, 1998
LINCOLN NATIONAL CAPITAL III
-----------------------------------------------------------------
-----------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II Establishment of the Trust. . . . . . . . . . . . . . . . . . . . . 10
Section 2.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 2.2 Office of the Delaware Trustee; Principal Place of Business. . 11
Section 2.3 Initial Contribution of Trust Property; Organizational
Expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.4 Issuance of the Preferred Securities . . . . . . . . . . . . . 11
Section 2.5 Issuance of the Common Securities; Subscription and
Purchase of Debentures . . . . . . . . . . . . . . . . . . . . 11
Section 2.6 Declaration of Trust.. . . . . . . . . . . . . . . . . . . . . 12
Section 2.7 Authorization to Enter into Certain Transactions . . . . . . . 12
Section 2.8 Assets of Trust. . . . . . . . . . . . . . . . . . . . . . . . 16
Section 2.9 Title to Trust Property. . . . . . . . . . . . . . . . . . . . 16
ARTICLE III Payment Account . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.1 Payment Account. . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV Distributions; Redemption . . . . . . . . . . . . . . . . . . . . . 17
Section 4.1 Distributions. . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.2 Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 4.3 Subordination of Common Securities.. . . . . . . . . . . . . . 20
Section 4.4 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . 20
Section 4.5 Tax Returns and Reports. . . . . . . . . . . . . . . . . . . . 21
Section 4.6 Payment of Taxes, Duties, Etc. of the Trust. . . . . . . . . . 21
Section 4.7 Payments under Indenture . . . . . . . . . . . . . . . . . . . 21
ARTICLE V Trust Securities Certificates . . . . . . . . . . . . . . . . . . . 21
Section 5.1 Initial Ownership. . . . . . . . . . . . . . . . . . . . . . . 21
Section 5.2 The Trust Securities Certificates. . . . . . . . . . . . . . . 21
Section 5.3 Execution and Delivery of Trust Securities Certificates. . . . 22
Section 5.4 Registration of Transfer and Exchange of Preferred
Securities Certificates . . . . . . . . . . . . . . . . . . . 22
Section 5.5 Mutilated, Destroyed, Lost or Stolen Trust Securities
Certifi. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 5.6 Persons Deemed Securityholders.. . . . . . . . . . . . . . . . 23
Section 5.7 Access to List of Securityholders' Names and Addresses . . . . 24
Section 5.8 Maintenance of Office or Agency. . . . . . . . . . . . . . . . 24
Section 5.9 Appointment of Paying Agent. . . . . . . . . . . . . . . . . . 24
Section 5.10 Ownership of Common Securities by Depositor. . . . . . . . . . 25
Section 5.11 Book-Entry Preferred Securities Certificates; Common
Securities Certificate . . . . . . . . . . . . . . . . . . . . 25
Section 5.12 Notices to Clearing Agency . . . . . . . . . . . . . . . . . . 26
-i-
<PAGE>
Section 5.13 Definitive Preferred Securities Certificates . . . . . . . . . 26
Section 5.14 Rights of Securityholders. . . . . . . . . . . . . . . . . . . 27
ARTICLE VI Acts of Securityholders; Meetings; Voting . . . . . . . . . . . . . 28
Section 6.1 Limitations on Voting Rights . . . . . . . . . . . . . . . . . 28
Section 6.2 Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.3 Meetings of Preferred Securityholders. . . . . . . . . . . . . 29
Section 6.4 Voting Rights. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.5 Proxies, etc.. . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 6.6 Securityholder Action by Written Consent . . . . . . . . . . . 30
Section 6.7 Record Date for Voting and Other Purposes. . . . . . . . . . . 30
Section 6.8 Acts of Securityholders. . . . . . . . . . . . . . . . . . . . 30
Section 6.9 Inspection of Records. . . . . . . . . . . . . . . . . . . . . 31
ARTICLE VII Representations and Warranties. . . . . . . . . . . . . . . . . . . 32
Section 7.1 Representations and Warranties of the Bank, the Property
Trustee and the Delaware Trustee . . . . . . . . . . . . . . . 32
Section 7.2 Representations and Warranties of Depositor. . . . . . . . . . 33
ARTICLE VIII The Trustees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 8.1 Certain Duties and Responsibilities. . . . . . . . . . . . . . 33
Section 8.2 Certain Notices. . . . . . . . . . . . . . . . . . . . . . . . 35
Section 8.3 Certain Rights of Property Trustee . . . . . . . . . . . . . . 35
Section 8.4 Not Responsible for Recitals or Issuance of Securities . . . . 37
Section 8.5 May Hold Securities. . . . . . . . . . . . . . . . . . . . . . 38
Section 8.6 Compensation; Indemnity; Fees. . . . . . . . . . . . . . . . . 38
Section 8.7 Corporate Property Trustee Required; Eligibility of
Trustees . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 8.8 Conflicting Interests. . . . . . . . . . . . . . . . . . . . . 39
Section 8.9 Co-Trustees and Separate Trustee . . . . . . . . . . . . . . . 39
Section 8.10 Resignation and Removal; Appointment of Successor. . . . . . . 41
Section 8.11 Acceptance of Appointment by Successor.. . . . . . . . . . . . 42
Section 8.12 Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Section 8.13 Preferential Collection of Claims Against Depositor or
Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 8.14 Reports by Property Trustee. . . . . . . . . . . . . . . . . . 44
Section 8.15 Reports to the Property Trustee. . . . . . . . . . . . . . . . 44
Section 8.16 Evidence of Compliance with Conditions Precedent . . . . . . . 45
Section 8.17 Number of Trustees.. . . . . . . . . . . . . . . . . . . . . . 45
Section 8.18 Delegation of Power. . . . . . . . . . . . . . . . . . . . . . 45
ARTICLE IX Termination, Liquidation and Merger . . . . . . . . . . . . . . . . 46
Section 9.1 Termination Upon Expiration Date . . . . . . . . . . . . . . . 46
Section 9.2 Early Termination. . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.3 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 9.4 Liquidation. . . . . . . . . . . . . . . . . . . . . . . . . . 47
-ii-
<PAGE>
Section 9.5 Mergers, Consolidations, Amalgamations or Replacements
of the Trust . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE X Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . 49
Section 10.1 Limitation of Rights of Securityholders . . . . . . . . . . 49
Section 10.2 Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 49
Section 10.3 Separability . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.4 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.5 Payments Due on Non-Business Day . . . . . . . . . . . . . . 51
Section 10.6 Successors . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.7 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 10.8 Reports, Notices and Demands . . . . . . . . . . . . . . . . 51
Section 10.9 Agreement Not to Petition. . . . . . . . . . . . . . . . . . 52
Section 10.10 Trust Indenture Act; Conflict with Trust Indenture Act . . . 52
Section 10.11 Acceptance of Terms of Trust Agreement, Guarantee and
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 53
</TABLE>
-iii-
<PAGE>
LINCOLN NATIONAL CAPITAL III
CERTAIN SECTIONS OF THIS TRUST AGREEMENT RELATING TO
SECTIONS 310 THROUGH 318 OF THE TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE TRUST
ACT SECTION AGREEMENT SECTION
- ----------- -----------------
Section 310 (a)(1) . . . . . . . . . . . . . . . . . . . 8.7
(a)(2) . . . . . . . . . . . . . . . . . . . 8.7
(a)(3) . . . . . . . . . . . . . . . . . . . 8.9
(a)(4) . . . . . . . . . . . . . . . . 2.7(a)(ii)
(b) . . . . . . . . . . . . . . . . . . . . 8.8
Section 311 (a) . . . . . . . . . . . . . . . . . . . . 8.13
(b) . . . . . . . . . . . . . . . . . . . . 8.13
Section 312 (a) . . . . . . . . . . . . . . . . . . . . 5.7
(b) . . . . . . . . . . . . . . . . . . . . 5.7
(c) . . . . . . . . . . . . . . . . . . . . 5.7
Section 313 (a) . . . . . . . . . . . . . . . . . . . 8.14(a)
(a)(4) . . . . . . . . . . . . . . . . . . 8.14(b)
(b) . . . . . . . . . . . . . . . . . . . 8.14(b)
(c) . . . . . . . . . . . . . . . . . . . . 10.8
(d) . . . . . . . . . . . . . . . . . . . 8.14(c)
Section 314 (a) . . . . . . . . . . . . . . . . . . . . 8.15
(b) . . . . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . . . . . . . . 8.16
(c)(2) . . . . . . . . . . . . . . . . . . . 8.16
(c)(3) . . . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . . . . . . . 1.1, 8.16
Section 315 (a) . . . . . . . . . . . . . . . 8.1(a), 8.3(a)
(b) . . . . . . . . . . . . . . . . . . 8.2, 10.8
(c) . . . . . . . . . . . . . . . . . . . 8.1(a)
(d) . . . . . . . . . . . . . . . . . . 8.1, 8.3
(e) . . . . . . . . . . . . . . . Not Applicable
Section 316 (a) . . . . . . . . . . . . . . . Not Applicable
(a)(1)(A). . . . . . . . . . . . . Not Applicable
(a)(1)(B). . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . Not Applicable
(c) . . . . . . . . . . . . . . . . . . . . 6.7
Section 317 (a)(1) . . . . . . . . . . . . . . Not Applicable
(a)(2) . . . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . . . . . . . . . 5.9
Section 318 (a) . . . . . . . . . . . . . . . . . . . . 10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be
deemed to be a part of the Trust Agreement.
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<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT, dated as of July 24, 1998, among
(i) Lincoln National Corporation, an Indiana corporation (including any
successors or assigns, the "Depositor"), (ii) The First National Bank of
Chicago, a national banking association, as property trustee, the "Property
Trustee," (iii) First Chicago Delaware, Inc., as Delaware trustee (in such
capacity, "Delaware Trustee," and, in its separate corporate capacity and not
in its capacity as Property Trustee or Delaware Trustee, the "Bank"), (iv)
Janet Whitney-Chrzan, an individual, and Richard C. Vaughan, an individual,
each of whose address is c/o Lincoln National Corporation, 200 East Berry
Street, Fort Wayne, Indiana 46802-2706 (each an "Administrative Trustee" and
collectively the "Administrative Trustees") (the Property Trustee, the
Delaware Trustee and the Administrative Trustees referred to collectively as
the "Trustees") and (iv) the several Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor and certain of the Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by the entering into that certain Trust Agreement, dated as of May
20, 1996 (the "Original Trust Agreement"), and by the execution and filing
with the Secretary of State of the State of Delaware of the Certificate of
Trust, filed on May 20, 1996, attached as Exhibit A; and
WHEREAS, the Depositor and the Trustees desire to amend and restate the
Original Trust Agreement in its entirety as set forth herein to provide for,
among other things, (i) the issuance of the Common Securities by the Trust to
the Depositor, (ii) the issuance and sale of the Preferred Securities by the
Trust pursuant to the Underwriting Agreement, (iii) the acquisition by the
Trust from the Depositor of all of the right, title and interest in the
Debentures and (iv) the appointment of the Administrative Trustees;
NOW THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency
of which is hereby acknowledged, each party, for the benefit of the other
parties and for the benefit of the Securityholders, hereby amends and
restates the Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I
DEFINED TERMS
SECTION 1.1 DEFINITIONS.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
<PAGE>
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to
them therein;
(c) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may
be, of this Trust Agreement; and
(d) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest
(as defined in the Indenture) paid by the Depositor on a Like Amount of
Debentures for such period.
"Additional Sums" has the meaning specified in Section 10.7 of the
Indenture.
"Administrative Trustee" means each of Janet Whitney-Chrzan, and Richard
C. Vaughan, solely in such Person's capacity as Administrative Trustee of the
Trust formed and continued hereunder and not in such Person's individual
capacity, or such Administrative Trustee's successor in interest in such
capacity, or any successor trustee appointed as herein provided.
"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.
"Bank" has the meaning specified in the preamble to this Trust
Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication
or composition of or in respect of such Person 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 such Person 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 60
consecutive days; or
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<PAGE>
(b) the institution by such Person 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 similar
official) of such Person or of any substantial part of its property, or the
making by it of an assignment for the benefit of creditors, or the admission
by it in writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by such Person in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in Section 10.9.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such committee of the Board
of Directors or officers of the Company to which authority to act on behalf
of the Board of Directors has been delegated, and to be in full force and
effect on the date of such certification, and delivered to the Trustees.
"Book-Entry Preferred Securities Certificates" means a beneficial
interest in the Preferred Securities Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as described in
Section 5.11.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which
the Property Trustee's Corporate Trust Office or the Corporate Trust Office
of the Debenture Trustee is closed for business.
"Certificate Depository Agreement" means the agreement among the Trust,
the Depositor and The Depository Trust Company, as the initial Clearing
Agency, dated as of the Closing Date, relating to the Trust Securities
Certificates, substantially in the form attached as Exhibit B, as the same
may be amended and supplemented from time to time.
"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. The Depository Trust Company will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" means the First Time of Delivery as defined in the
Underwriting Agreement, which date is also the date of execution and delivery
of this Trust Agreement.
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<PAGE>
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Security" means an undivided beneficial interest in the assets
of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing ownership
of Common Securities, substantially in the form attached as Exhibit C.
"Corporate Trust Office" means the principal office of the Property
Trustee located in Chicago, Illinois.
"Debenture Event of Default" means an "Event of Default" as defined in
the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption under the
Indenture.
"Debenture Tax Event" means a "Tax Event" as defined in the Indenture.
"Debenture Trustee" means The First National Bank of Chicago, a national
banking association organized and any successor thereto.
"Debentures" means the aggregate principal amount of the Depositor's
7.40% Junior Subordinated Deferrable Interest Debentures, Series C, issued
pursuant to the Indenture.
"Definitive Preferred Securities Certificates" means either or both (as
the context requires) of (a) Preferred Securities Certificates issued as
Book-Entry Preferred Securities Certificate as provided in Section 5.11(a)
and (b) Preferred Securities Certificates issued in certificated, fully
registered form as provided in Section 5.13.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. C. Section 3801, et seq., as it may be amended from
time to time.
"Delaware Trustee" means the corporation identified as the "Delaware
Trustee" in the preamble to this Trust Agreement solely in its capacity as
Delaware Trustee of the Trust
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<PAGE>
formed and continued hereunder and not in its individual capacity, or its
successor in interest in such capacity, or any successor trustee appointed as
herein provided.
"Depositor" has the meaning specified in the preamble to this Trust
Agreement.
"Distribution Date" has the meaning specified in Section 4.1(a).
"Distributions" means amounts payable in respect of the Trust Securities
as provided in Section 4.1.
"Event of Default" means any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Property Trustee in the payment of any Distribution
when it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Property Trustee in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Trustees in this Trust Agreement (other than
a covenant or warranty a default in the performance or breach of which is
dealt with in clause (b) or (c) above) and continuation of such default or
breach for a period of 60 days after there has been given, by registered or
certified mail, to the defaulting Trustee or Trustees by the Holders of at
least 25% in aggregate liquidation preference of the Outstanding Preferred
Securities a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee and the failure by the Depositor to appoint a successor Property
Trustee within 60 days thereof.
"Expense Agreement" means the Agreement as to Expenses and Liabilities
between the Depositor and the Trust, substantially in the form attached as
Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in Section 9.1.
"First Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Grantor Trust Event" has the meaning specified in Section 9.2(b).
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<PAGE>
"Guarantee" means the Guarantee Agreement executed and delivered by the
Depositor and The First National Bank of Chicago, as trustee,
contemporaneously with the execution and delivery of this Trust Agreement,
for the benefit of the holders of the Preferred Securities, as amended from
time to time.
"Indenture" means the Junior Subordinated Indenture, dated as of May 1,
1996, between the Depositor and the Debenture Trustee, as trustee, as amended
or supplemented from time to time.
"Investment Company Event" means the receipt by the Trust of an Opinion
of Counsel, rendered by a law firm having a recognized national tax and
securities practice, 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"), to the effect that the
Trust is or will be considered an "investment company" that is required to be
registered under the 1940 Act, which Change in 1940 Act Law becomes effective
on or after the date of original issuance of the Preferred Securities under
this Trust Agreement.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to the
principal amount of Debentures to be contemporaneously redeemed in accordance
with the Indenture the proceeds of which will be used to pay the Redemption
Price of such Trust Securities, and (b) with respect to a distribution of
Debentures to Holders of Trust Securities in connection with a dissolution or
liquidation of the Trust, Debentures having a principal amount equal to the
Liquidation Amount of the Trust Securities of the Holder to whom such
Debentures are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Liquidation Date" means the date on which Debentures are to be
distributed to Holders of Trust Securities in connection with a termination
and liquidation of the Trust pursuant to Section 9.4(a).
"Liquidation Distribution" has the meaning specified in Section 9.4(d).
"1940 Act" means the Investment Company Act of 1940, as amended.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President or a Vice President, and by the Treasurer,
an Associate Treasurer, an Assistant Treasurer, the Controller, the Secretary
or an Assistant Secretary, of the Depositor,
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<PAGE>
and delivered to the appropriate Trustee. One of the officers signing an
Officers' Certificate given pursuant to Section 8.16 shall be the principal
executive, financial or accounting officer of the Depositor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and who shall be reasonably acceptable to the
Property Trustee.
"Original Trust Agreement" has the meaning specified in the recitals to
this Trust Agreement.
"Outstanding", when used with respect to Preferred Securities, means, as
of the date of determination, all Preferred Securities theretofore executed
and delivered under this Trust Agreement, except:
(a) Preferred Securities theretofore cancelled by the Property Trustee
or delivered to the Property Trustee for cancellation;
(b) Preferred Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property Trustee or
any Paying Agent for the Holders of such Preferred Securities; provided that,
if such Preferred Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Trust Agreement; and
(c) Preferred Securities which have been paid or in exchange for or in
lieu of which other Preferred Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Preferred Securities have given any
request, demand,
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<PAGE>
authorization, direction, notice, consent or waiver hereunder, Preferred
Securities owned by the Depositor, any Trustee or any Affiliate of the
Depositor or any Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Preferred Securities that such Trustee knows
to be so owned shall be so disregarded and (b) the foregoing shall not apply
at any time when all of the outstanding Preferred Securities are owned by the
Depositor, one or more of the Trustees and/or any such Affiliate. Preferred
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Preferred Securities and that the pledgee is not the Depositor or any
Affiliate of the Depositor.
"Owner" means each Person who is the beneficial owner of a Book-Entry
Preferred Securities Certificate as reflected in the records of the Clearing
Agency or, if a Clearing Agency Participant is not the Owner, then as
reflected in the records of a Person maintaining an account with such
Clearing Agency (directly or indirectly, in accordance with the rules of such
Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.9 and shall initially be the Bank.
"Payment Account" means a segregated non-interest-bearing corporate
trust account maintained by the Property Trustee with the Bank in its trust
department for the benefit of the Securityholders in which all amounts paid
in respect of the Debentures will be held and from which the Property Trustee
shall make payments to the Securityholders in accordance with Sections 4.1
and 4.2.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability company or corporation, unincorporated organization
or government or any agency or political subdivision thereof.
"Preferred Security" means an undivided beneficial interest in the
assets of the Trust, having a Liquidation Amount of $25 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution as provided herein.
"Preferred Securities Certificate" means a certificate evidencing
ownership of Preferred Securities, substantially in the form attached as
Exhibit E.
"Property Trustee" means the commercial bank or trust company identified
as the "Property Trustee" in the preamble to this Trust Agreement solely in
its capacity as Property Trustee of the Trust heretofore formed and continued
hereunder and not in its individual capacity, or its successor in interest in
such capacity, or any successor property trustee appointed as herein
provided.
-8-
<PAGE>
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date and the stated
maturity of the Debentures shall be a Redemption Date for a Like Amount of
Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium,
if any, paid by the Depositor upon the concurrent redemption of a Like Amount
of Debentures, allocated on a pro rata basis (based on Liquidation Amounts)
among the Trust Securities.
"Relevant Trustee" shall have the meaning specified in Section 8.10.
"Second Time of Delivery" has the meaning specified in the Underwriting
Agreement.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 5.4.
"Securityholder" or "Holder" means a Person in whose name a Trust
Security or Securities is registered in the Securities Register; any such
Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act.
"Special Event" has the meaning specified in Section 9.2(b).
"Tax Event" means the receipt by the Trust of an Opinion of Counsel
experienced in such matters to the effect that, as a result of any amendment
to, or change (including any announced prospective change) in, the laws (or
any regulations thereunder) of the United States or any political subdivision
or taxing authority thereof or therein, or as a result of any official
administrative pronouncement or judicial decision interpreting or applying
such laws or regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after the date of issuance of
the Preferred Securities under this Trust Agreement, there is more than an
insubstantial risk that (i) the Trust is, or will be within 90 days after the
date of such Opinion of Counsel, subject to United States Federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Depositor on the Debentures is not, or within 90 days after
the date of such Opinion of Counsel, will not be, deductible by the
Depositor, in whole or in part, for United States Federal income tax purposes
or (iii) the Trust is, or will be within 90 days after the date of such
Opinion of Counsel, subject to more than a de minimis amount of other taxes,
duties, assessments or other governmental charges.
"Time of Delivery" means, collectively, the First Time of Delivery and
the Second Time of Delivery.
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"Trust" means the Delaware business trust continued hereby and
identified on the cover page to this Trust Agreement.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including all exhibits hereto, including, for
all purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment
or supplement, respectively.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that
in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trust Property" means (a) the Debentures, (b) the rights of the
Property Trustee under the Guarantee, (c) any cash on deposit in, or owing
to, the Payment Account and (d) all proceeds and rights in respect of the
foregoing and any other property and assets for the time being held or deemed
to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common Securities or the Preferred
Securities.
"Trust Securities Certificate" means any one of the Common Securities
Certificates or the Preferred Securities Certificates.
"Trustees" means, collectively, the Property Trustee, the Delaware
Trustee and the Administrative Trustees.
"Underwriting Agreement" means the Terms Agreement, dated as of July 17,
1998, among the Trust, the Depositor and the Underwriters named therein
incorporating the Underwriting Agreement Standard Provisions of the Trust.
ARTICLE II
ESTABLISHMENT OF THE TRUST
SECTION 2.1 NAME.
The Trust continued hereby shall be known as "Lincoln National Capital
III," as such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders of Trust Securities and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the
Trust and sue and be sued.
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SECTION 2.2 OFFICE OF THE DELAWARE TRUSTEE; PRINCIPAL PLACE OF BUSINESS.
The address of the Delaware Trustee in the State of Delaware is 300 King
Street, Wilmington, Delaware 19801, or such other address in the State of
Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the
Trust is c/o Lincoln National Corporation, 200 East Berry Street, Fort Wayne,
Indiana 46802-2706.
SECTION 2.3 INITIAL CONTRIBUTION OF TRUST PROPERTY; ORGANIZATIONAL EXPENSES.
The Trustees acknowledge receipt in trust from the Depositor in
connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay
organizational expenses of the Trust as they arise or shall, upon request of
any Trustee, promptly reimburse such Trustee for any such expenses paid by
such Trustee. The Depositor shall make no claim upon the Trust Property for
the payment of such expenses.
SECTION 2.4 ISSUANCE OF THE PREFERRED SECURITIES.
On July 17, 1998, the Depositor, on behalf of the Trust and pursuant to
the Original Trust Agreement, executed and delivered the Underwriting
Agreement. Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute
in accordance with Section 5.2 and deliver to the Underwriters named in the
Underwriting Agreement Preferred Securities Certificates, registered in the
name of the nominee of the initial Clearing Agency, in an aggregate amount of
8,000,000 Preferred Securities having an aggregate Liquidation Amount of
$200,000,000, against receipt of such aggregate purchase price of such
Preferred Securities of $206,186,000, which amount the Administrative Trustee
shall promptly deliver to the Property Trustee.
SECTION 2.5 ISSUANCE OF THE COMMON SECURITIES; SUBSCRIPTION AND PURCHASE OF
DEBENTURES.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Trust, shall execute
in accordance with Section 502 and deliver to the Depositor Common Securities
Certificates, registered in the name of the Depositor, in an aggregate amount
of 247,440 Common Securities having an aggregate Liquidation Amount of
$6,186,000 against payment by the Depositor of such amount. Contemporaneously
therewith, an Administrative Trustee, on behalf of the Trust, shall subscribe
to and purchase from the Depositor Debentures, registered in the name of the
Trust and having an aggregate principal amount equal to $6,186,000, and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the sum of $6,186,000.
Contemporaneously therewith, an
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Administrative Trustee, on behalf of the Trust, shall subscribe to and
purchase from the Depositor Debentures, registered in the name of the Trust
and having an aggregate principal amount of up to $6,186,000, and, in
satisfaction of the purchase price for such Debentures, the Property Trustee,
on behalf of the Trust, shall deliver to the Depositor the amount received
from one of the Administrative Trustees pursuant to the last sentence of
Section 2.4.
SECTION 2.6 DECLARATION OF TRUST.
The exclusive purposes and functions of the Trust are (a) to issue and
sell Trust Securities and use the proceeds from such sale to acquire the
Debentures, and (b) to engage in those activities necessary, convenient or
incidental thereto. The Depositor hereby appoints the Trustees as trustees
of the Trust, to have all the rights, powers and duties to the extent set
forth herein, and the Trustees hereby accept such appointment. The Property
Trustee hereby declares that it will hold the Trust Property upon and subject
to the conditions set forth herein for the benefit of the Securityholders.
The Administrative Trustees shall have all rights, powers and duties set
forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. The Delaware Trustee shall not be
entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities, of the Trustees set forth herein except as
required by the Delaware Business Trust Act. The Delaware Trustee shall be
one of the Trustees of the Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807(a) of the Delaware Business Trust
Act.
SECTION 2.7 AUTHORIZATION TO ENTER INTO CERTAIN TRANSACTIONS.
(a) The Trustees shall conduct the affairs of the Trust in accordance
with the terms of this Trust Agreement. Subject to the limitations set forth
in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Administrative Trustees shall have the authority
to enter into all transactions and agreements determined by the Trustees to
be appropriate in exercising the authority, express or implied, otherwise
granted to the Trustees under this Trust Agreement, and to perform all acts
in furtherance thereof, including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall have the
power and authority to act on behalf of the Trust with respect to the
following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute, deliver
and perform on behalf of the Trust, the Expense Agreement and the
Certificate Depository Agreement and such other agreements as may be
necessary or desirable in connection with the purposes and function of
the Trust;
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(C) assisting in the registration of the Preferred Securities
under the Securities Act of 1933, as amended, and under state
securities or blue sky laws, and the qualification of this Trust
Agreement as a trust indenture under the Trust Indenture Act;
(D) assisting in the listing of the Preferred Securities upon
such securities exchange or exchanges as shall be determined by the
Depositor and the registration of the Preferred Securities under the
Securities Exchange Act of 1934, as amended, and the preparation and
filing of all periodic and other reports and other documents pursuant
to the foregoing;
(E) the sending of notices (other than notices of default) and
other information regarding the Trust Securities and the Debentures to
the Securityholders in accordance with this Trust Agreement;
(F) the appointment of a Paying Agent, authenticating agent and
Securities Registrar in accordance with this Trust Agreement;
(G) registering transfer of the Trust Securities in accordance
with this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) unless otherwise determined by the Depositor, the Property
Trustee or the Administrative Trustees, or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act, to execute
on behalf of the Trust (either acting alone or together with any or
all of the Administrative Trustees) any documents that the
Administrative Trustees have the power to execute pursuant to this
Trust Agreement; and
(J) the taking of any action incidental to the foregoing as the
Trustees may from time to time determine is necessary or advisable to
give effect to the terms of this Trust Agreement for the benefit of
the Securityholders (without consideration of the effect of any such
action on any particular Securityholder).
(ii) As among the Trustees, the Property Trustee shall have the power,
duty and authority to act on behalf of the Trust with respect to the
following matters:
(A) the establishment of the Payment Account;
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(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other payments
made in respect of the Debentures in the Payment Account;
(D) the distribution of amounts owed to the Securityholders in
respect of the Trust Securities;
(E) the exercise of all of the rights, powers and privileges of
a holder of the Debentures;
(F) the sending of notices of default and other information
regarding the Trust Securities and the Debentures to the
Securityholders in accordance with this Trust Agreement;
(G) the distribution of the Trust Property in accordance with
the terms of this Trust Agreement;
(H) to the extent provided in this Trust Agreement, the winding
up of the affairs of and liquidation of the Trust and the preparation,
execution and filing of the certificate of cancellation with the
Secretary of State of the State of Delaware;
(I) after an Event of Default the taking of any action
incidental to the foregoing as the Property Trustee may from time to
time determine is necessary or advisable to give effect to the terms
of this Trust Agreement and protect and conserve the Trust Property
for the benefit of the Securityholders (without consideration of the
effect of any such action on any particular Securityholder);
(J) registering transfers of the Trust Securities in accordance
with this Trust Agreement; and
(K) except as otherwise provided in this Section 2.7(a)(ii), the
Property Trustee shall have none of the duties, liabilities, powers or
the authority of the Administrative Trustees set forth in Section
2.7(a)(i).
(b) So long as this Trust Agreement remains in effect, the Trust (or the
Trustees acting on behalf of the Trust) shall not undertake any business,
activities or transaction except as expressly provided herein or contemplated
hereby. In particular, the Trustees shall not cause the Trust to (i) acquire
any investments or engage in any activities not authorized by this Trust
Agreement, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein, (iii) take any action
that would cause
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the Trust to fail or cease to qualify as a "grantor trust" for United States
Federal income tax purposes, (iv) incur any indebtedness for borrowed money
or issue any other debt or (v) take or consent to any action that would
result in the placement of a Lien on any of the Trust Property. The
Administrative Trustees shall defend all claims and demands of all Persons at
any time claiming any Lien on any of the Trust Property adverse to the
interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issue and sale of the Preferred Securities,
the Depositor shall have the right and responsibility to assist the Trust
with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the
date of this Trust Agreement are hereby ratified and confirmed in all
respects):
(i) the preparation and filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on the
appropriate form in relation to the Preferred Securities, including any
amendments thereto;
(ii) the determination of the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred
Securities and the determination of any and all such acts, other than
actions which must be taken by or on behalf of the Trust, and the advice to
the Trustees of actions they must take on behalf of the Trust, and the
preparation for execution and filing of any documents to be executed and
filed by the Trust or on behalf of the Trust, as the Depositor deems
necessary or advisable in order to comply with the applicable laws of any
such States;
(iii) the preparation for filing by the Trust and execution on
behalf of the Trust of an application to the New York Stock Exchange or any
other national stock exchange or the Nasdaq National Market for listing
upon notice of issuance of any Preferred Securities;
(iv) the preparation for filing by the Trust with the Commission and
the execution on behalf of the Trust of a registration statement on Form
8-A relating to the registration of the Preferred Securities under Section
12(b) or 12(g) of the Exchange Act, including any amendments thereto;
(v) the negotiation of the terms of, and the execution and delivery
of, the Underwriting Agreement providing for the sale of the Preferred
Securities; and
(vi) the taking of any other actions necessary or desirable to carry
out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administrative
Trustees are authorized and directed to conduct the affairs of the Trust and to
operate the Trust so that the Trust will not be deemed to be an "investment
company" required to be registered under
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the Investment Company Act of 1940, as amended, or taxed as a corporation for
United States Federal income tax purposes and so that the Debentures will be
treated as indebtedness of the Depositor for United States Federal income tax
purposes. In this connection, the Depositor and the Administrative Trustees
are authorized to take any action, not inconsistent with applicable law, the
Certificate of Trust or this Trust Agreement, that each of the Depositor and
the Administrative Trustees determines in their discretion to be necessary or
desirable for such purposes, as long as such action does not adversely affect
in any material respect the interests of the holders of the Preferred
Securities.
SECTION 2.8 ASSETS OF TRUST.
The assets of the Trust shall consist of the Trust Property.
SECTION 2.9 TITLE TO TRUST PROPERTY.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee for the benefit of the Trust and the Securityholders in
accordance with this Trust Agreement.
ARTICLE III
PAYMENT ACCOUNT
SECTION 3.1 PAYMENT ACCOUNT.
(a) On or prior to the Closing Date, the Property Trustee shall establish
the Payment Account. The Property Trustee and any agent of the Property Trustee
shall have exclusive control and sole right of withdrawal with respect to the
Payment Account for the purpose of making deposits in and withdrawals from the
Payment Account in accordance with this Trust Agreement. All monies and other
property deposited or held from time to time in the Payment Account shall be
held by the Property Trustee in the Payment Account for the exclusive benefit of
the Securityholders and for distribution as herein provided, including (and
subject to) any priority of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
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ARTICLE IV
DISTRIBUTIONS; REDEMPTION
SECTION 4.1 DISTRIBUTIONS.
(a) Distributions on the Trust Securities shall be cumulative, and will
accumulate whether or not there are funds of the Trust available for the
payment of Distributions. Distributions shall accrue from July 24, 1998,
and, except in the event that the Depositor exercises its right to defer the
payment of interest on the Debentures pursuant to the Indenture, shall be
payable quarterly in arrears on March 31, June 30, September 30 and December
31 of each year, commencing on September 30, 1998. If any date on which a
Distribution is otherwise payable on the Trust Securities is not a Business
Day, then the payment of such Distribution shall be made on the next
succeeding day that is a Business Day (and without any 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 Distribution shall be made
on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which distributions are
payable in accordance with this Section 4.1(a), a "Distribution Date").
(b) The Trust Securities represent undivided beneficial interests in
the Trust Property, and, as a practical matter, the Distributions on the
Trust Securities shall be payable at a rate of 7.40% per annum of the
Liquidation Amount of the Trust Securities. The amount of Distributions
payable for any full period shall be computed on the basis of a 360-day year
of twelve 30-day months. The amount of Distributions for any partial period
shall be computed on the basis of the number of days elapsed in a 360-day
year of twelve 30-day months. The amount of Distributions payable for any
period shall include the Additional Amounts, if any.
(c) Distributions on the Trust Securities shall be made by the Property
Trustee from the Payment Account and shall be payable on each Distribution
Date only to the extent that the Trust has funds then on hand and available
in the Payment Account for the payment of such Distributions.
(d) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on
the Securities Register for the Trust Securities on the relevant record date,
which shall be one Business Day prior to such Distribution Date; provided,
however, that in the event that the Preferred Securities do not remain in
book-entry-only form, the relevant record date shall be the date 15 days
prior to the relevant Distribution Date.
SECTION 4.2 REDEMPTION.
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(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date to each Holder of Trust Securities to be
redeemed, at such Holder's address appearing in the Security Register. All
notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) if less than all the Outstanding Trust Securities are to be
redeemed, the identification and the total Liquidation Amount of the
particular Trust Securities to be redeemed; and
(v) that on the Redemption Date the Redemption Price will become due
and payable upon each such Trust Security to be redeemed and that
distributions thereon will cease to accrue on and after said date.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date only to the
extent that the Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Preferred Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, so
long as the Preferred Securities are in book-entry-only form, irrevocably
deposit with the Clearing Agency for the Preferred Securities funds
sufficient to pay the applicable Redemption Price and will give such Clearing
Agency irrevocable instructions and authority to pay the Redemption Price to
the holders thereof. If the Preferred Securities are no longer in
book-entry-only form, the Property Trustee, subject to Section 4.2(c), will
irrevocably deposit with the Paying Agent funds sufficient to pay the
applicable Redemption Price and will give the Paying Agent irrevocable
instructions and authority to pay the Redemption Price to the Holders thereof
upon surrender of their Preferred Securities Certificates. Notwithstanding
the foregoing, Distributions payable on or prior to the Redemption Date for
any Trust Securities called for redemption shall be payable to the Holders of
such Trust Securities as they appear on the Register for the Trust Securities
on the relevant record dates for the related Distribution Dates. If notice
of redemption shall have been given and funds deposited as required, then
upon the date of such
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deposit, all rights of Securityholders holding Trust Securities so called for
redemption will cease, except the right of such Securityholders to receive
the Redemption Price and any Distribution payable on or prior to the
Redemption Date, but without interest, and such Securities will cease to be
outstanding. In the event that any date on which any Redemption Price is
payable is not a Business Day, then payment of the Redemption Price payable
on such date will be made on the next succeeding day that is a Business Day
(and without any interest or other payment in respect of any such delay),
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. In the event that
payment of the Redemption Price in respect of any Trust Securities called for
redemption is improperly withheld or refused and not paid either by the Trust
or by the Depositor pursuant to the Guarantee, Distributions on such Trust
Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities
to the date such Redemption Price is actually paid, in which case the actual
payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
(e) Payment of the Redemption Price on the Trust Securities shall be
made to the recordholders thereof as they appear on the Securities Register
for the Trust Securities on the relevant record date, which shall be one
Business Day prior to the relevant Redemption Date; provided, however, that
in the event that the Preferred Securities do not remain in book-entry-only
form, the relevant record date shall be the date fifteen days prior to the
relevant Redemption Date.
(f) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated on a
pro rata basis (based on Liquidation Amounts) among the Common Securities and
the Preferred Securities. The particular Preferred Securities to be redeemed
shall be selected on a pro rata basis (based upon Liquidation Amounts) not
more than 60 days prior to the Redemption Date by the Property Trustee from
the Outstanding Preferred Securities not previously called for redemption, by
such method (including, without limitation, by lot) as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25 or an integral multiple of $25 in excess
thereof) of the Liquidation Amount of Preferred Securities of a denomination
larger than $25. The Property Trustee shall promptly notify the Security
Registrar in writing of the Preferred Securities selected for redemption and,
in the case of any Preferred Securities selected for partial redemption, the
Liquidation Amount thereof to be redeemed. For all purposes of this Trust
Agreement, unless the context otherwise requires, all provisions relating to
the redemption of Preferred Securities shall relate, in the case of any
Preferred Securities redeemed or to be redeemed only in part, to the portion
of the Liquidation Amount of Preferred Securities that has been or is to be
redeemed.
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SECTION 4.3 SUBORDINATION OF COMMON SECURITIES.
(a) Payment of Distributions (including Additional Amounts, if
applicable) on, and the Redemption Price of, the Trust Securities, as
applicable, shall be made, subject to Section 4.2(f), pro rata among the
Common Securities and the Preferred Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Event of Default resulting from a
Debenture Event of Default shall have occurred and be continuing, no payment
of any Distribution (including Additional Amounts, if applicable) on, or
Redemption Price of, any Common Security, and no other payment on account of
the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including Additional Amounts, if applicable) on all
Outstanding Preferred Securities for all Distribution periods terminating on
or prior thereto, or in the case of payment of the Redemption Price the full
amount of such Redemption Price on all Outstanding Preferred Securities,
shall have been made or provided for, and all funds immediately available to
the Property Trustee shall first be applied to the payment in full in cash of
all Distributions (including Additional Amounts, if applicable) on, or the
Redemption Price of, Preferred Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holder of Common Securities will be
deemed to have waived any right to act with respect to any such Event of
Default under this Trust Agreement until the effect of all such Events of
Default with respect to the Preferred Securities have been cured, waived or
otherwise eliminated. Until any such Event of Default under this Trust
Agreement with respect to the Preferred Securities has been so cured, waived
or otherwise eliminated, the Property Trustee shall act solely on behalf of
the Holders of the Preferred Securities and not the Holder of the Common
Securities, and only the Holders of the Preferred Securities will have the
right to direct the Property Trustee to act on their behalf.
Section 4.4 PAYMENT PROCEDURES.
Payments of Distributions (including Additional Amounts, if applicable)
in respect of the Preferred Securities shall be made by check mailed to the
address of the Person entitled thereto as such address shall appear on the
Securities Register or, if the Preferred Securities are held by a Clearing
Agency, such Distributions shall be made to the Clearing Agency in
immediately available funds, which shall credit the relevant Persons'
accounts at such Clearing Agency on the applicable distribution dates.
Payments in respect of the Common Securities shall be made in such manner as
shall be mutually agreed between the Property Trustee and the Common
Securityholder.
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SECTION 4.5 TAX RETURNS AND REPORTS.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local
tax and information returns and reports required to be filed by or in respect
of the Trust. In this regard, the Administrative Trustees shall (a) prepare
and file (or cause to be prepared and filed) the appropriate Internal Revenue
Service Form required to be filed in respect of the Trust in each taxable
year of the Trust and (b) prepare and furnish (or cause to be prepared and
furnished) to each Securityholder the appropriate Internal Revenue Service
form required to be provided on such form. The Administrative Trustees shall
provide the Depositor and the Property Trustee with a copy of all such
returns and reports promptly after such filing or furnishing. The Trustees
shall comply with United States Federal withholding and backup withholding
tax laws and information reporting requirements with respect to any payments
to Securityholders under the Trust Securities.
SECTION 4.6 PAYMENT OF TAXES, DUTIES, ETC. OF THE TRUST.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Trust by the
United States or any other taxing authority.
SECTION 4.7 PAYMENTS UNDER INDENTURE.
Any amount payable hereunder to any Holder of Preferred Securities (and
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (and Owner) has directly received pursuant
to Section 5.8 of the Indenture.
ARTICLE V
TRUST SECURITIES CERTIFICATES
SECTION 5.1 INITIAL OWNERSHIP.
Upon the formation of the Trust and the contribution by the Depositor
pursuant to Section 2.3 and until the issuance of the Trust Securities, and
at any time during which no Trust Securities are outstanding, the Depositor
shall be the sole beneficial owner of the Trust.
SECTION 5.2 THE TRUST SECURITIES CERTIFICATES.
The Preferred Securities Certificates shall be issued in minimum
denominations of $25 Liquidation Amount and integral multiples of $25 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $25 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of
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the Trust by manual signature of at least one Administrative Trustee. Trust
Securities Certificates bearing the manual signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefits of this Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the delivery of
such Trust Securities Certificates or did not hold such offices at the date
of delivery of such Trust Securities Certificates. A transferee of a Trust
Securities Certificate shall become a Securityholder, and shall be entitled
to the rights and subject to the obligations of a Securityholder hereunder,
upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.4, 5.11 and 5.13.
SECTION 5.3 EXECUTION AND DELIVERY OF TRUST SECURITIES CERTIFICATES.
At each Time of Delivery, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Trust and delivered to
or upon the written order of the Depositor, signed by its chairman of the
board, its president, any executive vice president or any vice president,
treasurer or assistant treasurer or controller without further corporate
action by the Depositor, in authorized denominations.
SECTION 5.4 REGISTRATION OF TRANSFER AND EXCHANGE OF PREFERRED SECURITIES
CERTIFICATES.
The Depositor shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 5.8, a register or registers for the purpose
of registering Trust Securities Certificates and transfers and exchanges of
Preferred Securities Certificates (the "Securities Register") in which, the
registrar designated by the Depositor (the "Securities Registrar"), subject
to such reasonable regulations as it may prescribe, shall provide for the
registration of Preferred Securities Certificates and Common Securities
Certificates (subject to Section 5.10 in the case of the Common Securities
Certificates) and registration of transfers and exchanges of Preferred
Securities Certificates as herein provided. The Bank shall be the initial
Securities Registrar.
Upon surrender for registration of transfer of any Preferred Securities
Certificate at the office or agency maintained pursuant to Section 5.8, the
Administrative Trustees or any one of them shall execute and deliver, in the
name of the designated transferee or transferees, one or more new Preferred
Securities Certificates in authorized denominations of a like aggregate
Liquidation Amount dated the date of execution by such Administrative Trustee
or Trustees.
The Securities Registrar shall not be required to register the transfer of
any Preferred Securities that have been called for redemption. At the option of
a Holder, Preferred Securities Certificates may be exchanged for other Preferred
Securities Certificates in authorized denominations of the same class and of a
like aggregate Liquidation Amount upon
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surrender of the Preferred Securities Certificates to be exchanged at the
office or agency maintained pursuant to Section 5.8.
Every Preferred Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Property Trustee and the
Securities Registrar duly executed by the Holder or his attorney duly
authorized in writing. Each Preferred Securities Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Preferred Securities Certificates, but the Securities Registrar
may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of
Preferred Securities Certificates.
SECTION 5.5 MUTILATED, DESTROYED, LOST OR STOLEN TRUST SECURITIES
CERTIFICATES.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may
be required by them to save each of them harmless, then in the absence of
notice that such Trust Securities Certificate shall have been acquired by a
bona fide purchaser, the Administrative Trustees, or any one of them, on
behalf of the Trust shall execute and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Trust Securities Certificate, a new Trust Securities Certificate of like
class, tenor and denomination. In connection with the issuance of any new
Trust Securities Certificate under this Section, the Administrative Trustees
or the Securities Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Trust Securities Certificate issued pursuant to
this Section shall constitute conclusive evidence of an undivided beneficial
interest in the assets of the Trust, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall be found at
any time.
SECTION 5.6 PERSONS DEEMED SECURITYHOLDERS.
The Administrative Trustees or the Securities Registrar shall treat the
Person in whose name any Trust Securities Certificate shall be registered in
the Securities Register as the owner of such Trust Securities Certificate for
the purpose of receiving distributions and for all other purposes whatsoever,
and neither the Trustees nor the Securities Registrar shall be bound by any
notice to the contrary.
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SECTION 5.7 ACCESS TO LIST OF SECURITYHOLDERS' NAMES AND ADDRESSES.
Trust Securities Certificate, and each Owner shall be deemed to have
agreed not to hold the Depositor, the Property Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 5.8 MAINTENANCE OF OFFICE OR AGENCY.
The Administrative Trustees shall maintain in Chicago, Illinois, an
office or offices or agency or agencies where Preferred Securities
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Trustees in respect of the Trust
Securities Certificates may be served. The Administrative Trustees initially
designate The First National Bank of Chicago, One First National Plaza, Suite
0126, Chicago, Illinois 60670-0126; Attention: Corporate Trust Department,
as its principal corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor and
to the Securityholders of any change in the location of the Securities
Register or any such office or agency.
SECTION 5.9 APPOINTMENT OF PAYING AGENT.
The Paying Agent shall make distributions to Securityholders from the
Payment Account and shall report the amounts of such distributions to the
Property Trustee and the Administrative Trustees. Any Paying Agent shall
have the revocable power to withdraw funds from the Payment Account for the
purpose of making the distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent if such Trustees
determine in their sole discretion that the Paying Agent shall have failed to
perform its obligations under this Trust Agreement in any material respect.
The Paying Agent shall initially be the Bank, and any co-paying agent chosen
by the Bank, and acceptable to the Administrative Trustees and the Depositor.
Any Person acting as Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Bank shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act
as Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying
Agent appointed by the Administrative Trustees to execute and deliver to the
Trustees an instrument in which such successor Paying Agent or additional
Paying Agent shall agree with the Trustees that as Paying Agent, such
successor Paying Agent or additional Paying Agent will hold all sums, if any,
held by it for payment to the Securityholders in trust for the benefit of the
Securityholders entitled thereto until such sums shall be paid to such
Securityholders. The Paying Agent shall return all unclaimed funds to the
Property Trustee and upon removal of a Paying Agent such Paying Agent shall
also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, 8.3 and 8.6 herein shall
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apply to the Bank also in its role as Paying Agent, for so long as the Bank
shall act as Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Paying
Agent shall include any co-paying agent unless the context requires otherwise.
SECTION 5.10 OWNERSHIP OF COMMON SECURITIES BY DEPOSITOR.
At each Time of Delivery, the Depositor shall acquire and retain
beneficial and record ownership of the Common Securities. To the fullest
extent permitted by law, other than a transfer in connection with a
consolidation or merger of the Depositor into another corporation, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, any attempted transfer of the Common Securities shall be void.
The Administrative Trustees shall cause each Common Securities Certificate
issued to the Depositor to contain a legend stating "THIS CERTIFICATE IS NOT
TRANSFERABLE".
SECTION 5.11 BOOK-ENTRY PREFERRED SECURITIES CERTIFICATES; COMMON
SECURITIES CERTIFICATE.
(a) The Preferred Securities Certificates, upon original issuance, will
be issued in the form of a typewritten Preferred Securities Certificate or
Certificates representing Book-Entry Preferred Securities Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by,
or on behalf of, the Trust. Such Preferred Securities Certificate or
Certificates shall initially be registered on the Securities Register in the
name of Cede & Co., the nominee of the initial Clearing Agency, and no
beneficial owner will receive a Definitive Preferred Securities Certificate
representing such beneficial owner's interest in such Preferred Securities,
except as provided in Section 5.13. Unless and until Definitive Preferred
Securities Certificates have been issued to beneficial owners pursuant to
Section 5.13:
(i) the provisions of this Section 5.11(a) shall be in full force
and effect;
(ii) the Securities Registrar and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust Agreement
relating to the Book-Entry Preferred Securities Certificates (including the
payment of the Liquidation Amount of and Distributions on the Book-Entry
Preferred Securities and the giving of instructions or directions to Owners
of Book-Entry Preferred Securities) as the sole Holder of Book-Entry
Preferred Securities and shall have no obligations to the Owners thereof;
(iii) to the extent that the provisions of this Section 5.11
conflict with any other provisions of this Trust Agreement, the provisions
of this Section 5.11 shall control; and
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(iv) the rights of the Owners of the Book-Entry Preferred Securities
Certificates shall be exercised only through the Clearing Agency and shall
be limited to those established by law and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants; provided,
that solely for the purposes of determining whether the Holders of the
requisite amount of Preferred Securities have voted on any matter provided
for in this Trust Agreement, so long as Definitive Preferred Security
Certificates have not been issued, the Trustees may conclusively rely on,
and shall be protected in relying on, any written instrument (including a
proxy) delivered to the Trustees by the Clearing Agency setting forth the
Owners' votes or assigning the right to vote on any matter to any other
Persons either in whole or in part. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Preferred Securities Certificates
are issued pursuant to Section 5.13, the initial Clearing Agency will make
book-entry transfers among the Clearing Agency Participants and receive and
transmit payments on the Preferred Securities to such Clearing Agency
Participants.
(b) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.12 NOTICES TO CLEARING AGENCY.
To the extent that a notice or other communication to the Owners is
required under this Trust Agreement, unless and until Definitive Preferred
Securities Certificates shall have been issued to Owners pursuant to Section
5.13, the Trustees shall give all such notices and communications specified
herein to be given to Owners to the Clearing Agency, and shall have no
obligations to the Owners.
SECTION 5.13 DEFINITIVE PREFERRED SECURITIES CERTIFICATES.
If (a) the Depositor advises the Trustees in writing that the Clearing
Agency is no longer willing or able to properly discharge its
responsibilities with respect to the Preferred Securities Certificates, and
the Depositor is unable to locate a qualified successor, (b) the Depositor at
its option advises the Trustees in writing that it elects to terminate the
book-entry system through the Clearing Agency or (c) after the occurrence of
a Debenture Event of Default, Owners of Preferred Securities Certificates
representing beneficial interests aggregating at least a majority of the
Liquidation Amount advise the Property Trustee in writing that the
continuation of a book-entry system through the Clearing Agency is no longer
in the best interest of the Owners of Preferred Securities Certificates, then
the Property Trustee shall notify the Clearing Agency and the Clearing Agency
shall notify all Owners of Preferred Securities Certificates and the other
Trustees of the occurrence of any such event and of the availability of the
Definitive Preferred Securities Certificates to Owners of such class or
classes, as applicable, requesting the same. Upon surrender to the Property
Trustee of the typewritten Preferred Securities Certificate or Certificates
representing the Book Entry Preferred Securities Certificates by the Clearing
Agency, accompanied by
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registration instructions, the Administrative Trustees, or any one of them,
shall execute the Definitive Preferred Securities Certificates in accordance
with the instructions of the Clearing Agency. Neither the Securities
Registrar nor the Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying
on, such instructions. Upon the issuance of Definitive Preferred Securities
Certificates, the Trustees shall recognize the Holders of the Definitive
Preferred Securities Certificates as Securityholders. The Definitive
Preferred Securities Certificates shall be printed, lithographed or engraved
or may be produced in any other manner as is reasonably acceptable to the
Administrative Trustees, as evidenced by the execution thereof by the
Administrative Trustees or any one of them.
SECTION 5.14 RIGHTS OF SECURITYHOLDERS.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9,
and the Securityholders shall not have any right or title therein other than
the undivided beneficial interest in the assets of the Trust conferred by
their Trust Securities and they shall have no right to call for any partition
or division of property, profits or rights of the Trust except as described
below. The Trust Securities shall be personal property giving only the rights
specifically set forth therein and in this Trust Agreement. The Trust
Securities shall have no preemptive or similar rights and when issued and
delivered to Securityholders against payment of the purchase price therefor
will be fully paid and nonassessable by the Trust. The Holders of the Trust
Securities, in their capacities as such, shall be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
(b) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails or the holders
of not less than 25% in principal amount of the outstanding Debentures fail
to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of at least 25% in Liquidation Amount of the Preferred
Securities then Outstanding shall have such right by a notice in writing to
the Depositor and the Debenture Trustee; and upon any such declaration such
principal amount of and the accrued interest on all of the Debentures shall
become immediately due and payable, provided that the payment of principal
and interest on such Debentures shall remain subordinated to the extent
provided in the Indenture.
(c) For so long as any Preferred Securities remain Outstanding, if,
upon a Debenture Event of Default, the Debenture Trustee fails to exercise
directly any remedy available to the Holders of the Debentures for 60 days,
the Holders of at least 25% in Liquidation Amount of the Preferred Securities
then Outstanding shall, to the fullest extent permitted by law, have the
right to directly institute proceedings for enforcement of payment to such
Holders of principal amount of or interest on the Debentures having a
principal amount equal to the Liquidation Amount of the Preferred Securities
of such Holders.
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ARTICLE VI
ACTS OF SECURITYHOLDERS; MEETINGS; VOTING
SECTION 6.1 LIMITATIONS ON VOTING RIGHTS.
(a) Except as provided in this Section, in Sections 5.2, 8.10 and 10.2
and in the Indenture and as otherwise required by law, no Holder of Preferred
Securities shall have any right to vote or in any manner otherwise control
the administration, operation and management of the Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in
the terms of the Trust Securities Certificates, be construed so as to
constitute the Securityholders from time to time as partners or members of an
association.
(b) So long as any Debentures are held by the Property Trustee, the
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 Debenture Trustee with respect to such
Debentures, (ii) waive any past default which is waivable under Section 5.13
of the Indenture, (iii) exercise any right to rescind or annul a declaration
that the principal of all the Debentures shall be due and payable or (iv)
consent to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of at least a majority in
Liquidation Amount of all Outstanding Preferred Securities, provided,
however, that where a consent under the Indenture would require the consent
of each Holder of Debentures affected thereby, no such consent shall be given
by the Property Trustee without the prior written consent of each Holder of
Preferred Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of Preferred Securities,
except by a subsequent vote of the Holders of Preferred Securities. The
Property Trustee shall notify all Holders of the Preferred Securities of any
notice of default received from the Debenture Trustee with respect to the
Debentures. In addition to obtaining the foregoing approvals of the Holders
of the Preferred Securities, prior to taking any of the foregoing actions,
the Trustees shall, at the expense of the Depositor, obtain an Opinion of
Counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States
Federal income tax purposes on account of such action.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Trustees otherwise propose to effect, (i) any action that would adversely
affect in any material respect the powers, preferences or special rights of
the Preferred Securities, whether by way of amendment to the Trust Agreement
or otherwise, or (ii) the dissolution, winding-up or termination of the
Trust, other than pursuant to the terms of this Trust Agreement, then the
Holders of Outstanding Preferred Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not
be effective except with the approval of the Holders of at least a majority
in Liquidation Amount of the Outstanding Preferred Securities. No amendment
to this Trust Agreement may be made if,
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as a result of such amendment, the Trust would be classified as an
association taxable as a corporation for United States federal income tax
purposes.
SECTION 6.2 NOTICE OF MEETINGS.
Notice of all meetings of the Preferred Securityholders, stating the
time, place and purpose of the meeting, shall be given by the Property
Trustee pursuant to Section 10.8 to each Preferred Securityholder of record,
at his registered address, at least 15 days and not more than 90 days before
the meeting. At any such meeting, any business properly before the meeting
may be so considered whether or not stated in the notice of the meeting. Any
adjourned meeting may be held as adjourned without further notice.
SECTION 6.3 MEETINGS OF PREFERRED SECURITYHOLDERS.
No annual meeting of Securityholders is required to be held. The
Administrative Trustees, however, shall call a meeting of Securityholders to
vote on any matter upon the written request of the Preferred Securityholders
of record of 25% of the Preferred Securities (based upon their Liquidation
Amount) and the Administrative Trustees or the Property Trustee may, at any
time in their discretion, call a meeting of Preferred Securityholders to vote
on any matters as to which Preferred Securityholders are entitled to vote.
Preferred Securityholders of record of 50% of the Outstanding Preferred
Securities (based upon their Liquidation Amount), present in person or by
proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by the
Preferred Securityholders of record present, in person or by proxy, holding
more than a majority of the Preferred Securities (based upon their
Liquidation Amount) held by the Preferred Securityholders of record present,
either in person or by proxy, at such meeting shall constitute the action of
the Securityholders, unless this Trust Agreement requires a greater number of
affirmative votes.
SECTION 6.4 VOTING RIGHTS.
Securityholders shall be entitled to one vote for each $25 of
Liquidation Amount represented by their Trust Securities in respect of any
matter as to which such Securityholders are entitled to vote.
SECTION 6.5 PROXIES, ETC.
At any meeting of Securityholders, any Securityholder entitled to vote
thereat may vote by proxy, provided that no proxy shall be voted at any meeting
unless it shall have been placed on file with the Administrative Trustees, or
with such other officer or agent of the Trust as the Administrative Trustees may
direct, for verification prior to the time at which
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such vote shall be taken. Pursuant to a resolution of the Property Trustee,
proxies may be solicited in the name of the Property Trustee or one or more
officers of the Property Trustee. Only Securityholders of record shall be
entitled to vote. When Trust Securities are held jointly by several persons,
any one of them may vote at any meeting in person or by proxy in respect of
such Trust Securities, but if more than one of them shall be present at such
meeting in person or by proxy, and such joint owners or their proxies so
present disagree as to any vote to be cast, such vote shall not be received
in respect of such Trust Securities. A proxy purporting to be executed by or
on behalf of a Securityholder shall be deemed valid unless challenged at or
prior to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
SECTION 6.6 SECURITYHOLDER ACTION BY WRITTEN CONSENT.
Any action which may be taken by Securityholders at a meeting may be
taken without a meeting if Securityholders holding more than a majority of
all Outstanding Trust Securities (based upon their Liquidation Amount)
entitled to vote in respect of such action (or such larger proportion thereof
as shall be required by any express provision of this Trust Agreement) shall
consent to the action in writing.
SECTION 6.7 RECORD DATE FOR VOTING AND OTHER PURPOSES.
For the purposes of determining the Securityholders who are entitled to
notice of and to vote at any meeting or by written consent, or to participate
in any distribution on the Trust Securities in respect of which a record date
is not otherwise provided for in this Trust Agreement, or for the purpose of
any other action, the Administrative Trustees may from time to time fix a
date, not more than 90 days prior to the date of any meeting of
Securityholders or the payment of a distribution or other action, as the case
may be, as a record date for the determination of the identity of the
Securityholders of record for such purposes.
SECTION 6.8 ACTS OF SECURITYHOLDERS.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given,
made or taken by Securityholders or Owners may be embodied in and evidenced
by one or more instruments of substantially similar tenor signed by such
Securityholders or Owners in person or by an agent duly appointed in writing;
and, except as otherwise expressly provided herein, such action shall become
effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Securityholders or Owners signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Trust
Agreement and (subject to Section 8.1) conclusive in favor of the Trustees,
if made in the manner provided in this Section.
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The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or
by a certificate of a notary public or other officer authorized by law to
take acknowledgments of deeds, certifying that the individual signing such
instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which any Trustee receiving the same deems
sufficient.
The ownership of Preferred Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Securityholder of any Trust Security shall bind every
future Securityholder of the same Trust Security and the Securityholder of
every Trust Security issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done, omitted or
suffered to be done by the Trustees or the Trust in reliance thereon, whether
or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled hereunder to
take any action hereunder with regard to any particular Trust Security may do
so with regard to all or any part of the Liquidation Amount of such Trust
Security or by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any part of such
liquidation amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with
respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such
Securityholder or Trustee under this Article VI, then the determination of
such matter by the Property Trustee shall be conclusive with respect to such
matter.
A Securityholder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Guarantee Trustee
(as defined in the Guarantee), the Trust or any person or entity.
SECTION 6.9 INSPECTION OF RECORDS.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Trust shall be open to inspection by
Securityholders during normal business hours for any purpose reasonably
related to such Securityholder's interest as a Securityholder.
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ARTICLE VII
REPRESENTATIONS AND WARRANTIES
SECTION 7.1 REPRESENTATIONS AND WARRANTIES OF THE BANK, THE PROPERTY TRUSTEE
AND THE DELAWARE TRUSTEE.
The Bank, the Property Trustee and the Delaware Trustee, each severally on
behalf of and as to itself, hereby represents and warrants for the benefit of
the Depositor and the Securityholders that:
(a) the Bank is a national banking association duly organized, validly
existing and in good standing under the laws of the United States;
(b) the Bank has full corporate power, authority and legal right to
execute, deliver and perform its obligations under this Trust Agreement and has
taken all necessary action to authorize the execution, delivery and performance
by it of this Trust Agreement;
(c) this Trust Agreement has been duly authorized, executed and delivered
by the Bank and constitutes the valid and legally binding agreement of the Bank
enforceable against it in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles;
(d) the execution, delivery and performance by each of the Bank and the
Delaware Trustee of this Trust Agreement has been duly authorized by all
necessary corporate or other action on the part of the Bank, the Property
Trustee and the Delaware Trustee, respectively, and does not require any
approval of stockholders of the Bank or the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Bank's or the
Delaware Trustee's Charter or By-laws, (ii) violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included
in the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the
Property Trustee, the Bank or the Delaware Trustee, as the case may be, is a
party or by which it is bound, or (iii) violate any law, governmental rule or
regulation of the United States or the State of Delaware, as the case may be,
governing the corporate, banking or trust powers of the Bank or the Property
Trustee or the Delaware Trustee (as appropriate in context) or any order,
judgment or decree applicable to the Property Trustee, the Bank or the
Delaware Trustee;
(e) neither the authorization, execution or delivery by the Bank or the
Delaware Trustee of this Trust Agreement nor the consummation of any of the
transactions by the Bank, the Property Trustee, or the Delaware Trustee (as the
case may be) contemplated herein or therein requires the consent or approval of,
the giving of notice to, the registration
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with or the taking of any other action with respect to any governmental
authority or agency under any existing Federal law governing the corporate,
banking or trust powers of the Bank, the Property Trustee or the Delaware
Trustee, as appropriate in context, under the laws of the United States or
the State of Delaware;
(f) there are no proceedings pending or, to the best of each of the
Bank's, the Property Trustee's and the Delaware Trustee's knowledge,
threatened against or affecting the Bank, the Property Trustee or the
Delaware Trustee in any court or before any governmental authority, agency or
arbitration board or tribunal which, individually or in the aggregate, would
materially and adversely affect the Trust or would question the right, power
and authority of the Bank, the Property Trustee or the Delaware Trustee, as
the case may be, to enter into or perform its obligations as one of the
Trustees under this Trust Agreement.
SECTION 7.2 REPRESENTATIONS AND WARRANTIES OF DEPOSITOR.
The Depositor hereby represents and warrants for the benefit of the
Securityholders that:
(a) the Trust Securities Certificates issued at each Time of Delivery
on behalf of the Trust have been duly authorized and will have been, duly and
validly executed, issued and delivered by the Trustees pursuant to the terms
and provisions of, and in accordance with the requirements of, this Trust
Agreement and the Securityholders will be, as of each such date, entitled to
the benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Trust (or the Trustees on behalf of the Trust) under the laws of the
State of Delaware or any political subdivision thereof in connection with the
execution, delivery and performance by the Bank, the Property Trustee or the
Delaware Trustee, as the case may be, of this Trust Agreement.
ARTICLE VIII
THE TRUSTEES
SECTION 8.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) The duties and responsibilities of the Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee,
subject to the Trust Indenture Act. Notwithstanding the foregoing, no
provision of this Trust Agreement shall require the Trustees to expend or
risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of
their rights or powers, if they shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it. Whether or not therein expressly
so provided, every provision of this Trust Agreement relating to the
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conduct or affecting the liability of or affording protection to the Trustees
shall be subject to the provisions of this Section. Nothing in this Trust
Agreement shall be construed to release the Property Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct. To the extent that, at law or in equity, an
Administrative Trustee has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to the Securityholders, such
Administrative Trustee shall not be liable to the Trust or to any
Securityholder for such Trustee's good faith reliance on the provisions of
this Trust Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of the Administrative Trustees
otherwise existing at law or in equity, are agreed by the Depositor and the
Securityholders to replace such other duties and liabilities of the
Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms
hereof. Each Securityholder, by its acceptance of a Trust Security, agrees
that it will look solely to the revenue and proceeds from the Trust Property
to the extent legally available for distribution to it as herein provided and
that the Trustees are not personally liable to it for any amount
distributable in respect of any Trust Security or for any other liability in
respect of any Trust Security. This Section 8.1(b) does not limit the
liability of the Trustees expressly set forth elsewhere in this Trust
Agreement and, in the case of the Property Trustee, in the Trust Indenture
Act.
(c) No provision of this Trust Agreement shall be construed to relieve
the Property Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was negligent
in ascertaining the pertinent facts;
(ii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a majority in Liquidation
Amount of the Trust Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iii) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such Property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on
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liability afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree with the Depositor;
and money held by the Property Trustee need not be segregated from other
funds held by it except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.1 and except to the extent
otherwise required by law; and
(v) the Property Trustee shall not be responsible for monitoring the
compliance by the Administrative Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for the default or misconduct of the Administrative
Trustees or the Depositor.
SECTION 8.2 CERTAIN NOTICES.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Securityholders, the Administrative Trustees and the Depositor,
unless such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the Depositor's
exercise of its right to defer the payment of interest on the Debentures
pursuant to the Indenture, the Administrative Trustee shall transmit, in the
manner and to the extent provided in Section 10.8, notice of such exercise to
the Securityholders and the Property Trustee, unless such exercise shall have
been revoked.
SECTION 8.3 CERTAIN RIGHTS OF PROPERTY TRUSTEE.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action or
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as
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to which the Preferred Securityholders are entitled to vote under the terms
of this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting written instructions of the Depositor as to the course
of action to be taken and the Property Trustee shall take such action, or
refrain from taking such action, as the Property Trustee shall be instructed
in writing to take, or to refrain from taking, by the Depositor and the
Property Trustee shall be fully protected in acting in accordance with such
instructions; provided, however, that if the Property Trustee does not
receive such instructions of the Depositor within ten Business Days after it
has delivered such notice, or such reasonably shorter period of time set
forth in such notice (which to the extent practicable shall not be less than
two Business Days), it may, but shall be under no duty to, take or refrain
from taking such action not inconsistent with this Trust Agreement as it
shall deem advisable and in the best interests of the Securityholders, in
which event the Property Trustee shall have no liability except for its own
bad faith, negligence or willful misconduct;
(c) any direction or act of the Depositor or the Administrative
Trustees contemplated by this Trust Agreement shall be sufficiently evidenced
by an Officers' Certificate;
(d) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be established before
undertaking, suffering or omitting any action hereunder, the Property Trustee
(unless other evidence is herein specifically prescribed) may, in the absence
of bad faith on its part, request and rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by the
Depositor or the Administrative Trustees;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon and in
accordance with such advice; the Property Trustee shall have the right at any
time to seek instructions concerning the administration of this Trust
Agreement from any court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request
or direction of any of the Securityholders pursuant to this Trust Agreement,
unless such Securityholders shall have offered to the Property Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or direction;
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(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Securityholders, but the
Property Trustee may make such further inquiry or investigation into such
facts or matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
its agents or attorneys, provided that the Property Trustee shall be
responsible for its own negligence or recklessness with respect to selection
of any agent or attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Property Trustee (i) may request instructions from the Holders of the Trust
Securities which instructions may only be given by the Holders of the same
proportion in Liquidation Amount of the Trust Securities as would be entitled
to direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received, and (iii) shall be protected in acting in accordance with such
instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property
Trustee shall be construed to be a duty.
SECTION 8.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Depositor, and the Trustees do not
assume any responsibility for their correctness. The Trustees shall not be
accountable for the use or application by the Depositor of the proceeds of
the Debentures.
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SECTION 8.5 MAY HOLD SECURITIES.
Except as provided in the definition of the term "Outstanding" in
Article I, any Trustee or any other agent of any Trustee or the Trust, in its
individual or any other capacity, may become the owner or pledgee of Trust
Securities and, subject to Sections 8.8 and 8.13, may otherwise deal with the
Trust with the same rights it would have if it were not a Trustee or such
other agent.
SECTION 8.6 COMPENSATION; INDEMNITY; FEES.
The Depositor agrees:
(a) to pay to the Trustees from time to time reasonable compensation
for all services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of
an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustees in accordance with any provision of this
Trust Agreement (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify each of the Trustees or any predecessor Trustee for,
and to hold the Trustees harmless against, any loss, damage, claims,
liability, penalty or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this Trust Agreement, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder.
The provisions of this Section 8.6 shall survive the termination of this
Trust Agreement or the resignation or removal of any Trustee.
No Trustee may claim any lien or charge on any Trust Property as a
result of any amount due pursuant to this Section 8.6.
SECTION 8.7 CORPORATE PROPERTY TRUSTEE REQUIRED; ELIGIBILITY OF TRUSTEES.
(a) There shall at all times be a Property Trustee hereunder. The
Property Trustee shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at
least $50,000,000. If any such Person publishes reports of condition at
least annually, pursuant to law or to the requirements of its supervising or
examining authority, then for the purposes of this Section, the combined
capital and surplus of such Person shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so published.
If at any time the Property
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Trustee with respect to the Trust Securities shall cease to be eligible in
accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
(b) There shall at all times be one or more Administrative Trustees
hereunder. Each Administrative Trustee shall be either a natural person who
is at least 21 years of age or a legal entity that shall act through one or
more persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The Delaware
Trustee shall either be (i) a natural person who is at least 21 years of age
and a resident of the State of Delaware or (ii) a legal entity with its
principal place of business in the State of Delaware and that otherwise meets
the requirements of applicable Delaware law that shall act through one or
more persons authorized to bind such entity.
SECTION 8.8 CONFLICTING INTERESTS.
If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and
this Trust Agreement. Subject to the foregoing, the Depositor 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 business of the Trust, and the Trust and the Holders shall
have no rights by virtue of this Trust Agreement in and to such independent
ventures or the income or profits derived therefrom, and the pursuit of any
such venture, even if competitive with the business of the Trust, shall not
be deemed wrongful or improper. Neither the Depositor, nor 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 the Depositor or 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 Trustee may engage in any financial or
other transaction with the Depositor or any Affiliate of the Depositor, 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 Depositor or its
Affiliates.
SECTION 8.9 CO-TRUSTEES AND SEPARATE TRUSTEE.
Unless an Event of Default shall have occurred and be continuing, at any
time or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any part of the Trust Property
may at the time be located, the Depositor and the Administrative Trustees, by
agreed action of the majority of such Trustees, shall have power to appoint,
and upon the written request of the Administrative Trustees, the Depositor
shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements
necessary or proper to appoint,
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one or more Persons approved by the Property Trustee either to act as
co-trustee, jointly with the Property Trustee, of all or any part of such
Trust Property, or to the extent required by law to act as separate trustee
of any such property, in either case with such powers as may be provided in
the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age
and a resident of the United States or (ii) a legal entity with its principal
place of business in the United States that shall act through one or more
persons authorized to bind such entity.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed and delivered and all
rights, powers, duties, and obligations hereunder in respect of the custody
of securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustees specified hereunder, shall be
exercised, solely by such Trustees and not by such co-trustee or separate
trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by
the Property Trustee or by the Property Trustee and such co-trustee or
separate trustee jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the extent that under any law
of any jurisdiction in which any particular act is to be performed, the
Property Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under
this Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without the
concurrence of the Depositor. Upon the written request of the Property
Trustee, the Depositor shall join with the Property Trustee in the execution,
delivery and performance of all instruments and
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agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason of any act of a
co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
No resignation or removal of any Trustee (the "Relevant Trustee") and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee may
resign at any time with respect to the Trust Securities by giving written
notice thereof to the Securityholders. If the instrument of acceptance by
the successor Trustee required by Section 8.11 shall not have been delivered
to the Relevant Trustee within 30 days after the giving of such notice of
resignation, the Relevant Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee with respect to the Trust Securities.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them,
may be removed at such time by Act of the Holders of a majority in
Liquidation Amount of the Preferred Securities, delivered to the Relevant
Trustee (in its individual capacity and on behalf of the Trust). An
Administrative Trustee may be removed by the Common Securityholder at any
time.
If any Trustee shall resign, be removed or become incapable of acting as
Trustee, or if a vacancy shall occur in the office of any Trustee for any
cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee
or Trustees with respect to the Trust Securities and the Trust, and the
retiring Trustee shall comply with the applicable requirements of Section
8.11. If the Property Trustee or the Delaware Trustee shall resign, be
removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case
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may be, at a time when a Debenture Event of Default shall have occurred and be
continuing, the Preferred Securityholders, by Act of the Securityholders of a
majority in Liquidation Amount of the Preferred Securities then Outstanding
delivered to the retiring Relevant Trustee, shall promptly appoint a
successor Relevant Trustee or Trustees with respect to the Trust Securities
and the Trust, and such successor Trustee shall comply with the applicable
requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become
incapable of acting as Administrative Trustee, at a time when a Debenture
Event of Default shall have occurred and be continuing, the Common
Securityholder by Act of the Common Securityholder delivered to the
Administrative Trustee shall promptly appoint a successor Administrative
Trustee or Administrative Trustees with respect to the Trust Securities and
the Trust, and such successor Administrative Trustee or Trustees shall comply
with the applicable requirements of Section 8.11. If no successor Relevant
Trustee with respect to the Trust Securities shall have been so appointed by
the Common Securityholder or the Preferred Securityholders and accepted
appointment in the manner required by Section 8.11, any Securityholder who
has been a Securityholder of Trust Securities 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 Relevant Trustee
with respect to the Trust Securities.
The Property Trustee shall give notice of each resignation and each
removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.8 and shall give notice
to the Depositor. Each notice shall include the name of the successor
Relevant Trustee and the address of its Corporate Trust Office if it is the
Property Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who
is a natural person dies or becomes, in the opinion of the Depositor,
incompetent or incapacitated, the vacancy created by such death, incompetence
or incapacity may be filled by (a) the unanimous act of remaining
Administrative Trustees if there are at least two of them or (b) otherwise by
the Depositor (with the successor in each case being a Person who satisfies
the eligibility requirement for Administrative Trustees set forth in Section
8.7).
SECTION 8.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
In case of the appointment hereunder of a successor Trustee such
successor Trustee so appointed shall execute, acknowledge and deliver to the
Trust and to the retiring Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Depositor or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to
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such successor Trustee all the rights, powers and trusts of the retiring
Trustee and if the Property Trustee is the resigning Trustee shall duly
assign, transfer and deliver to the successor Trustee all property and money
held by such retiring Property Trustee hereunder.
In case of the appointment hereunder of a successor Relevant Trustee
with respect to the Trust Securities and the Trust, the retiring Relevant
Trustee and each successor Relevant Trustee with respect to the Trust
Securities shall execute and deliver an amendment hereto wherein each
successor Relevant Trustee shall accept such appointment and which (a) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to
the Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Relevant Trustee, it being understood that nothing herein or in such
amendment shall constitute such Relevant Trustees co-trustees of the same
trust and that each such Relevant Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Relevant Trustee and upon the execution and
delivery of such amendment the resignation or removal of the retiring
Relevant Trustee shall become effective to the extent provided therein and
each such successor Relevant Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Relevant Trustee with respect to the Trust Securities
and the Trust; but, on request of the Trust or any successor Relevant Trustee
such retiring Relevant Trustee shall duly assign, transfer and deliver to
such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the
Trust Securities and the Trust.
Upon request of any such successor Relevant Trustee, the Trust shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case
may be.
No successor Relevant Trustee shall accept its appointment unless at the
time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Property Trustee or the Delaware 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
such Relevant Trustee shall be a party, or any corporation succeeding to all
or substantially all the corporate trust business of such Relevant Trustee,
shall be the successor of such Relevant Trustee hereunder, provided such
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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SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST DEPOSITOR OR TRUST.
If and when the Property Trustee or the Delaware Trustee shall be or
become a creditor of the Depositor or the Trust (or any other obligor upon
the Debentures or the Trust Securities), the Property Trustee or the Delaware
Trustee, as the case may be, shall be subject to and shall take all actions
necessary in order to comply with the provisions of the Trust Indenture Act
regarding the collection of claims against the Depositor or Trust (or any
such other obligor).
SECTION 8.14 REPORTS BY PROPERTY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with May 15,
1999, the Property Trustee shall transmit to all Securityholders in
accordance with Section 10.8, and to the Depositor, a brief report dated as
of such May 15 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if to
the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with all of
its obligations under this Trust Agreement during the twelve-month
period (or, in the case of the initial report, the period since the
Closing Date) ending with such May 15 or, if the Property Trustee has
not complied in any material respect with such obligations, a
description of such noncompliance; and
(iii) any change in the property and funds in its possession as
Property Trustee since the date of its last report and any action taken
by the Property Trustee in the performance of its duties hereunder
which it has not previously reported and which in its opinion materially
affects the Trust Securities.
(b) In addition the Property Trustee shall transmit to Securityholders
such reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock
exchange, the Nasdaq National Market or such other interdealer quotation
system or self-regulatory organization upon which the Trust Securities are
listed or traded, with the Commission and with the Depositor.
SECTION 8.15 REPORTS TO THE PROPERTY TRUSTEE.
The Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information
as required by Section 314 of
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the Trust Indenture Act (if any) and the compliance certificate required by
Section 314(a) of the Trust Indenture Act in the form, in the manner and at
the times required by Section 314 of the Trust Indenture Act.
SECTION 8.16 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Depositor and the Administrative Trustees on behalf of the
Trust shall provide to the Property Trustee such evidence of compliance with
any conditions precedent, if any, provided for in this Trust Agreement that
relate to any of the matters set forth in Section 314 (c) of the Trust
Indenture Act. Any certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act shall be given in
the form of an Officers' Certificate.
SECTION 8.17 NUMBER OF TRUSTEES.
(a) The number of Trustees shall be four, provided that the Holder of
all of the Common Securities by written instrument may increase or decrease
the number of Administrative Trustees. The Property Trustee and the Delaware
Trustee may be the same person.
(b) If a Trustee ceases to hold office for any reason and the number of
Administrative Trustees is not reduced pursuant to Section 8.17(a), or if the
number of Trustees is increased pursuant to Section 8.17(a), a vacancy shall
occur. The vacancy shall be filled with a Trustee appointed in accordance
with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not
operate to annul the Trust. Whenever a vacancy in the number of
Administrative Trustees shall occur, until such vacancy is filled by the
appointment of an Administrative Trustee in accordance with Section 8.10, the
Administrative Trustees in office, regardless of their number (and
notwithstanding any other provision of this Agreement), shall have all the
powers granted to the Administrative Trustees and shall discharge all the
duties imposed upon the Administrative Trustees by this Trust Agreement.
SECTION 8.18 DELEGATION OF POWER.
(a) Any Administrative Trustee may, by power of attorney consistent
with applicable law, delegate to any other natural person over the age of 21
his or her power for the purpose of executing any documents contemplated in
Section 2.7(a), including any registration statement or amendment thereto
filed with the Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things
and the execution of such
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instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law
or contrary to the provisions of the Trust, as set forth herein.
ARTICLE IX
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1 TERMINATION UPON EXPIRATION DATE.
Unless earlier terminated, the Trust shall automatically terminate on
December 31, 2053 (the "Expiration Date"), following the distribution of the
Trust Property in accordance with Section 9.4.
SECTION 9.2 EARLY TERMINATION.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or the
dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from the Depositor at
any time (which direction is optional and wholly within the discretion of the
Depositor) to terminate the Trust and distribute Debentures to
Securityholders in exchange for the Preferred Securities.
(c) the redemption of all of the Preferred Securities in connection
with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the Trust by a court of
competent jurisdiction.
SECTION 9.3 TERMINATION.
The respective obligations and responsibilities of the Trustees and the
Trust created and continued hereby shall terminate upon the latest to occur
of the following: (a) the distribution by the Property Trustee to
Securityholders upon the liquidation of the Trust pursuant to Section 9.4, or
upon the redemption of all of the Trust Securities pursuant to Section 4.2,
of all amounts required to be distributed hereunder upon the final payment of
the Trust Securities; (b) the payment of any expenses owed by the Trust; and
(c) the discharge of all administrative duties of the Administrative
Trustees, including the performance of any tax reporting obligations with
respect to the Trust or the Securityholders.
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SECTION 9.4 LIQUIDATION.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Trust shall be
liquidated by the Trustees as expeditiously as the Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of
the Trust as provided by applicable law, to each Securityholder a Like Amount
of Debentures, subject to Section 9.4(d). Notice of liquidation shall be
given by the Property Trustee by first-class mail, postage prepaid mailed not
later than 30 nor more than 60 days prior to the Liquidation Date to each
Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the mechanics by
which Holders may exchange Trust Securities Certificates for Debentures,
or if section 9.4(d) applies receive a Liquidation Distribution, as the
Administrative Trustees or the Property Trustee shall deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Trust and distribution of the Debentures to
Securityholders, the Property Trustee shall establish a record date for such
distribution (which shall be not more than 45 days prior to the Liquidation
Date) and, either itself acting as exchange agent or through the appointment
of a separate exchange agent, shall establish such procedures as it shall
deem appropriate to effect the distribution of Debentures in exchange for
the Outstanding Trust Securities Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will
be issued to holders of Trust Securities Certificates, upon surrender of
such certificates to the Administrative Trustees or their agent for
exchange, (iii) the Depositor shall use its reasonable efforts to have the
Debentures listed on the New York Stock Exchange or on such other exchange,
interdealer quotation system or self-regulatory organization as the
Preferred Securities are then listed, (iv) any Trust Securities Certificates
not so surrendered for exchange will be deemed to represent a Like Amount of
Debentures, accruing interest at the rate provided for in the Debentures
from the last Distribution Date on which a Distribution was made on such
Trust Securities Certificates until such certificates are so surrendered
(and until such certificates are so surrendered, no payments of interest or
principal will be made to Holders of Trust Securities Certificates with
respect to such Debentures) and (v) all rights of Securityholders holding
Trust Securities will cease, except
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the right of such Securityholders to receive Debentures upon surrender of
Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions of this
Section 9.4, whether because of an order for dissolution entered by a court
of competent jurisdiction or otherwise, distribution of the Debentures in
the manner provided herein is determined by the Property Trustee not to be
practical, the Trust Property shall be liquidated, and the Trust shall be
dissolved, wound-up or terminated, by the Property Trustee in such manner as
the Property Trustee determines. In such event, on the date of the
dissolution, winding-up or other termination of the Trust, Securityholders
will be entitled to receive out of the assets of the Trust available for
distribution to Securityholders, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, an amount equal to the
Liquidation Amount per Trust Security plus accumulated and unpaid
Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding up or
termination, the Liquidation Distribution can be paid only in part because
the Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Trust on the Trust Securities shall be paid on a pro
rata basis (based upon Liquidation Amounts). The holder of the Common
Securities will be entitled to receive Liquidation Distributions upon any
such dissolution, winding-up or termination pro rata (determined as
aforesaid) with Holders of Preferred Securities, except that, if a Debenture
Event of Default has occurred and is continuing, the Preferred Securities
shall have a priority over the Common Securities.
SECTION 9.5 MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF THE
TRUST.
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except
pursuant to this Section 9.5. At the request of the Depositor, with the
consent of only the Administrative Trustees and without the consent of the
holders of the Preferred Securities, the Trust may merge with or into,
consolidate, amalgamate, or be replaced by or convey, transfer or lease its
properties and assets substantially as an entirety to a trust organized as
such under the laws of any State; provided, that (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect
to the Preferred Securities or (b) substitutes for the Preferred Securities
other securities having substantially the same terms as the Preferred
Securities (the "Successor Securities") so long as the Successor Securities
rank the same as the Preferred Securities rank in priority with respect to
distributions and payments upon liquidation, redemption and otherwise, (ii)
the Depositor expressly appoints a trustee of such successor entity
possessing the same powers and duties as the Property Trustee as the holder
of the Debentures, (iii) the Successor Securities are listed or traded, or
any Successor Securities will be listed upon notification of issuance, on any
national securities exchange or other organization on which the Preferred
Securities are then listed or traded, if any, (iv) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does
not cause the Preferred Securities (including any Successor Securities) to be
downgraded by any nationally
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<PAGE>
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 Preferred
Securities (including any Successor Securities) in any material respect, (vi)
such successor entity has a purpose identical to that of the Trust, (vii)
prior to such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Depositor has received an Opinion of Counsel to the
effect that (a) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the Preferred Securities
(including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Trust nor such successor entity will be
required to register as an investment company under the 1940 Act and (viii)
the Depositor owns all of the Common Securities of such successor entity and
guarantees the obligations of such successor entity under the Successor
Securities at least to the extent provided by the Guarantee. Notwithstanding
the foregoing, the Trust shall not, except with the consent of holders of
100% in Liquidation Amount of the Preferred Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or
lease its properties and assets 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.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 LIMITATION OF RIGHTS OF SECURITYHOLDERS.
The death or incapacity of any person having an interest, beneficial or
otherwise, in Trust Securities shall not operate to terminate this Trust
Agreement, nor entitle the legal representatives or heirs of such person or
any Securityholder for such person, to claim an accounting, take any action
or bring any proceeding in any court for a partition or winding up of the
arrangements contemplated hereby, nor otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.
SECTION 10.2 AMENDMENT.
(a) This Trust Agreement may be amended from time to time by the
Trustees and the Depositor, without the consent of any Securityholders, (i)
to cure any ambiguity, 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 Trust
Agreement, which shall not be inconsistent with the other provisions of this
Trust Agreement, or (ii) to modify, eliminate or add to any provisions of
this Trust Agreement to such extent as shall be necessary to ensure that the
Trust will be classified for United States
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<PAGE>
Federal income tax purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust will not be required
to register as an investment company under the 1940 Act; provided, however,
that in the case of clause (i), such action shall not adversely affect in any
material respect the interests of any Securityholder, and any amendments of
this Trust Agreement shall become effective when notice thereof is given to
the Securityholders.
(b) Except as provided in Section 10.2(c) hereof, any provision of this
Trust Agreement may be amended by the Trustees and the Depositor with (i) the
consent of Trust Securityholders representing not less than a majority (based
upon Liquidation Amounts) of the Trust Securities then Outstanding and (ii)
receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States Federal income tax purposes or the Trust's exemption from
status of an investment company under the 1940 Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Securityholder (such
consent being obtained in accordance with Section 6.3 or 6.6 hereof), this
Trust Agreement may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount
of any Distribution required to be made in respect of the Trust Securities as
of a specified date or (a) restrict the right of a Securityholder to
institute suit for the enforcement of any such payment on or after such date;
notwithstanding any other provision herein, without the unanimous consent of
the Securityholders (such consent being obtained in accordance with Section
6.3 or 6.6 hereof), this paragraph (c) of this Section 10.2 may not be
amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Trustee shall enter into or consent to any amendment to this Trust Agreement
which would cause the Trust to fail or cease to qualify for the exemption
from status of an investment company under the 1940 Act or fail or cease to
be classified as a grantor trust for United States Federal income tax
purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor, this Trust Agreement may not be amended
in a manner which imposes any additional obligation on the Depositor.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees shall promptly provide to the Depositor a copy of
such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement which affects
its own rights, duties or immunities under this Trust Agreement. The
Property Trustee shall be entitled to receive an
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<PAGE>
Opinion of Counsel and an Officers' Certificate stating that any amendment to
this Trust Agreement is in compliance with this Trust Agreement.
SECTION 10.3 SEPARABILITY.
In case any provision in this Trust Agreement or in the Trust Securities
Certificates shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
SECTION 10.4 GOVERNING LAW.
This Trust Agreement and the rights and obligations of each of the
Securityholders, the Trust and the Trustees with respect to this Trust
Agreement and the Trust Securities shall be construed in accordance with and
governed by the laws of the State of Delaware.
SECTION 10.5 PAYMENTS DUE ON NON-BUSINESS DAY.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date
but may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no interest
shall accrue thereon for the period after such date.
SECTION 10.6 SUCCESSORS.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Trust or the Relevant Trustee,
including any successor by operation of law. Except in connection with a
consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7 HEADINGS.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8 REPORTS, NOTICES AND DEMANDS.
Any report, notice, demand or other communication which by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon any Securityholder or the Depositor may be given or served in writing by
deposit thereof, first-class postage prepaid, in the United States mail, hand
delivery or facsimile transmission, in each case, addressed, (a) in the case
of a Preferred Securityholder, to such Preferred
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<PAGE>
Securityholder as such Securityholder's name and address may appear on the
Securities Register; and (b) in the case of the Common Securityholder or the
Depositor, to Lincoln National Corporation, 200 East Berry Street, Fort
Wayne, Indiana 46802-2706, Attention: Treasurer, facsimile no.: (219)
455-6265. Any notice to Preferred Securityholders shall also be given to
such owners as have, within two years preceding the giving of such notice,
filed their names and addresses with the Property Trustee for that purpose.
Such notice, demand or other communication to or upon a Securityholder shall
be deemed to have been sufficiently given or made, for all purposes, upon
hand delivery, mailing or transmission.
Any notice, demand or other communication which by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Trust, the Property Trustee or the Administrative Trustees shall be given in
writing addressed (until another address is published by the Trust) as
follows: (a) with respect to the Property Trustee to The First National Bank
of Chicago, One First National Plaza, Suite 0126, Chicago, Illinois
60670-0126 Attention: Corporate Trust Department; (b) with respect to the
Delaware Trustee, to First Chicago Delaware Inc., 300 King Street,
Wilmington, Delaware 19801; and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention Administrative Trustees of Lincoln National Capital III." Such
notice, demand or other communication to or upon the Trust or the Property
Trustee shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Trust or the Property Trustee.
SECTION 10.9 AGREEMENT NOT TO PETITION.
Each of the Trustees and the Depositor agree for the benefit of the
Securityholders that, until at least one year and one day after the Trust has
been terminated in accordance with Article IX, they shall not file, or join
in the filing of, a petition against the Trust under any bankruptcy,
insolvency, reorganization or other similar law (including, without
limitation, the United States Bankruptcy Code) (collectively, "Bankruptcy
Laws") or otherwise join in the commencement of any proceeding against the
Trust under any Bankruptcy Law. In the event the Depositor takes action in
violation of this Section 10.9, the Property Trustee agrees, for the benefit
of Securityholders, that at the expense of the Depositor, it shall file an
answer with the bankruptcy court or otherwise properly contest the filing of
such petition by the Depositor against the Trust or the commencement of such
action and raise the defense that the Depositor has agreed in writing not to
take such action and should be stopped and precluded therefrom and such other
defenses, if any, as counsel for the Trustee or the Trust may assert. The
provisions of this Section 10.9 shall survive the termination of this Trust
Agreement.
SECTION 10.10 TRUST INDENTURE ACT; CONFLICT WITH TRUST INDENTURE ACT.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall,
to the extent applicable, be governed by such provisions.
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<PAGE>
(b) The Property Trustee shall be the only Trustee which is a trustee
for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in this Trust Agreement by
any of the provisions of the Trust Indenture Act, such required provision
shall control. If any provision of this Trust Agreement modifies or excludes
any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Trust
Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
SECTION 10.11 ACCEPTANCE OF TERMS OF TRUST AGREEMENT, GUARANTEE AND
INDENTURE.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY
SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL THE TERMS AND PROVISIONS OF
THIS TRUST AGREEMENT AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER
TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE
AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
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<PAGE>
Lincoln National Corporation
By: /s/ Richard C. Vaughan
---------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
The First National Bank of Chicago as Property
Trustee
By: /s/ John R. Prendiville
---------------------------------
Name: John R. Prendiville
Title: Vice President
First Chicago Delaware Inc. as Delaware Trustee
By: /s/ John R. Prendiville
---------------------------------
Name: John R. Prendiville
Title: Vice President
/s/ Janet Chrzan
---------------------------------
Janet Chrzan,
as Administrative Trustee
/s/ Richard C. Vaughan
---------------------------------
Richard C. Vaughan,
as Administrative Trustee
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<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST
OF
LINCOLN NATIONAL CAPITAL III
This Certificate of Trust of Lincoln National Capital III (the "Trust"),
dated May 20, 1996, is being duly executed and filed by the undersigned, as
trustees, to form a business trust under the Delaware Business Trust Act (12
Del. C. Section 3801 et seq.).
1. NAME. The name of the business trust being formed hereby is
Lincoln National Capital III.
2. DEBENTURE TRUST. The name and business address of the trustee of
the Trust with a principal place of business in the State of Delware is First
Chicago Delware Inc., 300 King Street, Wilmington, DE 19801.
3. EFFECTIVE DATE. This Certificate of Trust shall be effective as of
May 20, 1996.
IN WITNESS WHEREOF, the undersigned, being the trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
THE FIRST NATIONAL BANK OF CHICAGO, as Trustee
By /s/ Richard D. Kanella
----------------------------------
Name: Richard D. Kanella
Title: Vice President
FIRST CHICAGO DELAWARE INC., as Trustee
By /s/ L. Dillard
----------------------------------
Name: L. Dillard
Title: Vice President
JANET WHITNEY, as Trustee
/s/ Janet Whitney
----------------------------------
Janet Whitney
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Certificate Number Number of Common Securities
C-1 247,440
Certificate Evidencing Common Securities
of
Lincoln National Capital III
7.40% Common Securities
(liquidation amount $25 per Common Security)
Lincoln National Capital III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Lincoln National Corporation (the "Holder") is the
registered owner of two hundred forty-seven thousand, four hundred forty
(247,440) common securities of the Trust representing undivided
beneficial interests in the assets of the Trust and designated the 7.40%
Common Securities (liquidation amount $25 per Common Security) (the
"Common Securities"). In accordance with Section 5.10 of the Trust
Agreement (as defined below) the Common Securities are not transferable
and any attempted transfer hereof shall be void. The designations,
rights, privileges, restrictions, preferences and other terms and
provisions of the Common Securities are set forth in, and this
certificate and the Common Securities represented hereby are issued and
shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Trust, dated as of July 24,
1998, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common
Securities as set forth therein. The Trust will furnish a copy of the
Trust Agreement to the Holder without charge upon written request to the
Trust at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this 24th day of July, 1998.
LINCOLN NATIONAL CAPITAL III
By: /s/ Janet C. Chrzan
------------------------
Name: Janet C. Chrzan
Administrative Trustee
<PAGE>
EXHIBIT D
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT dated as of July 24, 1998, between Lincoln National
Corporation, as Indiana corporation ("Lincoln"), and Lincoln National
Capital III, a Delaware business trust (the "Trust").
WHEREAS, the Trust intends to issue its Common Securities (the "Common
Securities") to and receive Debentures from Lincoln and to issue and sell
7.40% Trust Originated Preferred Securities (the "Preferred Securities")
with such powers, preferences and special rights and restrictions as are set
forth in the Amended and Restate Trust Agreement of the Trust dated as of
July 24, 1998 as the same may be amended from time to time (the "Trust
Agreement");
WHEREAS, Lincoln will directly or indirectly own all of the Common
Securities of the Trust and will issue the Debentures;
NOW, THEREFORE, in consideration of the purchase by each holder of the
Preferred Securities, which purchase Lincoln hereby agrees shall benefit
Lincoln and which purchase Lincoln acknowledges will be made in reliance
upon the execution and delivery of this Agreement, Lincoln and Trust hereby
agree as follows:
ARTICLE I
SECTION 1.1. GUARANTEE BY LINCOLN.
Subject to the terms and conditions hereof, Lincoln hereby irrevocably
and unconditionally guarantees to each person or entity to whom the Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations (as hereinafter
defined) to such Beneficiaries. As used herein, "Obligations" means any
costs, expenses or liabilities of the Trust, other than obligations of the
Trust to pay to holders of any preferred Securities or other similar
interests in the Trust the amounts due such holders pursuant to the terms of
the Preferred Securities or such other similar interests, as the case may
be. This Agreement is intended to be for the benefit of, and to be
enforceable by, all such Beneficiaries, whether or not such Beneficiaries
have received notice hereof.
SECTION 1.2. TERM OF AGREEMENT.
This Agreement shall terminate and be of no further force and
effect upon the later of (a) the date on which full payment has been made of
all amounts payable to all holders of all the Preferred Securities (whether
upon redemption, liquidation, exchange or otherwise) and (b) the date on
which there are no Beneficiaries remaining; PROVIDED, HOWEVER, that this
<PAGE>
Agreement shall continue to be effective or shall be reinstated, as the case
may be, if at any time any holder of Preferred Securities or any Beneficiary
must restore payment of any sums paid under the Preferred Securities, under
any Obligation, under the Guarantee Agreement dated the date hereof by
Lincoln and The First National Bank of Chicago as guarantee trustee or under
this Agreement for any reason whatsoever. This Agreement is continuing,
irrevocable, unconditional and absolute.
SECTION 1.3. WAIVER OF NOTICE.
Lincoln hereby waives notice of acceptance of this Agreement and of any
Obligation to which it applies or may apply, and Lincoln hereby waives
presentment, demand for payment, protest, notices of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 1.1. NO IMPAIRMENT.
The obligations, covenants, agreements and duties of Lincoln under this
Agreement shall in no way be affected or impaired by reason of the happening
from time to time of any of the following:
(a) the extension of time for the payment by the Trust of all or any
portion of the Obligations or for the performance of any other obligation
under, arising out of, or in connection with, the obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege,
power or remedy conferred on the Beneficiaries with respect to the
Obligations or any action on the part of the Trust granting indulgence or
extension or any kind; or
(c) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement composition or
readjustment of debt of, or other similar proceedings affecting, the
Trust or any of the assets of the Trust.
There shall be no obligation of the Beneficiaries to give notice to, or
obtain the consent of, Lincoln with respect to the happening of any of the
foregoing.
SECTION 1.5. ENFORCEMENT.
A Beneficiary may enforce this Agreement directly against Lincoln and
Lincoln waives any right or remedy to require that any action be brought
against the Trust or any other person or entity before proceeding against
Lincoln.
-2-
<PAGE>
SECTION 1.6. SUBROGATION.
Lincoln shall be subrogated to all (if any) rights of the Trust in
respect of any amounts paid tot he Beneficiaries by Lincoln under this
Agreement; PROVIDED, HOWEVER, that Lincoln shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise
any rights which it may acquire by way of subrogation or any indemnity,
reimbursement or other agreement. In all cases as a result of payment under
this Agreement, if, at the time of any such payment, any amounts are due and
unpaid under this Agreement.
ARTICLE II
SECTION 2.1. BINDING EFFECT.
All guarantees and agreements contained in this Agreement shall bind
the successors, assigns, receivers, trustees and representatives of Lincoln
and shall inure to the benefit of the Beneficiaries.
SECTION 2.2. AMENDMENT.
So long as there remains any Beneficiary or any Preferred Securities of
any series are outstanding, this Agreement shall not be modified or amended
in any manner adverse to such Beneficiary or to the holders of the Preferred
Securities.
SECTION 2.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be given in writing by delivering the dame against
receipt therefor by facsimile transmission (confirmed by mail), telex or by
registered or certified mail, addressed as follows (and if so given, shall
be deemed given when mailed or upon receipt of an answer-back, if sent by
telex):
Lincoln National Capital III
c/o Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: (219) 455-6265
Attention: Treasurer
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: (219) 455-6265
Attention: Treasurer
-3-
<PAGE>
Section 2.4. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the State of New York.
THIS AGREEMENT is executed as of the day and year first above written.
LINCOLN NATIONAL CORPORATION
By:
----------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
LINCOLN NATIONAL CAPITAL III
By:
----------------------------------
Name: Janet C. Chrzan
Title: Administrative Trustee
-4-
<PAGE>
EXHIBIT E
This Preferred Security is a Global Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered
in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in
the Trust Agreement and no transfer of this Preferred Security (other
than a transfer of this Preferred Security as a whole 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) may be registered
except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York) to Lincoln National Capital III or its agent for registration of
transfer, exchange or payment, and any Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by
an authorized representative of The Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-1 8,000,000
CUSIP No. 53417P209
Certificate Evidencing Preferred Securities
of
Lincoln National Capital III
7.40% Trust Originated Preferred Securities,
Series C
(liquidation amount $25 per Preferred Security)
Lincoln National Capital III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is
<PAGE>
the registered owner of Eight Million (8,000,000) preferred securities
of the Trust representing an undivided beneficial interest in the assets
of the Trust and designated the Lincoln National Capital III 7.40% Trust
Originated Preferred Securities, Series C (Liquidation Amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in
Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions
of, the Amended and Restated Trust Agreement of the Trust, dated as of
July 24, 1998, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits
of the Guarantee Agreement entered into by Lincoln National Corporation,
an Indiana corporation, and The First National Bank of Chicago, as
guarantee trustee, dated as of July 24, 1998 (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust
Agreement and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered
office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this 24th day of July, 1998.
LINCOLN NATIONAL CAPITAL III
By: /s/ Janet C. Chrzan
------------------------
Name: Janet C. Chrzan
Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
SIGNATURE(S) GUARANTEED:
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
<PAGE>
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 4.2
This Preferred Security is a Global Certificate within the
meaning of the Trust Agreement hereinafter referred to and is registered
in the name of The Depository Trust Company (the "Depository") or a
nominee of the Depository. This Preferred Security is exchangeable for
Preferred Securities registered in the name of a person other than the
Depository or its nominee only in the limited circumstances described in
the Trust Agreement and no transfer of this Preferred Security (other
than a transfer of this Preferred Security as a whole 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) may be registered
except in limited circumstances.
Unless this Preferred Security is presented by an authorized
representative of The Depository Trust Company (55 Water Street, New
York) to Lincoln National Capital III or its agent for registration of
transfer, exchange or payment, and any Preferred Security issued is
registered in the name of Cede & Co. or such other name as requested by
an authorized representative of The Depository Trust Company and any
payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
Certificate Number Number of Preferred Securities
P-1 8,000,000
CUSIP No. 53417P209
Certificate Evidencing Preferred Securities
of
Lincoln National Capital III
7.40% Trust Originated Preferred Securities,
Series C
(liquidation amount $25 per Preferred Security)
Lincoln National Capital III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby
certifies that Cede & Co. (the "Holder") is
<PAGE>
the registered owner of Eight Million (8,000,000) preferred securities
of the Trust representing an undivided beneficial interest in the assets
of the Trust and designated the Lincoln National Capital III 7.40% Trust
Originated Preferred Securities, Series C (Liquidation Amount $25 per
Preferred Security) (the "Preferred Securities"). The Preferred
Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in
Section 5.4 of the Trust Agreement (as defined below). The
designations, rights, privileges, restrictions, preferences and other
terms and provisions of the Preferred Securities are set forth in, and
this certificate and the Preferred Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions
of, the Amended and Restated Trust Agreement of the Trust, dated as of
July 24, 1998, as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of Preferred
Securities as set forth therein. The Holder is entitled to the benefits
of the Guarantee Agreement entered into by Lincoln National Corporation,
an Indiana corporation, and The First National Bank of Chicago, as
guarantee trustee, dated as of July 24, 1998 (the "Guarantee"), to the
extent provided therein. The Trust will furnish a copy of the Trust
Agreement and the Guarantee to the Holder without charge upon written
request to the Trust at its principal place of business or registered
office.
Upon receipt of this certificate, the Holder is bound by the
Trust Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Trust
has executed this certificate this 24th day of July, 1998.
LINCOLN NATIONAL CAPITAL III
By: /s/ Janet C. Chrzan
------------------------
Name: Janet C. Chrzan
Administrative Trustee
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
Security to:
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
agent to transfer this Preferred Security Certificate on the books
of the Trust. The agent may substitute another to act for him or her.
Date:__________________
Signature:________________________
(Sign exactly as your name appears on the other side of this Preferred
Security Certificate)
SIGNATURE(S) GUARANTEED:
THE SIGNATURE(S) SHOULD BE GUARANTEED
BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN
<PAGE>
ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE
GUARANTEE MEDALLION PROGRAM), PURSUANT
TO S.E.C. RULE 17Ad-15.
<PAGE>
EXHIBIT 4.3
LINCOLN NATIONAL CORPORATION
7.40% Junior Subordinated Deferrable Interest Debentures,
Series C
No. C-1 $206,186,000
CUSIP No. 53417P209
LINCOLN NATIONAL CORPORATION, a corporation organized and existing
under the laws of Indiana (hereinafter called the "COMPANY", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The First National Bank of Chicago, as
Property Trustee of Lincoln National Capital III, or registered assigns, the
principal sum of two hundred six million, one hundred eighty-six thousand
dollars ($206,186,000) on September 30, 2028; PROVIDED, that the Company may
extend the maturity date subject to certain conditions specified in Section 3.14
of the Indenture, which extended maturity date shall in no case be later than
September 30, 2047. The Company further promises to pay interest on said
principal sum from July 24, 1998 or from the most recent interest payment date
(each such date, an "INTEREST PAYMENT DATE") on which interest has been paid or
duly provided for, quarterly (subject to deferral as set forth herein) in
arrears on the last day of March, June, September and December of each year,
commencing September 30, 1998, at the rate of 7.40% per annum, until the
principal hereof shall have become due and payable, plus Additional Interest, if
any, until the principal hereof is paid or duly provided for or made available
for payment and on any overdue principal and (without duplication and to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest at the rate of 7.40% per annum, compounded
quarterly. The amount of interest payable for any period will be computed on
the basis of twelve 30-day months and a 360-day year. The amount of interest
payable for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months. 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
<PAGE>
Business Day (and without any interest or other payment in respect of any
such delay), except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on the
date the payment was originally payable. A "BUSINESS DAY" shall mean any day
other than (i) a Saturday or Sunday, (ii) a day on which banking institutions
in The City of New York are authorized or required by law or executive order
to remain closed or (iii) a day on which the Corporate Trust Office of the
Trustee or the principal office of the Property Trustee under the Trust
Agreement hereinafter referred to for Lincoln National Capital III is closed
for business. The interest installment so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities, as defined in the Indenture) is registered at the
close of business on the Regular Record Date for such interest installment,
which shall be the date which is fifteen days next preceding 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 this
Security (or one or more Predecessor Securities) is registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders
of Securities of this series not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
The Company shall have the right at any time during the term of this
Security, from time to time, to defer the payment of interest on such Security
for up to 20 consecutive quarters with respect to each deferral period (each an
"EXTENSION PERIOD"), during which Extension Periods the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which the Company shall pay all interest then accrued and unpaid
(together with Additional Interest thereon to the extent permitted by applicable
law); PROVIDED that during any such Extension Period, the Company will not, and
will not permit any Subsidiary of the Company to, (i) declare or pay any
dividends or distributions or redeem, purchase, acquire or make a liquidation
payment with respect to, any of the Company's outstanding capital stock or (ii)
make any payment of principal of, interest or premium, if any, on or repay,
repurchase or redeem any debt security of the Company that ranks PARI PASSU with
or junior in interest to this Security or make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company if such guarantee ranks PARI PASSU with or junior in interest to
the Securities (other than (a) dividends or distributions in Common Stock of the
Company, (b) redemptions or purchases of any rights pursuant to the Company's
Rights Plan, or any successor to such Rights Plan, and the declaration of a
dividend of such rights or the issuance of Stock
<PAGE>
under such plans in the future, (c) payments under any Lincoln Guarantee (as
defined in the Indenture), and (d) purchases of Common Stock related to the
issuance of Common Stock under any of the Company's benefit plans for its
directors, officers or employees). Prior to the termination of any such
Extension Period, the Company may further extend the interest payment period,
PROVIDED that no Extension Period shall exceed 20 consecutive quarters or
extend beyond the Maturity of this Security. Upon the termination of any
such Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due, 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 Holder of this Security and the Trustee notice of its
election to begin an Extension Period at least one Business Day prior to the
earlier of (i) the date the Distributions on the Preferred Securities are
payable or (ii) the date the Administrative Trustees are required to give
notice to any securities exchange or other applicable self-regulatory
organization or to holders of such Preferred Securities of the record date or
the date such Distributions are payable, but in any event not less than one
Business Day prior to such record date.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Company maintained for that
purpose in the United States, 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 Securities Register or (ii) 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 Securities
Register.
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and subject in right of payments to the prior
payment in full of all Senior Debt, 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 behalf to take such actions as may
be necessary or appropriate to effectuate the subordination so provided and
(c) appoints the Trustee his attorney-in-fact for any and all such purposes.
Each Holder hereof, by his acceptance hereof, waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt, 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
set forth 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.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: July 24, 1998
LINCOLN NATIONAL CORPORATION
By: /s/ Richard C. Vaughan
-----------------------------
Name: Richard C. Vaughan
Title: Executive Vice President and
Chief Financial Officer
Attest:
/s/ John L. Steinkamp
- -----------------------------
Name: John L. Steinkamp
Title: Vice President
This is one of the Securities referred to in the within mentioned
Indenture.
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: /s/ Barbara G. Grosse
---------------------
Authorized Officer
<PAGE>
[REVERSE OF SECURITY]
This Security is one of a duly authorized issue of securities of the
Company (herein called the "SECURITIES"), issued and to be issued in one or more
series under a Junior Subordinated Indenture, dated as of May 1, 1996 (herein
called the "INDENTURE"), between the Company and The First National Bank of
Chicago, as Trustee (herein called the "TRUSTEE", which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Securities, and of the terms upon which the
Securities are, and are to be, authenticated and delivered. This Security is
one of the series designated on the face hereof, limited in aggregate principal
amount to $206,186,000.
All terms used in this Security that are defined in the Indenture or
in the Amended and Restated Trust Agreement, dated as of July 24, 1998 (the
"TRUST AGREEMENT"), for Lincoln National Capital III among Lincoln National
Corporation, as Depositor, and the Trustees named therein, shall have the
meanings assigned to them in the Indenture or the Trust Agreement, as the case
may be.
On or after July 24, 2003, the Company may at any time, at its option,
subject to the terms and conditions of Article Eleven of the Indenture, redeem
this Security in whole at any time or in part from time to time, without premium
or penalty, at a redemption price equal to 100% of the principal amount thereof
plus the accrued and unpaid interest, including Additional Interest, if any, to
the date fixed for redemption.
If a Special Event in respect of Lincoln National Capital III shall
occur and be continuing, the Company may, at its option, redeem this Security
within 90 days of the occurrence of such Special Event, in whole but not in
part, subject to the provisions of Section 11.7 and the other provisions of
Article Eleven of the Indenture. The redemption price for any Security so
redeemed shall be equal to 100% of the principal amount thereof plus accrued and
unpaid interest, including Additional Interest, if any, to
<PAGE>
the date fixed for redemption.
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 Securities of this series shall
occur and be continuing, the principal of the Securities of this series 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, discharge and
defeasance at any time of the entire indebtedness of this Security upon
compliance by the Company with certain conditions set forth in the Indenture.
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 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.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to 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 principal amount of the
<PAGE>
Outstanding Securities of this series may declare the principal amount (or,
if the Securities of this series are Original Issue Discount Securities, such
portion of the principal amount as may be specified in the terms of this
series) of all 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), PROVIDED that, in the case of the Securities of a series
issued to a Lincoln Trust, if upon an Event of Default, the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding
Securities of this series fail to declare the principal of all the Securities
of this series to be immediately due and payable, the holders of at least 25%
in aggregate liquidation amount of the corresponding series of Preferred
Securities then outstanding shall have such right by a notice in writing to
the Company and the Trustee; and upon any such declaration such specified
amount of and the 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 (including any Additional
Interest) on such Securities shall remain subordinated to the extent provided
in Article Thirteen of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, 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
Securities Register, upon surrender of this Security for registration of
transfer at the office or agency of the Company maintained under Section 10.2 of
the Indenture duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities 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
<PAGE>
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 of this series are issuable only in registered form
without coupons in denominations of $25 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of such 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 INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
<PAGE>
EXHIBIT 4.4
GUARANTEE AGREEMENT
BETWEEN
LINCOLN NATIONAL CORPORATION
(AS GUARANTOR)
AND
THE FIRST NATIONAL BANK OF CHICAGO
(AS TRUSTEE)
DATED AS OF
JULY 24, 1998
<PAGE>
CROSS-REFERENCE TABLE*
SECTION OF GUARANTEE AGREEMENT
TRUST INDENTURE ACT SECTION OF
OF 1939, AS AMENDED GUARANTEE AGREEMENT
310(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(a)
310(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1(c), 2.8
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(b)
318(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.1
318(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1(a)
- ----------------
* 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>
TABLE OF CONTENTS
PAGE
----
ARTICLE I. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II. TRUST INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.1. Trust Indenture Act; Application . . . . . . . . . . . . . . . 4
Section 2.2. List of Holders. . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.3. Reports by the Guarantee Trustee . . . . . . . . . . . . . . . 5
Section 2.4. Periodic Reports to Guarantee Trustee. . . . . . . . . . . . . 5
Section 2.5. Evidence of Compliance with Conditions Precedent . . . . . . . 5
Section 2.6. Events of Default; Waiver. . . . . . . . . . . . . . . . . . . 5
Section 2.7. Event of Default; Notice . . . . . . . . . . . . . . . . . . . 6
Section 2.8. Conflicting Interests. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III. POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE . . . . . . . 6
Section 3.1. Powers and Duties of the Guarantee Trustee . . . . . . . . . . 6
Section 3.2. Certain Rights of Guarantee Trustee. . . . . . . . . . . . . . 8
Section 3.3. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE IV. GUARANTEE TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4.1. Guarantee Trustee; Eligibility . . . . . . . . . . . . . . . .10
Section 4.2. Appointment, Removal and Resignation of the Guarantee
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . .10
ARTICLE V. GUARANTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.1. Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . .11
Section 5.2. Waiver of Notice and Demand. . . . . . . . . . . . . . . . . .11
Section 5.3. Obligations Not Affected . . . . . . . . . . . . . . . . . . .11
Section 5.4. Rights of Holders. . . . . . . . . . . . . . . . . . . . . . .12
Section 5.5. Guarantee of Payment . . . . . . . . . . . . . . . . . . . . .12
Section 5.6. Subrogation. . . . . . . . . . . . . . . . . . . . . . . . . .13
Section 5.7. Independent Obligations. . . . . . . . . . . . . . . . . . . .13
ARTICLE VI. COVENANTS AND SUBORDINATION . . . . . . . . . . . . . . . . . . . 13
Section 6.1. Subordination. . . . . . . . . . . . . . . . . . . . . . . . .13
Section 6.2. Pari Passu Guarantees. . . . . . . . . . . . . . . . . . . . .13
ARTICLE VII. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.1. Termination. . . . . . . . . . . . . . . . . . . . . . . . . .13
<PAGE>
ARTICLE VIII. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.1. Successors and Assigns . . . . . . . . . . . . . . . . . . . .14
Section 8.2. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 8.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .14
Section 8.4. Benefit. . . . . . . . . . . . . . . . . . . . . . . . . . . .15
Section 8.5. Interpretation . . . . . . . . . . . . . . . . . . . . . . . .15
Section 8.6. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .16
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT, dated as of July 24, 1998, is executed and
delivered by LINCOLN NATIONAL CORPORATION, an Indiana corporation (the
"Guarantor") having its principal office at 200 East Berry Street, Fort
Wayne, Indiana 46802-2706, and THE FIRST NATIONAL BANK OF CHICAGO, a national
banking corporation, as trustee (the "Guarantee Trustee"), for the benefit of
the Holders (as defined herein) from time to time of the Preferred Securities
(as defined herein) of Lincoln National Capital III, a Delaware statutory
business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Trust Agreement (the "Trust
Agreement"), dated as of July 24, 1998 among the Issuer Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing up to $200,000,000 aggregate liquidation preference of its 7.40%
Preferred Securities, Series C (liquidation preference $25 per preferred
security) (the "Preferred Securities") representing preferred undivided
beneficial interests in the assets of the Issuer and having the terms set
forth in the Trust Agreement;
WHEREAS, the Preferred Securities will be issued by the Issuer and the
proceeds thereof, together with the proceeds from the issuance of the
Issuer's Common Securities (as defined below), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor which will be
deposited with The First National Bank of Chicago, as Property Trustee under
the Trust Agreement, as trust assets; and
WHEREAS, as incentive for the Holders to purchase Preferred Securities,
the Guarantor desires irrevocably and unconditionally to agree, to the extent
set forth herein, to pay to the Holders of the Preferred Securities the
Guarantee Payments (as defined herein) and to make certain other payments on
the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall
benefit the Guarantor, the Guarantor executes and delivers this Guarantee
Agreement for the benefit of the Holders from time to time of the Preferred
Securities.
ARTICLE I. DEFINITIONS
SECTION 1.1. DEFINITIONS.
As used in this Guarantee Agreement, the terms set forth below shall,
unless the context otherwise requires, have the following meanings.
Capitalized or otherwise defined terms used but not otherwise defined herein
shall have the meanings assigned to such terms in the Trust Agreement as in
effect on the date hereof.
"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, provided, however, that an Affiliate of
the Guarantor shall not be deemed to include the Issuer.
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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.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer.
"Debt" means, with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (i)
every obligation of such Person for money borrowed; (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the
acquisition of property, assets or businesses; (iii) every reimbursement
obligation of such Person with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of such Person; (iv)
every obligation of such Person issued or assumed as the deferred purchase
price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (v) every
capital lease obligation of such Person; and (vi) every obligation of the
type referred to in clauses (i) through (v) of another Person and all
dividends of another Person the payment of which, in either case, such Person
has guaranteed or is responsible or liable for, directly or indirectly, as
obligor or otherwise.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided,
however, that, except with respect to a default in payment of any Guarantee
Payments, the Guarantor shall have received notice of default and shall not
have cured such default within 60 days after receipt of such notice.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent
not paid or made by or on behalf of the Issuer; (i) any accrued and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Preferred Securities, to the extent the Issuer shall have funds on hand
available therefor at such time, (ii) the redemption price, including all
accrued and unpaid Distributions to the date of redemption (the "Redemption
Price"), with respect to the Preferred Securities called for redemption by
the Issuer to the extent the Issuer shall have funds on hand available
therefor at such time, and (iii) upon a voluntary or involuntary termination,
winding-up or liquidation of the Issuer, unless Debentures are distributed to
the Holders, the lesser of (a) the aggregate of the liquidation preference of
$25 per Preferred Security plus accrued and unpaid Distributions on the
Preferred Securities to the date of payment to the extent the Issuer shall
have funds on hand available to make such payment at such time and (b) the
amount of assets of the Issuer remaining available for distribution to
Holders in liquidation of the Issuer (in either case, the "Liquidation
Distribution").
"Guarantee Trustee" means The First National Bank of Chicago, until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Guarantee Agreement and thereafter
means each such Successor Guarantee Trustee.
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"Holder" means any holder, as registered on the books and records of the
Issuer, of any Preferred Securities; provided, however, that in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor, the Guarantee Trustee, or any Affiliate of the
Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of May 1,
1996, as supplemented and amended between the Guarantor and The First
National Bank of Chicago, as trustee.
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in liquidation preference of the Preferred Securities" means,
except as provided by the Trust Indenture Act, a vote by the Holder(s),
voting separately as a class, of more than 50% of the liquidation preference
of all then outstanding Preferred Securities issued by the Issuer.
"Officers' Certificate" means, with respect to any Person, a certificate
signed by the Chairman and Chief Executive Officer, President or a Vice
President, and by the Treasurer, and Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided
for in this Guarantee Agreement shall include:
(a) a statement that each officer signing the Officers' Certificate has
read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever
nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the above-designated officers and also
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means, with respect to a particular corporate trust matter, any other officer
to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Senior Debt" means the principal of (and premium, if any) and interest,
if any (including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Guarantor whether or not
such claim for post-petition interest is allowed in such proceeding), on
Debt, whether incurred on or prior to the date of this Guarantee Agreement or
thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to this Guarantee Agreement
or to other Debt which is pari passu with, or subordinated to, this Guarantee
Agreement; provided, however, that Senior Debt shall not be deemed to include
(a) any Debt of the Guarantor which when incurred and without respect to any
election under Section 1111(b) of the Bankruptcy Reform Act of 1978, was
without recourse to the Guarantor, (b) any Debt of the Guarantor to any of
its Subsidiaries, (c) Debt to any employee of the Guarantor, (d) any
liability for taxes, (e) Debt or other monetary obligations to trade
creditors created or assumed by the Guarantor or any of its Subsidiaries in
the ordinary course of business in connection with the obtaining of goods,
materials or services and (f) Debt issued under the Indenture and (g) similar
Guarantee Agreements issued by the Guarantor on behalf of the holders of
Preferred Securities issued by Lincoln National Capital I and Lincoln
National Capital II.
"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.
ARTICLE II. TRUST INDENTURE ACT
SECTION 2.1. TRUST INDENTURE ACT; APPLICATION.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
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. LIST OF HOLDERS.
(a) The Guarantor shall furnish or cause to be furnished to the
Guarantee Trustee (a) semiannually, on or before January 15 and July 15 of
each year, a list, in such form as the Guarantee Trustee may reasonably
require, of the names and addresses of the Holders ("List of Holders") as of
a date not more than 15 days prior to the delivery thereof, and (b) at such
other times as the Guarantee Trustee may request in writing, within 30 days
after the receipt by the Guarantor of any such request, a List of Holders as
of a date not more than 15 days prior to the time such list is furnished, in
each case to the extent such information is in the possession or
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control of the Guarantor and is not identical to a previously supplied list
of Holders or has not otherwise been received by the Guarantee Trustee in its
capacity as such. The Guarantee Trustee 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 Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. REPORTS BY THE GUARANTEE TRUSTEE.
Within 60 days of May 15 of each year, commencing May 15, 1999, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided 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 THE GUARANTEE TRUSTEE.
The Guarantor shall provide to the Guarantee Trustee, the Securities and
Exchange Commission and the Holders such documents, reports and information, if
any, as required by Section 314 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 such conditions precedent, if any, provided for in this
Guarantee Agreement that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6. EVENTS OF DEFAULT; WAIVER.
The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders, waive any past Event of
Default and its consequences. Upon such waiver, any such Event of Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Guarantee Agreement, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent therefrom.
SECTION 2.7. EVENT OF DEFAULT; NOTICE.
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(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default, transmit by mail, first class postage prepaid, to the
Holders, notices of all Events of Default known to the Guarantee Trustee,
unless such defaults have been cured or waived before the giving of such
notice, provided, that, except in the case of a default in the payment of a
Guarantee Payment, the Guarantee 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
Guarantee Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of the Trust
Agreement shall have obtained written notice, of such Event of Default.
SECTION 2.8. CONFLICTING INTERESTS.
The Trust Agreement shall be deemed to be specifically described in this
Guarantee Agreement for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III. POWERS, DUTIES AND RIGHTS OF
THE GUARANTEE TRUSTEE
SECTION 3.1. POWERS AND DUTIES OF THE GUARANTEE TRUSTEE.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(iv) or to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Successor Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee, upon
acceptance by such Successor Guarantee Trustee of its appointment hereunder,
and such vesting and cessation of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the Guarantee
Trustee shall enforce this Guarantee Agreement for the benefit of the Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing or waiver of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read
into this Guarantee Agreement against the Guarantee Trustee. In case an Event
of Default has occurred (that has not been cured or waived pursuant to
Section 2.6), the Guarantee Trustee shall exercise such of the rights and
powers vested in it by this Guarantee Agreement,
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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 Agreement 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 Event of Default and after the
curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee Trustee
shall be determined solely by the express provisions
of this Guarantee Agreement, 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 Agreement;
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 Agreement; but in the
case of any such certificates or opinions that by
any provision hereof or of the Trust Indenture Act
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 Agreement;
(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 preference of the Preferred
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 Agreement; and
(iv) no provision of this Guarantee Agreement 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
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terms of this Guarantee Agreement or adequate indemnity 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:
(i) The Guarantee Trustee may 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 reasonably
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 Agreement shall be sufficiently evidenced by an
Officer's Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee Agreement,
the Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting to
take any action hereunder, the Guarantee Trustee (unless other
evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and rely upon an
Officers' Certificate which, upon receipt of such request from
the Guarantee Trustee, shall be promptly delivered by the
Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel, and the
written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted to
be taken by it hereunder in good faith and in accordance with
such advice or opinion. Such legal counsel may be legal counsel
to the Guarantor or any of its Affiliates and may be one of its
employees. The Guarantee Trustee shall have the right at any time
to seek instructions concerning the administration of this
Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such
Holder shall have provided to the Guarantee Trustee such adequate
security and indemnity as would satisfy a reasonable person in
the position of the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses) 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)(v) shall be taken to relieve the Guarantee
Trustee, upon the
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occurrence of an Event of Default, of its obligation to exercise
the rights and powers vested in it by this Guarantee Agreement.
(vi) 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.
(vii) The Guarantee Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or
by or through its agents or attorneys, and the Guarantee
Trustee shall not be responsible for any misconduct or
negligence on the part of any such agent or attorney appointed
with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee Agreement 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 (A)
may request instructions from the Holders, (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 acting in accordance with such instructions.
(b) No provision of this Guarantee Agreement 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 to act in accordance with such power and
authority.
SECTION 3.3. INDEMNITY.
The Guarantor agrees to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without negligence or
bad faith on the part of the Guarantee Trustee, arising out of or in connection
with the acceptance or administration of this Guarantee Agreement, including the
costs and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. The Guarantee Trustee will not claim or exact any lien or charge on
any Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement.
The provisions of this Section 3.3 shall survive the termination of the
Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
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ARTICLE IV. GUARANTEE TRUSTEE
SECTION 4.1. GUARANTEE TRUSTEE: ELIGIBILITY.
(a) There shall at all times be a Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) 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 shall be a corporation meeting the requirements
of Section 310(c) of the Trust Indenture Act. If such corporation
publishes reports of condition at least annually, pursuant to law
or to the requirements of the supervising or examining authority,
then, for the purposes of this Section and to the extent
permitted by the Trust Indenture Act, 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 immediately 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 THE GUARANTEE TRUSTEE.
(i) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by the Guarantor.
(ii) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor
Guarantee Trustee and delivered to the Guarantor.
(iii) The Guarantee Trustee appointed hereunder shall hold office
until a Successor Guarantee Trustee shall have been appointed
or until its removal or resignation. The Guarantee Trustee may
resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee
Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Guarantee
trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
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(iv) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60
days after delivery to the Guarantor of an instrument of
resignation, the resigning Guarantee Trustee may petition, at the
expense of the Guarantor, any court of competent jurisdiction for
appointment of a Successor Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V. GUARANTEE
SECTION 5.1. GUARANTEE.
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Guarantee Payments (without duplication of amounts theretofore paid
by or on behalf of the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim which the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2. WAIVER OF NOTICE AND DEMAND.
The Guarantor hereby waives notice of acceptance of the Guarantee Agreement
and of any liability to which it applies or may apply, presentment, demand for
payment, any right to require a proceeding first against the Guarantee Trustee,
Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
SECTION 5.3. OBLIGATIONS NOT AFFECTED.
The obligations, covenants, agreements and duties of the Guarantor under
this Guarantee Agreement shall in no way be affected or impaired by reason of
the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the Distributions (other than an extension of time for payment of
Distributions that results from the extension of any interest payment period on
the Debentures as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with, the Preferred Securities;
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(c) any failure, omission, delay or lack of diligence on the part of the
Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Preferred Securities, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of any
collateral, receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of debt of,
or other similar proceedings affecting, the Issuer or any of the assets of the
Issuer;
(e) any invalidity of, or defect or deficiency in, the Preferred
Securities;
(f) the settlement or compromise of any obligation guaranteed hereby or
hereby incurred; or
(g) any other circumstance whatsoever that might otherwise constitute a
legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or obtain
the consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4. RIGHTS OF HOLDERS.
The Guarantor expressly acknowledges that: (i) this Guarantee Agreement
will be deposited with the Guarantee Trustee to be held for the benefit of the
Holders; (ii) the Guarantee Trustee has the right to enforce this Guarantee
Agreement on behalf of the Holders; (iii) the Holders of a Majority in
liquidation preference of the Preferred Securities have the right to direct the
time, method and place of conducting any proceeding for any remedy available to
the Guarantee Trustee in respect of this Guarantee Agreement or exercising any
trust or power conferred upon the Guarantee Trustee under this Guarantee
Agreement; and (iv) any Holder may institute a legal proceeding directly against
the Guarantor to enforce its rights under this Guarantee Agreement, without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
or any other Person.
SECTION 5.5. GUARANTEE OF PAYMENT
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer) or upon distribution of Debentures to Holders as provided in the
Trust Agreement.
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SECTION 5.6. SUBROGATION.
The Guarantor shall be subrogated to all (if any) rights of the Holders
against the Issuer in respect of any amounts paid to the Holders by the
Guarantor under this Guarantee Agreement and shall have the right to waive
payment by the Issuer pursuant to Section 5.1; provided, however, that the
Guarantor shall not (except to the extent required by mandatory provisions of
law) be entitled to enforce or exercise any rights which it may acquire by way
of subrogation or any indemnity, reimbursement or other agreement, in all cases
as a result of payment under this Guarantee Agreement, at the time of any such
payment, and amounts are due and unpaid under this Guarantee Agreement. If any
amount shall be paid to the Guarantor in violation of the preceding sentence,
the Guarantor agrees to hold such amount in trust for the Holders and to pay
over such amount to the Holders.
SECTION 5.7. INDEPENDENT OBLIGATIONS.
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Issuer with respect to the Preferred Securities and
that the Guarantor shall be liable as principal and as debtor hereunder to make
Guarantee Payments pursuant to the terms of this Guarantee Agreement
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI. COVENANTS AND SUBORDINATION
SECTION 6.1. SUBORDINATION.
This Guarantee Agreement will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all Senior
Debt of the Guarantor.
SECTION 6.2. PARI PASSU GUARANTEES.
This Guarantee Agreement shall rank pari passu with any similar Guarantee
Agreements issued by the Guarantor on behalf of the holders of Preferred
Securities issued by Lincoln National Capital I and Lincoln National Capital II.
ARTICLE VII. TERMINATION
SECTION 7.1. TERMINATION.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price of all Preferred
Securities, (ii) the distribution of Debentures to the Holders in exchange for
all of the Preferred Securities or (iii) full payment of the amounts payable in
accordance with the Trust Agreement upon liquidation of the Issuer.
Notwithstanding the foregoing, this Guarantee Agreement will continue to be
effective or will be reinstated, as the case may be, if at any time any Holder
must restore payment of any sums paid with respect to Preferred Securities or
this Guarantee Agreement.
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<PAGE>
ARTICLE VIII. MISCELLANEOUS
SECTION 8.1. SUCCESSORS AND ASSIGNS.
All guarantees and agreements contained in this Guarantee Agreement shall
bind the successors, assigns, receivers, trustees and representatives of the
Guarantor and shall inure to the benefit of the Holders of the Preferred
Securities then outstanding. Except in connection with a consolidation, merger
or sale involving the Guarantor that is permitted under Article Eight of the
Indenture and pursuant to which the assignee agrees in writing to perform the
Guarantor's obligations hereunder, the Guarantor shall not assign its
obligations hereunder.
SECTION 8.2. AMENDMENTS.
Except with respect to any changes which do not adversely affect the
rights of the Holders in any material respect (in which case no consent of
the Holders will be required), this Guarantee Agreement may only be amended
with the prior approval of the Holders of not less than a Majority in
liquidation preference of the Preferred Securities. The provisions of Article
VI of the Trust Agreement concerning meetings of the Holders shall apply to
the giving of such approval.
SECTION 8.3. NOTICES.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class 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):
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670-0126
Facsimile No.: (312) 407-1708
Attention: Corporate Trust Services Division
(b) if given to the Guarantor, to the address set forth below or such
other address as the Guarantor may give notice to the Holders:
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: (219) 455-6265
Attention: Treasurer
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<PAGE>
(c) if given to the Issuer, in care of the Guarantee Trustee, at the
Issuer's (and the Guarantee Trustee's) address set forth below or such other
address as the Guarantee Trustee on behalf of the Issuer may give notice to the
Holders:
Lincoln National Capital III
c/o Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Facsimile No.: (219) 455-6265
Attention: Treasurer
with a copy to:
The First National Bank of Chicago
One First National Plaza
Suite 0126
Chicago, Illinois 60670
Facsimile No.: (312) 407-1708
Attention: Corporate Trust Services Division
(d) if given to any Holder, at the address set forth on the books and
records of the Issuer.
All notices hereunder 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 8.4. BENEFIT.
This Guarantee Agreement is solely for the benefit of the Holders and is
not separately transferable from the Preferred Securities.
SECTION 8.5. INTERPRETATION.
In this Guarantee Agreement, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee Agreement but not defined in
the preamble hereto have the respective meanings assigned to them in Section
1.1;
(b) a term defined anywhere in this Guarantee Agreement has the same
meaning throughout;
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<PAGE>
(c) all references to "the Guarantee Agreement" or "this Guarantee
Agreement" are to this Guarantee Agreement as modified, supplemented or amended
from time to time;
(d) all references in this Guarantee Agreement to Articles and Sections
are to Articles and Sections of this Guarantee Agreement unless otherwise
specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Guarantee Agreement unless otherwise defined in this Guarantee
Agreement or unless the context otherwise requires;
(f) a reference to the singular includes the plural and vice versa; and
(g) the masculine, feminine or neuter genders used herein shall include
the masculine, feminine and neuter genders.
SECTION 8.6. GOVERNING LAW.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT
OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
Lincoln National Corporation
By: /s/ Richard C. Vaughan
---------------------------------
Name: Richard C. Vaughan
Title: Executive Vice President
and Chief Financial Officer
The First National Bank of Chicago, as
Guarantee Trustee
By: /s/ John R. Prendiville
---------------------------------
Name: John R. Prendiville
Title: Vice President
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<PAGE>
EXHIBIT 8.1
[Letterhead of Sonnenschein Nath & Rosenthal]
July 24, 1998
Lincoln National Corporation
Lincoln National Capital III
200 East Berry Street
Fort Wayne, Indiana 46802-2706
Re: Lincoln National Capital III
7.40% Trust Originated Preferred Securities
-------------------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 (Reg. No.
333-49201) (the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") by Lincoln National Corporation
("Lincoln") and Lincoln National Capital III and the prospectus dated April
27, 1998 contained therein and the prospectus supplement dated July 17, 1998
to such prospectus (collectively, the "Prospectus") relating to the offering
of 7.40% Trust Originated Preferred Securities, Series C (the "Preferred
Securities").
We have acted as special counsel to Lincoln in connection with the
preparation of the Registration Statement and the Prospectus. We hereby
confirm that, although the discussion set forth under the caption "Certain
Federal Income Tax Consequences" in the Prospectus does not purport to
discuss all possible United States federal income tax consequences of the
purchase, ownership and disposition of Preferred Securities, the statements
contained in the Prospectus under such caption, to the extent they constitute
matters of federal income tax law or legal conclusions with respect thereto,
have been prepared or reviewed by us, and, in our opinion, are correct in all
material respects.
This opinion is furnished to you solely for your benefit in connection
with the filing of a Current Report on Form 8-K in connection with the
transactions contemplated by the Prospectus and, except as set forth below,
is not to be relied upon, used, circulated, quoted or otherwise referred to
in any manner by any person, firm, governmental authority or entity
whatsoever without our prior written consent. This opinion is limited to the
matters stated herein and no opinion is implied or may be inferred beyond the
matters stated herein. This opinion shall not be construed as or deemed to
be a guaranty or insuring agreement.
<PAGE>
This opinion is rendered as of the date hereof based on the law and
facts in existence on the date hereof, and we do not undertake, and hereby
disclaim, any obligation to advise you of any changes in law or fact, whether
or not material, which may be brought to our attention at a later date.
We hereby consent to the use of our name under the heading "Validity of
Securities" in the Prospectus and the filing of this opinion with the
Commission as Exhibit 8.1 to the Form 8-K. In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission promulgated thereunder.
Very truly yours,
SONNENSCHEIN NATH & ROSENTHAL
By: /s/ Thomas M. Stephens
----------------------
Thomas M. Stephens
